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7

Designing Interventions

learning objectives

Describe the interventions presented in the text.

Discuss how contingencies related to the change situation affect the design of effective organization development (OD) interventions.

Discuss how contingencies related to the target of change affect the design of effective OD interventions.

A n organization development intervention is a sequence of activities, actions, and events intended to help an organization improve its

performance and effectiveness. Designing interven- tions, or action planning, derives from careful diag- nosis and is meant to resolve specific problems and to improve particular areas of organizational functioning identified in the diagnosis. Organization development (OD) interventions vary from standard- ized programs that have been developed and used

in many organizations to relatively unique programs tailored to a specific organization or department.

This chapter serves as an overview of the intervention design process. It briefly describes the various types of OD interventions presented in this book. Parts 3–6 of this text describe fully the major interventions used in OD today. Criteria that define effective OD interventions are discussed and contingencies that guide successful intervention design are identified.

7-1 Overview of Interventions The OD interventions described here represent the major organization change methods used in OD today. They include four major types of planned change: human process interventions, technostructural interventions, human resource management interven- tions, and strategic change interventions.

7-1a Human Process Interventions Part 3 of the book presents interventions focusing on people within organizations and the processes through which they accomplish organizational goals. These processes include communication, problem solving, group decision making, and leadership. This type of intervention is deeply rooted in OD’s history and represents the earliest change

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programs characterizing the field. Human process interventions derive mainly from the disciplines of psychology and social psychology and the applied fields of group dynamics and human relations. Practitioners applying these interventions generally value human fulfillment and expect that organizational effectiveness follows from improved function- ing of people and organizational processes.1

Chapter 10 discusses human process interventions related to interpersonal relation- ships and group dynamics. They are among the oldest and most applied interventions in OD and include the following three change programs:

1. Process consultation. This intervention focuses on interpersonal relations and social dynamics occurring in work groups. Typically, a process consultant helps group members diagnose group functioning and devise appropriate solutions to process problems, such as dysfunctional conflict, poor communication, and ineffective norms. The aim is to help members gain the skills and understanding necessary to identify and solve interpersonal and group problems themselves.

2. Third-party intervention. This change method is a form of process consultation aimed at dysfunctional interpersonal relations in organizations. Interpersonal con- flict may derive from substantive issues, such as disputes over work methods, or from interpersonal issues, such as miscommunication. The third-party intervener helps people resolve conflicts through such methods as problem solving, bargaining, and conciliation.

3. Team building. This intervention helps work groups become more effective in accomplishing tasks. Like process consultation, team building helps members diag- nose group processes and devise solutions to problems. It goes beyond group pro- cesses, however, to include examination of the group’s task, member roles, and strategies for performing tasks. The OD practitioner also may function as a resource person offering expertise related to the group’s task.

Chapter 11 presents human process interventions that are more system-wide than those described in Chapter 10. They typically focus on the total organization or an entire department, as well as on relations between groups. They include three interventions:

1. Organization confrontation meeting. This change method mobilizes organiza- tion members to identify problems, set action targets, and begin working on prob- lems. It is usually applied when organizations are experiencing stress and when management needs to organize resources for immediate problem solving. The intervention generally includes various groupings of employees in identifying and solving problems.

2. Intergroup relations. These interventions are designed to improve interactions among different groups or departments in organizations. The microcosm group intervention involves a small group of people whose backgrounds closely match the organizational problems being addressed. This group addresses the problems and develops means to solve them. The intergroup conflict model typically involves an OD practitioner helping two groups understand the causes of their conflict and choosing appropriate solutions.

3. Large group interventions. These interventions involve getting a broad variety of stakeholders into a large meeting to clarify important values, to develop new ways of working, to articulate a new vision for the organization, or to solve pressing organizational problems. Such meetings are powerful tools for creating awareness of organizational problems and opportunities for specifying valued directions for future action.

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7-1b Technostructural Interventions Part 4 of the book presents interventions focusing on an organization’s technology (e.g., task methods and job design) and structure (e.g., division of labor and hierarchy). These change methods are receiving increasing attention in OD, especially in light of current concerns about productivity and organizational effectiveness. They include approaches to employee involvement, as well as methods for structuring organizations, groups, and jobs. Technostructural interventions are rooted in the disciplines of engi- neering, sociology, and psychology and in the applied fields of sociotechnical systems and organization design. Practitioners generally stress both productivity and human fulfillment and expect that organization effectiveness will result from appropriate work designs and organization structures.2

In Chapter 12, we discuss the following three technostructural interventions con- cerned with restructuring organizations:

1. Structural design. This change process concerns the organization’s division of labor—how tasks are subdivided into work units and how those units are coordi- nated for task completion. Interventions aimed at structural design include moving from more traditional ways of dividing the organization’s overall work (such as functional, self-contained unit, and matrix structures) to more integrative and flexi- ble forms (such as process-based, customer-centric, and network-based structures). Diagnostic guidelines exist to determine which structure is appropriate for particular organizational environments, technologies, and conditions.

