ORGANIZATIONAL DEVELOPMENT

MGT 517

Unit 2 Lecture

Unit Learning Outcomes

Unit 2

ULO 1. Discuss how contingencies related to the change situation affect the design of effective

organization development (OD) interventions

ULO 2. Explore the processes of change associated with the five key elements of successful

change management

ULO 3. Illustrate the research design and measurement issues associated with evaluating

organization development (OD) interventions

Overview of Interventions

Interventions rely on four major types of planned change: human process interventions,

techno-structural interventions, human resource management interventions, and

strategic change interventions.

What Are Effective Interventions?

OD interventions involve a set of sequenced and planned actions or events intended to

help an organization increase its effectiveness. 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.

How to Design Effective Interventions

Two major sets of contingencies can affect intervention success: those related to the

change situation and those related to the target of change.

Contingencies Related to the Change Situation

1. National Culture OD practices are heavily influenced by Western values and assumptions.

Table 7.1 identifies five key values that describe national cultures and how

they influence organizational customs.

• Context orientation. This value describes how information is conveyed and time is valued in a culture. Context can be high or low. Low context cultures use words and phrases while high context cultures rely more on nonverbal forms of communication.

• Power distance. This value concerns the way people view authority, status differences, and influence patterns. High power-distance cultures accept unequal distributions of power more easily.

• Uncertainty avoidance. This value reflects a preference for conservative practices and familiar and predictable situations. People in high uncertainty-avoidance regions prefer stable routines and act to maintain the status quo.

• Achievement orientation. This value concerns the extent to which the culture favors the acquisition of power and resources.

• Individualism. This value is concerned with looking out for oneself as opposed to one’s group or organization.

2. Economic Development An important situational contingency affecting OD success is a country’s level

of industrial and economic development. Researchers have identified three

broad stages of economic development.

• Subsistence economies. These countries have relatively low degrees of development and their economies are primarily agriculture-based.

• Industrializing economies. These countries are moderately developed and tend to be rich in natural resources.

• Industrial economies. These countries are highly developed and emphasize nonagricultural industry.

3. How National Culture and Economic Development Affect OD Interventions These situational contingencies can affect how interventions are designed, how quickly change occurs, how many members are involved, and more. Figure 7.1 illustrates the influence of these situational contingencies on OD practice. The four international settings are listed below.

• Low cultural fit, moderate industrialization.

• High cultural fit, moderate industrialization.

• Low cultural fit, high industrialization.

• High cultural fit, high industrialization.

Contingencies Related to the Target of Change

OD interventions often seek to change specific features or part of organizations.

Two key contingencies related to change targets 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.

1. Organizational Issues Organizational issues might include strategic issues, technological and

structural issues, human resource issues, and human process issues. Figure

7.2 illustrates the role these issues might play.

2. Organizational Levels Organizations function at different levels and these issues affect the

organization at different levels. Table 7.2 explains the primary organizational

level affected by these issues.

Overview of Change Activities

Chapter 8 is devoted to a description of the different elements of a planned change process that

the OD practitioner must address to successfully implement change. While not all of the

elements will need to be addressed in all situations, practitioners should routinely check each

one during planned change. In addition, the chapter begins to address the key concern of

leadership. Each of the phases of change can and should be linked to student’s understandings

and beliefs about what effective leadership is all about.

Figure 8.1 illustrates activities related to an effective change process.

Motivation is a critical issue in starting change because ample evidence indicates that

people and organizations seek to preserve the status quo and are willing to change only

when there are compelling reasons to do so. The second activity is concerned with

creating a vision and is closely aligned with leadership activities. The vision provides a

purpose and reason for change and describes the desired future state. The third activity

involves developing political support for change. Organizations are composed of

powerful individuals and groups that can either block or promote change, and leaders

and change agents need to gain their support to implement changes. The fourth activity

is concerned with managing the transition from the current state to the desired future

state. It involves creating a plan for managing the change activities as well as planning

special management structures for operating the organization during the transition. The

fifth activity involves sustaining momentum for change so that it will be carried to

completion.

Motivating Change

Organizational change involves moving from the known to the unknown. Because the

future is uncertain and may adversely affect people’s competencies, worth, and coping

abilities, organization members generally do not support change unless compelling

reasons convince them to do so.

Creating Readiness for Change

One of the more fundamental axioms of OD is that people’s readiness for change

depends on creating a felt need for change. The following three methods can

help generate sufficient dissatisfaction to produce change:

• Sensitize organizations to pressures for change.

• Reveal discrepancies between current and desired states.

• Convey credible positive expectations for the change.