2. Downsizing. This intervention reduces costs and bureaucracy by decreasing the size of the organization through personnel layoffs, organization redesign, and outsour- cing. Each of these downsizing methods must be planned with a clear understanding of the organization’s strategy.

3. Reengineering. This intervention radically redesigns the organization’s core work pro- cesses to create tighter linkage and coordination among the different tasks. This work- flow integration results in faster, more responsive task performance. Reengineering is often accomplished with new information technology that permits employees to control and coordinate work processes more effectively. Reengineering often fails if it ignores the basic principles and processes of OD.

Chapter 13 is concerned with methods for involving employees in decision making. These generally attempt to move knowledge, power, information, and rewards downward in the organization. They include the following three interventions:

1. Parallel structures. This intervention involves organization members in resolving ill-defined, complex problems. Parallel structures, such as cooperative union- management projects and quality circles, operate in conjunction with the formal organization and provide members with an alternative setting in which to address problems and propose solutions.

2. Total quality management. This intervention involves organization members in continuously improving quality as part of normal work operations. It includes extensive training in total quality management knowledge and skills and the con- stant application of that expertise to improve quality at work.

3. High-involvement organizations. This comprehensive intervention designs almost all features of the organization to promote high levels of employee involvement. Changes in structure, work design, information and control systems, and human resource practices jointly support member involvement in relevant decision making throughout the firm.

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Chapter 14 discusses designing work for individual jobs and interactive groups. These change programs involve engineering, motivational, and sociotechnical systems approaches to work design. They include two OD interventions:

1. Job enrichment. Based on motivational principles, this intervention creates jobs that employees are likely to experience as meaningful with high levels of autonomy and feedback from performing the work. Job enrichment results in high job satisfaction and performance quality, especially for those individuals who have needs for growth and learning at work.

2. Self-managed work teams. This intervention designs work for teams performing highly interrelated tasks that require real-time decision making. Self-managed work teams are typically responsible for a complete product or service and members are able to make decisions and control their own task behaviors without a lot of external controls.

7-1c Human Resources Management Interventions Part 5 of the book focuses on interventions used to select, reward, develop, and support people in organizations. These practices traditionally have been associated with the human resources function in organizations. In recent years, interest has grown in integrating human resources management with OD. Human resources management interventions are rooted in labor relations and in the applied practices of compensation and benefits, employee selection and placement, performance appraisal, career develop- ment, and employee diversity and wellness. Practitioners in this area typically focus on the people in organizations, believing that organizational effectiveness results from improved practices for integrating employees into organizations.

Chapter 15 discusses interventions concerning performance management, including the following change programs:

1. Goal setting. This change program involves setting clear and challenging goals. It attempts to improve organization effectiveness by establishing a better fit between personal and organizational objectives. Managers and subordinates periodically meet to plan work, review accomplishments, and solve problems in achieving goals. Management by Objectives, a special case of the goal-setting intervention, is also discussed.

2. Performance appraisal. This intervention is a systematic process of jointly assessing work-related achievements, strengths, and weaknesses. It is the primary human resources management intervention for providing performance feedback to indivi- duals and work groups. Performance appraisal represents an important link between goal-setting and reward systems.

3. Reward systems. This intervention involves the design of organizational rewards to improve employee satisfaction and performance. It includes innovative approaches to pay, promotions, and fringe benefits.

Chapter 16 focuses on these change methods for managing, developing, and retain- ing organizational talent:

1. Coaching and mentoring. This intervention helps executives and employees to clar- ify their goals, deal with potential stumbling blocks, and improve their performance. It often involves a one-on-one relationship between the OD practitioner and the client and focuses on personal learning that gets transferred into organizational results and more effective leadership skills.

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2. Management and leadership development. Among the oldest strategies for organi- zational change, training and development interventions increase organization mem- bers’ skills and knowledge. The focus of these interventions is on building the competencies needed to lead the organization in the future and includes traditional classroom lectures as well as simulations, action learning, and case studies.

3. Career planning and development. This intervention helps people choose organiza- tions and career paths and attain career objectives. It generally focuses on managers and professional staff and is seen as a way to increase the retention of valuable employees and to improve the quality of work life.

Chapter 17 describes interventions for supporting organization members:

1. Managing workforce diversity. This change program makes human resources prac- tices more responsive to a variety of individual needs. Important trends, such as the increasing number of women, ethnic minorities, and physically and mentally chal- lenged people in the workforce, require a more flexible set of policies and practices.

2. Employee stress and wellness. These interventions include employee assistance pro- grams (EAPs) and stress management. EAPs are counseling programs that help employees deal with substance abuse and mental health, marital, and financial problems that often are associated with poor work performance. Stress-management programs help employees cope with the negative consequences of stress at work. They help people reduce specific sources of stress, such as role conflict and ambiguity, and provide methods for reducing such stress symptoms as hypertension and anxiety.

7-1d Strategic Change Interventions Part 6 of the book considers interventions that link the internal functioning of the or- ganization to the larger environment and transform the organization to keep pace with changing conditions. These change programs are among the newest additions to OD. They are implemented organization-wide and bring about a fit between business strategy, organization design, and the larger environment. The interventions derive from the dis- ciplines of strategic management, organization theory, economics, and anthropology.