Overcoming Resistance to Change

At a personal level, change can arouse considerable anxiety about letting go of

the known and moving to an uncertain future. At the organization level,

resistance to change can come from three sources. Technical resistance comes

from the habit of following common procedures and the consideration of sunk

costs invested in the status quo. Political resistance can arise when

organizational changes threaten powerful stakeholders, such as top executive or

staff personnel, or call into question the past decisions of leaders. Organization

change often implies a different allocation of already scarce resources, such as

capital, training budgets, and talented people. Finally, cultural resistance takes

the form of systems and procedures that reinforce the status quo, promoting

conformity to existing values, norms, and assumptions about how things should

operate. There are at least three major strategies for positively dealing with

resistance to change:

• Empathy and support • Communication • Participation and involvement

Creating a Vision

A vision describes the core values and purpose that guide the organization as well as an

envisioned future toward which change is directed. It provides a valued direction for

designing, implementing, and assessing organizational changes. The vision also can

energize commitment to change by providing members with a common goal and a

compelling rationale for why change is necessary and worth the effort. Research

suggests that compelling visions are composed of two parts: (1) a core ideology or

relatively stable identity that describes the organization’s core values and purpose, and

(2) an envisioned future with bold goals and a vivid description of the desired future state

that reflects the specific change under consideration

Describing the Core Ideology

The fundamental basis of a vision for change is the organization’s core ideology.

It describes the organization’s core values and purpose and is relatively stable

over time. Core values typically include three to five basic principles or beliefs

that best represent what the organization stands for. Although the vision

ultimately describes a desired future, it must acknowledge the organization’s

historical roots—the intrinsically meaningful core values and principles that have

guided and will guide the organization over time. Core values are not “espoused

values”; they are the “values-in-use”.

Constructing the Envisioned Future

The envisioned future typically includes the following two elements that can be

communicated to organization members:

• Bold and valued outcomes

• Desired future state

Developing Political Support

As shown in Figure 8.2, managing the political dynamics of change includes the

following activities: assessing the change agent’s power, identifying key stakeholders,

and influencing stakeholders.

Assessing Change Agent Power

The first task is to evaluate the change agent’s own sources of power. This agent

may be the leader of the organization or department undergoing change, or he or

she may be the OD practitioner if professional help is being used. By assessing

their own power base, change agents can determine how to use it to influence

others to support changes. They also can identify areas in which they need to

enhance their sources of power.

Identifying Key Stakeholders

Having assessed their own power bases, change agents should identify powerful

individuals and groups with an interest in the changes, such as staff groups,

unions, departmental managers, and top-level executives. These key

stakeholders can thwart or support change, and it is important to gain broad-

based support to minimize the risk that a single interest group will block the

changes.

Influencing Stakeholders

This activity involves gaining the support of key stakeholders to motivate a critical

mass for change. There are at least three major strategies for using power to

influence others in OD: playing it straight, using social networks, and going

around the formal system. Figure 8.2 links these strategies to the individual

sources of power.

Managing the Transition

Implementing organization change involves moving from an existing organization state

to a desired future state. Such movement does not occur immediately but, as shown in

Figure 8.3, instead requires a transition period during which the organization learns how

to implement the conditions needed to reach the desired future.

Activity Planning

Activity planning involves making a road map for change, citing specific activities

and events that must occur if the transition is to be successful. It should clearly

identify, temporally orient, and integrate discrete change tasks, and it should

explicitly link these tasks to the organization’s change goals and priorities.

Activity planning also should gain top management approval, be cost-effective,

and remain adaptable as feedback is received during the change process.

Commitment Planning

This activity involves identifying key people and groups whose commitment is

needed for change to occur and formulating a strategy for gaining their support.

Change-Management Structures

Because organizational transitions tend to be ambiguous and to need direction,

special structures for managing the change process need to be created. These

management structures should include people who have the power to mobilize

resources to promote change, the respect of the existing leadership and change

advocates, and the interpersonal and political skills to guide the change process.

Learning Processes

Research suggests that change is sustained best when new management

practices are implemented to reinforce learning.

Sustaining Momentum

Five activities can help to sustain momentum for carrying change through to completion:

providing resources for change, building a support system for change agents,

developing new competencies and skills, reinforcing new behaviors, and staying the

course.

Providing Resources for Change

Implementing organization change generally requires additional financial and

human resources, particularly if the organization continues day-to-day operations

while trying to change itself. These extra resources are needed for such change

activities as training, consultation, data collection and feedback, and special

meetings.

Building a Support System for Change Agents

A support system typically consists of a network of people with whom the change

agent has close personal relationships—people who can give emotional support,

serve as a sounding board for ideas and problems, and challenge untested

assumptions.

Developing New Competencies and Skills

Change agents must ensure that such learning occurs. They need to provide

multiple learning opportunities, such as traditional training programs, on-the-job

counseling and coaching, and experiential simulations, covering both technical

and social skills.

Reinforcing New Behaviors

One of the most effective ways to sustain momentum for change is to reinforce

the kinds of behaviors needed to implement the changes. This can be

accomplished by linking formal rewards directly to the desired behaviors.

Staying the Course

Change requires time, and many of the expected financial and organizational

benefits from change lag behind its implementation. If the organization changes

again too quickly or abandons the change before it is fully implemented, the

desired results may never materialize.

Chapter 9 focuses on the final stage of the organization development cycle—evaluation and

institutionalization. Evaluation is concerned with providing feedback to practitioners and

organization members about the progress and impact of interventions. Institutionalization is a

process for maintaining a particular change for an appropriate period of time. It ensures that the

results of successful change programs persist over time.