In Chapter 18, we describe the characteristics of transformational change and dis- cuss interventions that transform the way the organization relates to its environment or operates internally:

1. Organization design. Organization design interventions address the different elements that comprise the “architecture” of the organization, including structure, work design, human resources practices, and management processes. In either domestic or world- wide settings, organization design aligns these components with the organization’s strategy and with each other so they mutually direct behavior to execute the strategy.

2. Integrated strategic change. This comprehensive OD intervention describes how planned change can make a value-added contribution to strategic management. It argues that business strategies and organizational systems must be changed together in response to external and internal disruptions. A strategic change plan helps mem- bers manage the transition between a current strategy and organization design and the desired future strategy and design.

3. Culture change. This intervention helps an organization develop a culture (beha- viors, values, beliefs, and norms) appropriate to its strategy and competitive environ- ment. It focuses on developing a strong organization culture to keep organization members pulling in the same direction.

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Chapter 19 addresses the increasing need for organizations to change continuously in response to rapidly changing environments. These interventions are designed to sup- port continuous organizational change:

1. Dynamic strategy making. This intervention helps organizations build a strategic system that can adapt continually to changing conditions. It involves both the con- tent (the “what”) of strategy formulation and the process (the “how” and “who”) of strategy implementation.

2. Self-designing organizations. This change program helps organizations gain the capacity to alter themselves fundamentally. It is a highly participative process involv- ing multiple stakeholders in setting strategic directions and designing and imple- menting appropriate structures and systems. Organizations learn how to design and implement their own strategic changes.

3. Learning organizations. This intervention involves increasing the organization’s capability to acquire and develop new knowledge, including how that knowledge can be organized and used to improve organization performance. These changes enable organizations to move beyond solving existing problems to learn how to improve themselves continuously.

4. Built-to-change organizations. This approach to continuous change challenges the traditional assumption that stability is the key to organizational success. Built-to- change organizations, on the other hand, assume that the source of effectiveness is the ability to change continuously. The features, skills and knowledge, and processes of leading and managing these adaptable organizations are described.

In the final chapter of Part 6, Chapter 20, we describe strategic interventions that shape how organizations collaborate with each other:

1. Mergers and acquisitions. This intervention describes how OD practitioners can assist two or more organizations to form a new entity. Addressing key strategic, leadership, and cultural issues prior to the legal and financial transaction helps to smooth subsequent operational integration of the organizations.

2. Alliances. This collaborative intervention helps two organizations pursue common goals through the sharing of resources, including intellectual property, people, capi- tal, technology, capabilities, or physical assets. Effective alliance development gener- ally follows a process of strategy formulation, partner selection, alliance structuring and start-up, and alliance operation and adjustment.

3. Networks. This intervention helps to develop relationships among three or more organizations to perform tasks or solve problems that are too complex for single organizations to resolve. It helps organizations recognize the need for partnerships and develop appropriate structures for implementing them. It also addresses how to manage change within existing networks.

7-2 What Are Effective Interventions? OD interventions involve a set of sequenced and planned actions or events intended to help an organization increase its effectiveness. Interventions purposely disrupt the status quo; they are deliberate attempts to change an organization or subunit toward a different and more effective state. Three major criteria define an effective OD intervention: (1) the extent to which it fits the needs of the organization; (2) the degree to which it is based on causal knowledge of intended outcomes; and (3) the extent to which it transfers change management competence to organization members.

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The first criterion concerns the extent to which the intervention is relevant to the organization and its members. Effective interventions are based on valid information about the organization’s functioning; they provide organization members with opportu- nities to make free and informed choices; and they gain members’ internal commitment to those choices.3

Valid information is the result of an accurate diagnosis of the organization’s function- ing. It must reflect fairly what organization members perceive and feel about their primary concerns and issues. Free and informed choice suggests that members are actively involved in making decisions about the changes that will affect them. This principle also means that they can choose not to participate and that interventions will not be imposed on them. This is an important distinction between change management—where a change legiti- mately can be imposed on people—and OD—where the intent of the change process is to build capacity for change and increase effectiveness. Internal commitment means that organization members accept ownership of the intervention and take responsibility for implementing it. If interventions are to result in meaningful changes, management, staff, and other relevant members must be committed to carrying them out.

The second criterion of an effective intervention involves knowledge of outcomes. Because interventions are intended to produce specific results, they must be based on valid knowledge that those outcomes actually can be produced. Otherwise, there is no scientific basis for designing an effective OD intervention. Unfortunately—and in con- trast to other applied disciplines, such as medicine and engineering—knowledge of inter- vention effects is in a rudimentary stage of development in OD. Much of the evaluation research lacks sufficient rigor to make strong causal inferences about the success or fail- ure of change programs. (Chapter 9 discusses how to evaluate OD programs rigorously.) Moreover, few attempts have been made to examine the comparative effects of different OD techniques. All of these factors make it difficult to know whether one method is more effective than another.

Despite these problems, more attempts are being made to assess systematically the strengths and weaknesses of OD interventions and to compare the impact of different techniques on organization effectiveness.4 Many of the OD interventions that are dis- cussed in Parts 3–6 have been subjected to evaluative research, and the chapters explore the research appropriate to them.

The third criterion of an effective intervention involves the extent to which it enhances the organization’s capacity to manage change. The values underlying OD sug- gest that following an intervention, organization members should be better able to carry out planned change activities on their own. From active participation in designing and implementing the intervention, they should gain knowledge and skill in managing change. Competence in change management is essential in today’s environment, where technological, social, economic, and political changes are rapid and persistent. Many organizations, such as Capital One, The Hartford, Limited Brands, and Microsoft, recog- nize this need and are systematically building their change management capabilities.

7-3 How to Design Effective Interventions Designing OD interventions requires paying careful attention to the needs and dynamics of the change situation and crafting a change program that will be consistent with the previously described criteria of effective interventions. Current knowledge of OD interventions provides only general prescriptions for change. There is scant precise infor- mation or research about how to design interventions or how they can be expected to

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interact with organizational conditions to achieve specific results.5 Moreover, because the ability to implement most OD interventions is highly dependent on the skills and knowl- edge of the change agent, the design of an intervention will depend to some extent on the expertise of the practitioner.

Two major sets of contingencies that can affect intervention success have been dis- cussed in the OD literature: those having to do with the change situation and those related to the target of change. Both kinds of contingencies need to be considered in designing interventions.

7-3a Contingencies Related to the Change Situation Researchers have identified a number of contingencies present in the change situation that can affect intervention success. These include individual differences among organi- zation members (e.g., needs for autonomy), organizational factors (e.g., management style and technical uncertainty), and dimensions of the change process itself (e.g., degree of top-management support). Unless these factors are taken into account, designing an intervention will have little impact on organizational functioning or, worse, it may pro- duce negative results. For example, to resolve motivational problems among blue-collar workers in an oil refinery, it is important to know whether interventions intended to improve motivation (e.g., job enrichment) will succeed with the kinds of people who work there. In many cases, knowledge of these contingencies results in modifying or adjusting the change program to fit the setting. In applying a reward-system intervention to an organization, the changes might have to be modified depending on whether the firm wants to reinforce individual or team performance.

Although knowledge of contingencies is still at a rudimentary stage of development in OD, researchers have discovered several situational factors that can affect intervention success.6 These include specific contingencies for many of the interventions reviewed in this book, and they will be discussed in respective chapters describing the change pro- grams. Two additional and generic contingencies related to the country or region’s national culture and stage of economic development are presented here.

National Culture The applicability and effectiveness of OD in countries outside of the United States is the subject of intense debate.7 Because OD was developed predominantly by American and Western European practitioners, its practices and methods are heavily influenced by the values and assumptions of these Western industrialized cultures. Thus, traditional approaches to planned change may promote management practices that con- flict with the values and assumptions of other societies. Will Chinese cultural values, for example, be preserved or defended as an increasing number of European and American organizations establish operations in that country? How should OD be conducted in an Indian firm operating in the United States? On the other hand, some practitioners believe that OD can result in organizational improvements in any culture.

Researchers have proposed that applying OD in different countries requires a “context-based” approach to designing interventions.8 This involves fitting the change pro- cess to the organization’s cultural context, including the values held by members in the particular country or region. These beliefs inform people about behaviors that are impor- tant and acceptable in their culture. Cultural values play a major role in shaping the cus- toms and practices that occur within organizations as well, and influencing how members react to phenomena having to do with power, conflict, ambiguity, time, and change.

There is a growing body of knowledge about cultural diversity and its effect on organizational and management practices.9 As shown in Table 7.1, researchers have

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identified five key values that describe national cultures and influence organizational customs:

1. Context orientation. This value describes how information is conveyed and time is valued in a culture. In low-context cultures, such as Scandinavia and the United States, people communicate directly in words and phrases. The more specific the word, the more meaning is expressed. In addition, time is viewed as discrete and linear—as something that can be spent, used, saved, or wasted. In high-context cul- tures, on the other hand, the communication medium reflects the message more

TABLE 7.1

Cultural Values and Organization Customs

Value Definition Organization Customs When the Value Is at One Extreme

Representative Countries

Context The extent to which words carry the meaning of a message; how time is viewed

Ceremony and routines are common

Structure is less formal; fewer written policies exist

People are often late for appointments

High: Asian and Latin American countries

Low: Scandinavian countries, United States

Power distance

The extent to which members of a society accept that power is distributed unequally in an organization

Decision making is autocratic Superiors consider subordinates

as part of a different class Subordinates are closely

supervised Employees are not likely to

disagree Powerful people are entitled to

privileges

High: Latin American and Eastern European countries

Low: Scandinavian countries

Uncertainty avoidance

The extent to which members of an organization tolerate the unfamiliar and unpredictable

Experts have status/authority Clear roles are preferred Conflict is undesirable Change is resisted Conservative practices are

preferred

High: Asian countries Low: European

countries

Achievement orientation

The extent to which organization members value assertiveness and the acquisition of material goods