Evaluating Organization Development Interventions

There are two types of evaluation efforts. The first involves collecting information about

how well an intervention is progressing so that modifications in the implementation can

take place. The second involves a determination about the impact of the intervention on

the organization. To isolate the impact, the OD practitioner must find ways to rule out

alternative explanations. This is not often an easy task and requires the practitioner to

understand research design issues and to apply them creatively.

Implementation and Evaluation Feedback

Evaluation should include during-implementation assessments and after-

implementation evaluation. Evaluation focused on guiding implementation may

be called implementation feedback and assessment intended to discover

intervention outcomes may be called evaluation feedback. Figure 9.1 shows the

two kinds of feedback fit with diagnostic and intervention stages of OD.

After an invention has been in place for a period of time such as 3 months,

members use implementation feedback to see how the intervention is

progressing. Additional implementation feedback sessions may be used at other

time periods further in the process. Once the intervention is fully implemented,

evaluation feedback is used to assess overall effectiveness of the program. The

evaluation feedback includes all the data from the measures used during the

implementation feedback as well as additional measures.

Measurement

Providing useful implementation and evaluation feedback involves two activities:

(1) selecting the appropriate variables, and (2) designing good measures for

them.

1. Selecting Appropriate Variables The variables should derive from the theory or model underlying the

intervention. Historically, OD assessment has focused on attitudinal

outcomes more so than performance outcomes.

2. Designing Good Measures The measures used should be operationally defined, reliable, and valid.

a. Operational Definition. This means that the empirical data needed is specified along with how the data will be collected and how it will be converted to information. Table 9.1 includes several operational definitions.

b. Reliability. This concerns the extent to which a measure represents the true value of the variable. It assesses accuracy of the operational definition.

c. Validity. This concerns the extent to which the measure actually reflects the variable it is intended to measure. Validity can be assessed in several ways including face (or content) validity, criterion (or convergent) validity, and predictive validity.

Research Design

In addition to measurement, OD practitioners must make choices about how to

design the evaluation to achieve valid results. The key issue is how to design the

assessment to show whether the intervention did in fact produce the observed

results. This is called internal validity. The second question is whether the

intervention would work similarly in other situations and this is called external

validity. Practitioners have used quasi-experimental designs to assess OD

interventions. Table 9.3 provides an example of a quasi-experimental design

having the following three features.

• Longitudinal measurement involves measuring results repeatedly over relatively long periods of time.

• Comparison unit means measuring outcomes at a location with the intervention and one without any intervention.

• Statistical analysis will be used to rule out the possibility that the results are caused by random error or chance.

Institutionalizing Organizational Changes

Recall that Lewin described change as occurring in three stages: unfreezing, moving,

and refreezing. Institutionalizing interventions means to refreeze. Refreezing ensures

that the change lasts. Figure 9.2 provides a framework for identifying the factors and

processes that contribute to the institutionalization of OD interventions including the

process of change itself.

Institutionalization Framework

The model shows that two key antecedents—organization and intervention

characteristics—affect different institutionalization processes operating in

organizations. These processes then affect various indicators of

institutionalization.

Organization Characteristics

Organization characteristics include three specific dimensions which can affect

intervention.

• Congruence is the degree to which an intervention is perceived as being in harmony with the organization’s managerial philosophy, strategy, and structure; its current environment; and other changes.

• Stability of environment and technology refers to the degree to which the organization’s environment and technology are changing. The persistence of change is favored with environments are stable.

• Unionization tends to make interventional institutionalization more difficult.

Intervention Characteristics

Intervention characteristics include five features that affection the

institutionalization process.

• Goal specificity involves the extent to which intervention goals are specific rather than broad. Specificity helps direct socializing activities to particular behaviors required to implement the intervention.

• Programmability involves the degree to which the changes can be programmed or the extent to which the different intervention characteristics can be specified clearly in advance.

• Level of change target at total organization, department, or small work group levels.

• Internal support refers to the degree to which there is an internal support system to guide the change process.

• Sponsorship concerns the presence of a powerful sponsor who can initiate, allocate, and legitimize the resources for the intervention.

Institutionalization Processes

Institutionalization processes include five processes which directly affect the

degree to which OD interventions are institutionalized.

• Socialization concerns the transmission of information about beliefs, preferences, norms, and values with respect to the intervention.

• Commitment binds people to behaviors associated with the intervention.

• Reward allocation involves linking rewards to the new behaviors required by an intervention.

• Diffusion refers to the process of transferring changes from one system to another.

• Sensing and calibration involves detecting deviations from desired intervention behaviors and taking corrective action.

Indicators of Institutionalization

Indicators of institutionalization reveal the extent of an intervention’s persistence.

• Knowledge is the extent to which the organization members have knowledge of the behaviors associated with the intervention.

• Performance is the degree to which the intervention behaviors are actually performed.

• Preference involves the degree to which organization members privately accept the organizational changes.

• Normative consensus focuses on the extent to which people agree about the appropriateness of the organizational changes.

• Value consensus is concerned with social consensus on values relevant to the organizational changes.