Achievement is reflected in wealth and recognition

Decisiveness is valued Larger and faster are better Gender roles are clearly

differentiated

High: Asian and Latin American countries, South Africa

Low: Scandinavian countries

Individualism The extent to which people believe they should be responsible for themselves and their immediate families

Personal initiative is encouraged Time is valuable to individuals Competitiveness is accepted Autonomy is highly valued

High: United States Low: Latin American

and Eastern European countries

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than the words, and time is a fluid and flexible concept. For example, social cues in Japan and Venezuela provide as much, if not more, information about a particular situation than do words alone. Business practices in high-context cultures emphasize ceremony and ritual. For example, knowing how to exchange business cards, partic- ipate in a reception, or conduct a banquet in China honors the client and facilitates the business relationship. How one behaves is an important signal of support and compliance with the way things are done. Structures are less formal in high-context cultures; there are few written policies and procedures to guide behavior. Because high-context cultures view time as fluid, punctuality for appointments is less a pri- ority than is maintaining relationships.

2. Power distance. This value concerns the way people view authority, status differ- ences, and influence patterns. People in high power-distance regions, such as Latin America and Eastern Europe, tend to accept unequal distributions of power and influence, and consequently autocratic and paternalistic decision-making practices are the norm. Organizations in high power-distance cultures tend to be centralized, with several hierarchical levels and a large proportion of supervisory personnel. Subordinates in these organizations represent a lower social class. They expect to be supervised closely and believe that power holders are entitled to special privileges. Such practices would be inappropriate in low power-distance regions, such as Scandinavia, where participative decision making and egalitarian methods prevail.

3. Uncertainty avoidance. This value reflects a preference for conservative practices and familiar and predictable situations. People in high uncertainty-avoidance regions, such as Asia, prefer stable routines over change and act to maintain the status quo. They do not like conflict and believe that company rules should not be broken. In regions where uncertainty avoidance is low, such as in many European countries, ambiguity is less threatening. Organizations in these cultures tend to favor fewer rules, higher levels of participation in decision making, more organic structures, and more risk taking.

4. Achievement orientation. This value concerns the extent to which the culture favors the acquisition of power and resources. Employees from achievement-oriented cultures, such as Asia and Latin America, place a high value on career advancement, freedom, and salary growth. Organizations in these cultures pursue aggressive goals and can have high levels of stress and conflict. Organizational success is measured in terms of size, growth, and speed. On the other hand, workers in cultures where achievement is less of a driving value, such as those in Scandinavia, prize the social aspects of work, including working conditions and supervision, and typically favor opportunities to learn and grow at work.

5. Individualism. This value is concerned with looking out for oneself as opposed to one’s group or organization. In high-individualism cultures, such as the United States and Australia, personal initiative and competitiveness are valued strongly. Organizations in individualistic cultures often have high turnover rates and individual rather than group decision-making processes. Employee empowerment is supported when members believe that it improves the probability of personal gain. These cultures encourage personal initiative, competitiveness, and individual autonomy. Conversely, in low individualism countries, such as China, Japan, and Mexico, allegiance to one’s group is paramount. Organizations operating in these cultures tend to favor cooperation among employees and loyalty to the company.

Economic Development In addition to cultural context, an important situational con- tingency affecting OD success is a country’s level of industrial and economic development.10

For example, although long considered an industrial economy, Russia’s political and

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economic transformation, and the concomitant increases in uncertainties over infrastruc- ture, corruption, cash flow, and exchange rates, has radically altered assumptions underlying business practices. Thus, economic development can be judged from social, economic, and political perspectives.11 For example, a country’s development level can be reflected in its information systems and skills; decision-making and action-taking capabilities; project plan- ning and organizing abilities; evaluation and control technologies; leadership, motivational, and reward systems; and human selection, placement, and development levels. The United Nations’ Human Development Programme has created a Human Development Index that assesses a country’s economic development in terms of life expectancy, educational attain- ment, and adjusted real income.

Researchers have identified three broad stages of economic development:

1. Subsistence economies. Countries such as Pakistan, Nepal, Nigeria, Uganda, and Rwanda have relatively low degrees of development and their economies are primarily agriculture-based. Their populations consume most of what they produce, and any surplus is used to barter for other needed goods and services. A large proportion of the population is unfamiliar with the concept of “employment.” Working for someone else in exchange for wages is not common or understood, and consequently few large organizations exist outside of the government. In subsistence economies, OD interven- tions emphasize global social change and focus on creating conditions for sustainable social and economic progress. These change methods are described in Chapter 21.

2. Industrializing economies. Malaysia, Venezuela, India, Turkey, the Philippines, Iran, and the People’s Republic of China are moderately developed and tend to be rich in natural resources. An expanding manufacturing base that accounts for increasing amounts of the country’s gross domestic product fuels economic growth. The rise of manufacturing also contributes to the formation of a class system including upper-, middle-, and low-income groups. Organizations operating in these nations generally focus on efficiency of operations and revenue growth. Consequently, OD interventions address strategic, structural, and work design issues.12 They help organizations identify domestic and international markets, develop clear and appropriate goals, and structure themselves to achieve efficient performance and market growth.

3. Industrial economies. Highly developed countries, such as Sweden, Japan, France, and the United States, emphasize nonagricultural industry. In these economies, man- ufactured goods are exported and traded with other industrialized countries; invest- ment funds are available both internally and externally; the workforce is educated and skilled; and technology is often substituted for labor. Because the OD interven- tions described in this book were developed primarily in industrial economies, they can be expected to have their strongest effects in those contexts. Their continued suc- cess cannot be ensured, however, because these countries are advancing rapidly to postindustrial conditions. Here, OD interventions will need to fit into economies driven by information and knowledge, where service outpaces manufacturing, and where national and organizational boundaries are more open and flexible.

How National Culture and Economic Development Affect OD Interventions The situational contingencies of national culture and economic development can have power- ful effects on the way OD interventions are designed and implemented in various coun- tries.13 They can determine whether change proceeds slowly or quickly; involves few or many members; is directed by hierarchical authority or by consensus; and focuses on business, organizational, or human process issues. When the two situational contin- gencies are considered together, they reveal four different international settings for

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OD practice, as shown in Figure 7.1. These different situations reflect the extent to which a country’s culture fits with traditional OD values of direct and honest communication, sharing power, and improving their effectiveness and the degree to which the country is economically developed.14 When the country’s culture supports traditional OD values, OD interventions can be applied to organizational and human process issues with only small adjustments.15 The more the cultural context differs from OD’s traditional values profile, the more the interventions will need to be modified to fit the situation.

In Figure 7.1, the degree of economic development is restricted to industrializing and highly industrialized regions. Subsistence economies are not included because they afford little opportunity to practice traditional OD; in those contexts, a more appropriate strategy is global social change, discussed later in Chapter 21. In general, however, the more developed the economy, the more OD is applied to the organizational and human process issues described in this book. In less-developed situations, OD focuses on busi- ness issues, such as procuring raw materials, producing efficiently, and marketing suc- cessfully.16 As shown in Figure 7.1, the four international settings include the following:

1. Low cultural fit, moderate industrialization. This context is least suited to tradi- tional OD practice. It includes industrializing economies with some cultural values that align poorly with traditional OD values, including many Middle East nations, such as Iraq, Iran, and the United Arab Emirates; the South Pacific region, including Malaysia and the Philippines; and certain Central and South American countries, such as Brazil, Ecuador, Guatemala, and Nicaragua. These regions are highly depen- dent on their natural resources and have a relatively small manufacturing base. They tend to be high-context cultures with values of high power-distance and achieve- ment orientation and of moderate uncertainty avoidance, but they also tend toward moderate or high levels of collectivism, especially in relation to family.

These settings require OD interventions that fit local customs and that address business issues. Cultural values of high power-distance and achievement are incon- sistent with traditional OD activities emphasizing openness, collaboration, and

FIGURE 7.1

The Cultural and Economic Contexts of International OD Practice

Moderate

High

HighLow

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168 PART 2 THE PROCESS OF ORGANIZATION DEVELOPMENT

empowerment. Moreover, executives in industrializing economies frequently equate OD with human process interventions, such as team building, training, and conflict management. They often perceive OD as too soft to meet their business needs. For example, Egyptian and Filipino managers tend to be autocratic, engage in protracted decision making, and focus on economic and business problems. Consequently, organizational change is slow paced, centrally controlled, and aimed at achieving technical rationality and efficiency.17

These contextual forces do not influence all organizations in the same way. A recent study of 20 large group interventions in Mexico suggests that culture may not be as constraining as has been hypothesized.18 Similarly, in an apparent exception to the rule, the president of Semco S/A (Brazil), Ricardo Semler, designed a highly participative organization.19 Most Semco employees set their own working hours and approve hires and promotions. Information flows downward through a relatively flat hierarchy, and strategic decisions are made participatively by companywide vote. Brazil’s cultural values are not as strong on power distance and masculinity as in other Latin American countries, and that may explain the apparent success of this high-involvement organization. It suggests that OD interventions can be implemented within this cultural context when strongly supported by senior management.

2. High cultural fit, moderate industrialization. This international context includes industrializing economies with cultures that align with traditional OD values. Such settings support the kinds of OD processes described in this book, especially technos- tructural and strategic interventions that focus on business development. According to data on economic development and cultural values, relatively few countries fit this context. India’s industrial base and democratic society are growing rapidly and may fit this contingency. Similarly, South Africa’s recent political and cultural changes make it one of the most interesting settings in which to practice OD.20

A study of large South African corporations suggests the directions that OD is likely to take in that setting.21 The study interviewed internal OD practitioners about key organizational responses to the political changes in the country, such as the free election of Nelson Mandela, abolishment of apartheid, and the Reconstruction and Development Program. Change initiatives at Spoornet, Eskom, and Telkom, for example, centered around two strategic and organizational issues. First, the political changes opened up new international markets, provided access to new technologies, and exposed these organizations to global competition. Consequently, these firms initiated planned change efforts to create corporate visions and to identify strategies for entering new markets and acquiring new technologies. Second, the political changes forced corporations to modify specific human resources and organizational practices. The most compelling change was mandated affirmative action quotas. At Spoornet, Eskom, and Telkom, apartheid was thoroughly embedded in the organiza- tions’ structures, policies, and physical arrangements. Thus, planned change focused on revising human resources policies and practices. Similarly, organizational struc- tures that had fit well within the stable environment of apartheid were outmoded and too rigid to meet the competitive challenges of international markets. Planned changes for restructuring these firms were implemented as part of longer-term strat- egies to change corporate culture toward more egalitarian and market-driven values.

3. Low cultural fit, high industrialization. This international setting includes industri- alized countries with cultures that fit poorly with traditional OD values. Many coun- tries in Central America, Eastern Asia, and Eastern Europe fit this description. Reviews of OD practice in those regions suggest that planned change includes all four types of interventions described in this book, although the change process itself

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is adapted to local conditions.22 For example, Mexico, Venezuela, China, Japan, and Korea are high-context cultures where knowledge of local mannerisms, customs, and rituals is required to understand the meaning of communicated information. To function in such settings, OD practitioners must know not only the language but the social customs as well. Similarly, cultural values emphasizing high levels of power distance, uncertainty avoidance, and achievement orientation foster organiza- tions where roles, status differences, and working conditions are clear; where auto- cratic and paternalistic decisions are expected; and where the acquisition of wealth and influence by the powerful is accepted. OD interventions that focus on social processes and employee empowerment are not favored naturally in this cultural con- text and consequently need to be modified to fit the situations.

Japanese and Korean organizations, such as Matsushita, Nissan, Toyota, Fujitsu, NEC, and Hyundai, provide good examples of how OD interventions can be tailored to this global setting. These firms are famous for continuous improvement and qual- ity management practices, and they adapt these interventions to fit the culture. In Asia, OD is an orderly process, driven by consensus and challenging performance goals. Organizational changes are implemented slowly and methodically, roles and behaviors are highly specified so trust builds and change-related uncertainty is reduced. Teamwork and consensus decision-making practices associated with quality-improvement projects also help to manage uncertainty. When large numbers of employees are involved, information is spread quickly and members are kept informed about the changes taking place. Management controls the change process by regulating the implementation of suggestions made by the problem-solving groups. Because these interventions focus on work processes, teamwork and employee involvement do not threaten the power structure. Moreover, continuous improvement interventions do not alter the organization radically but produce small, incremental changes that can add up to impressive gains in long-term pro- ductivity and cost reduction. Because Asian values promote a cautious culture that prizes consensus, dignity, and respect, OD tends to be less personal and to focus mainly on workflow improvements. Human process issues are rarely addressed because people are expected to act in ways that do not cause others to “lose face” or to bring shame to the group.

In these cultures, OD practitioners also tailor the change process itself to fit local conditions. Mexican companies, for example, expect OD practitioners to act as experts and to offer concrete advice on how to improve the organization. To be successful, OD practitioners need sufficient status and legitimacy to work with senior manage- ment and to act in expert roles.23 Status typically is associated with academic creden- tials, senior management experience, high-level titles, or recommendations by highly placed executives and administrators. As might be expected, the change process in Latin America is autocratic and driven downward from the top of the organization. Subordinates or lower-status people generally are not included in diagnostic or imple- mentation activities because inclusion might equalize power differences and threaten the status quo. Moreover, cultural norms discourage employees from speaking out or openly criticizing management. There is relatively little resistance to change because employees readily accept changes dictated by management.

4. High cultural fit, high industrialization. This last setting includes industrialized countries with cultural contexts that fit well with traditional OD values. Much of the OD practice described in this book was developed in these situations, particularly in the United States and the United Kingdom,24 and so we focus here on how OD is practiced in Scandinavian countries—Sweden, Norway, Finland, and Denmark.

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Scandinavians enjoy a high standard of living and strong economic develop- ment. Because their cultural values most closely match those traditionally espoused in OD, organizational practices are highly participative and egalitarian. It is not surprising, then, that Scandinavian companies, including Saab and Volvo, pio- neered sociotechnical interventions to improve productivity and quality of work life. Multiple stakeholders, such as governments, managers, unionists, and staff personnel, actively are involved in all stages of the change process, from entry and diagnosis to intervention and evaluation. The Norwegian government, for example, was instrumental in introducing industrial democracy to that nation’s companies. It helped union and management in selected industries implement pilot projects to enhance productivity and quality of work life. This level of involvement is much higher than that typically occurring in the United States. It results in a change process that is heavily oriented to the needs of all organiza- tion members. Norwegian labor laws, for example, give unionists the right to participate in technological innovations that can affect their work lives. Such laws also mandate that all employees in the country have the right to enriched forms of work.

7-3b Contingencies Related to the Target of Change OD interventions often seek to change specific features or parts of organizations. These targets of change are the main focus of many interventions, and researchers have identi- fied two key contingencies related to change targets that can affect intervention success: the organizational issues that the intervention is intended to resolve and the level of organizational system at which the intervention is expected to have a primary impact.

Organizational Issues Organizations need to address certain issues to operate effec- tively. Figure 7.2 lists these issues along with the OD interventions that are intended to resolve them. (The parts and chapters of this book that describe the specific interven- tions are also identified in the figure.) It shows the following four interrelated issues that are key targets of OD interventions:

1. Strategic issues. Organizations need to decide what products or services they will provide and the markets in which they will compete, as well as how to relate to their environments and how to transform themselves to keep pace with changing conditions. These strategic issues are among the most critical ones facing organiza- tions in today’s changing and highly complex environments. Strategic change inter- ventions address these issues.

2. Technological and structural issues. Organizations must decide how to divide work into departments and then how to coordinate among those departments to support strategic directions. They also must make decisions about how to deliver products or services and how to link people to tasks. Technostructural interventions deal with these structural and technological issues.

3. Human resources issues. These issues are concerned with attracting talented people to the organization, setting goals for them, appraising and rewarding their perfor- mance, and ensuring that they develop their careers and sustain their wellness. Human resources management interventions attend to these issues.

4. Human process issues. These issues have to do with social processes occurring among organization members, such as communication, decision making, leadership, and group dynamics. Human process interventions focus on these kinds of issues.

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FIGURE 7.2

Types of OD Interventions and Organizational Issues

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Consistent with systems theory as described in Chapter 5, these organizational issues are interrelated and need to be integrated with one another. The double-headed arrows connecting the different issues in Figure 7.2 represent the fits or linkages among them. Organizations need to match answers to one set of questions with answers to other sets of questions to achieve high levels of effectiveness. For example, decisions about gaining competitive advantage need to fit with choices about organization structure, setting goals for and rewarding people, communication, and problem solving.

The interventions presented in this book are intended to resolve these different con- cerns. As shown in Figure 7.2, particular OD interventions apply to specific issues. Thus, intervention design must create change methods appropriate to the organizational issues identified in diagnosis. Moreover, because the organizational issues are themselves linked together, OD interventions similarly need to be integrated with one another. For example, a goal-setting intervention that tries to establish motivating goals may need to be integrated with supporting interventions, such as a reward system that links pay to goal achievement.

The key point is to think systemically.25 Interventions aimed at one kind of organi- zational issue will invariably have repercussions on other kinds of issues. Careful think- ing about how OD interventions affect the different kinds of issues and how different change programs might be integrated to bring about a broader and more coherent impact on organizational functioning is critical to effective OD intervention.

Organizational Levels In addition to facing interrelated issues, organizations function at different levels: individual, group, organization, and transorganization. Thus, organi- zational levels are targets of change in OD. Table 7.2 lists OD interventions in terms of the level of organization that they primarily affect. For example, some technostructural interventions affect mainly individual jobs and groups (e.g., work design), whereas others impact primarily the total organization (e.g., structural design).

It is important to emphasize that only the primary level affected by the intervention is identified in Table 7.2. Many OD interventions also have a secondary impact on the other levels. For example, structural design affects mainly the organization level, but it can have an indirect effect on groups and individual jobs because it sets the broad para- meters for designing work groups and jobs. Again, practitioners need to think systemi- cally. They must design interventions to apply to specific organizational levels, address the possibility of cross-level effects, and integrate interventions affecting different levels to achieve overall success.26 For example, an intervention to create self-managed work teams may need to be linked to organization-level changes in measurement and reward systems to promote team-based work.

SUMMARY

This chapter discussed designing OD interventions including the four major types of interventions that are presented in this book: (1) human process interventions aimed at people within organizations and their interac- tion processes; (2) technostructural interventions directed at organization technology and structures for linking people and technology; (3) human resource management interventions focused at integrating people into the

organization successfully; and (4) strategic change inter- ventions targeted at how the organization uses its resources to gain a competitive advantage in the larger environment. Designing OD interventions is based on a thorough diagnosis of the organization or subunit. Effec- tive interventions are designed to fit the needs of the organization, are based on causal knowledge of intended outcomes, and transfer competence to manage change to

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TABLE 7.2

Types of Interventions and Organization Levels

Primary Organization Level Affected

Interventions Individual Group Organization

Human Process (Part 3) Process consultation X Third-party interventions X X Team building X Organization confrontation meeting X X Intergroup relations interventions X X Large group interventions X

Technostructural (Part 4) Structural design X Downsizing X Reengineering X X Parallel structures X X Total quality management X X High-involvement organizations X X X Work design X X

Human Resources Management (Part 5) Goal setting X X Performance appraisal X X Reward systems X X X Coaching and mentoring X Management and leadership development X Career planning and development

interventions X

Workforce diversity interventions X X X Employee stress and wellness interventions X

Strategic (Part 6) Organization design X Integrated strategic change X Culture change X Dynamic strategy making X Self-designing organizations X X Organization learning and knowledge

management X X

Built-to-change X Merger-and-acquisition integration X Strategic alliance interventions X Network interventions X

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