Organization Development and Reinventing the Organization

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Chapter 1

• Organization Development and Reinventing the
  Organization

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Learning Objectives

• Define OD and recognize need for change.
• Describe culture and understand its impact.
• Understand the psychological contract.
• Describe five stages of OD.

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The Workout Organization Changes at GE (part 1
of 2)

• GE has training center for managers.
• Participants said GE was slow to make changes.
• Workout is program that came from sessions.

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The Workout Organization Changes at GE (part 2
of 2)

• In workout employees take the leadership in
  bringing about changes.
• GE continues to use workout so it can reinvent
  itself.

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Challenges for Organizations

• Change avalanching down on us.
• Tomorrows world different from todays.
• Organizations need to adapt to change.
• Organizations in continuous interaction with
  external forces.

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Figure 1.1The Organizational Environment
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What Is OD?

• Long-range efforts and programs aimed at
  improving an organizations ability to survive by
  changing problem-solving and renewal processes.

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OD Is

• Planned.
• Organization wide.
• Managed from top.
• Increases organization effectiveness.
• Planned interventions.
• Uses behavioral science knowledge.

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The Characteristics of OD

• Planned change.
• Collaborative approach.
• Improve performance.
• Humanistic values.
• Systems approach.
• Scientific approaches.

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Table 1.1Major Characteristics of the Field of OD
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Our Changing World Germany in Slow-mo (part 1
of 2)

• Germany entering 2nd decade of stagnation.
• A model of world in 70s and 80s.
• Reputation as Europes unchanging core.
• History of blaming others for problems.

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Our Changing World Germany in Slow-mo (part 2
of 2)

• Some looking inward for causes.
• Problem traced to job-protection law of 50s.
• Unions block proposals to reform labor laws.

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Why OD?

• Most cited reasons for beginning change program
• The level of competition.
• Survival.
• Improved performance.

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Primary Goals of Change Programs

• Increase productivity.
• Increase responsiveness.
• Improve competitive position.
• Increase employee involvement.
• Increase employee morale.
• Develop new managerial skills.

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Table 1.2Major Goals of Large-Scale Change
Programs
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Factors Leading to Emergence of OD

• Need for new organizational forms.
• Focus on cultural change.
• Increase in social awareness.

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The Only Constant Is Change

• Today's managers need new mind-set.
• Flexibility.
• Speed.
• Innovation.
• Constantly changing conditions.

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Successful FirmsShare These Traits

• Faster.
• Quality conscious.
• Employee involvement.
• Customer oriented.
• Smaller.

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Figure 1.2Changing Organization of Twenty-First
Century
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OD in PracticeTrilogy Software (part 1 of 2)

• Trilogy Software example of shifting
  organizational structures.
• Workers are shareholders, managers, and partners.
• Biggest worry is not facing down other businesses.

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OD in PracticeTrilogy Software (part 2 of 2)

• Depends on talented people.
• Economy fostering new kinds of practices.
• This case shows major element in planned change
  is planning for organizational culture.

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Evolution of OD

• Evolved since the late 1940s.
• NTL Laboratory-Training methods.
• Survey research and feedback.

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Who Does OD? (part 1 of 3)

• OD practitioners consist of specialists and those
  applying OD in daily work
• Professionals and specialists trained in OD.
• Managers and leaders applying OD.

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Who Does OD? (part 2 of 3)

• OD specialists
• Internal practitioners from within
  organization.
• External practitioners from outside
  organization.

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Who Does OD? (part 3 of 3)

• Activities include
• Team leaders developing teams.
• Building learning organizations.
• Implementing total quality management.
• Creating boundaryless organizations.

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Organization Culture
A system of shared meanings including

• Dress.
• Patterns of behavior.
• Language.
• Value system.

• Feelings.
• Attitudes.
• Interactions.
• Group norms.

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Norms (part 1 of 2)

• Organized and shared ideas of what members should
  do and feel.
• How behavior is regulated.

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Norms (part 2 of 2)

• Pivotal norms - essential to accomplishing
  organizations objectives.
• Peripheral norms - support and contribute to
  pivotal norms but not essential to organizations
  objectives.

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Socialization Process

• Process that adapts employees to culture.
• New employees become aware of norms.
• Employees encounter culture.
• Individuals understand power, status, rewards,
  and sanctions.

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Figure 1.3The Socialization Process
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Adjustment to Cultural Norms and Socialization
Occurs in 3 Ways

1. Rebellion - rejection of all values and norms.
2. Conformity - acceptance of all values and norms.
3. Creative individualism - acceptance only of
   pivotal values rejection of others.

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Figure 1.4Basic Responses to Socialization
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Psychological Contract

• Unwritten agreement between individuals and
  organization.
• Open-ended so issues may be renegotiated.

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A Model for Change

• OD is continuing process with emphasis on viewing
  organization as total system of interacting and
  interrelated elements.

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Figure 1.5Organization Developments Five Stages
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Five-stage Model for OD Process (part 1 of 5)

• Stage one Anticipating need for change.
• Someone recognizes need for change.
• There must be felt need for change.

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Five-stage Model for OD Process (part 2 of 5)

• Stage two Developing practitioner-client
  relationship.
• OD practitioner enters system.
• Good first impressions and match important.
• Practitioner establishes trust, open
  communication, shared responsibility.

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Five-stage Model for OD Process (part 3 of 5)

• Stage three The diagnostic phase.
• Practitioner and client gather data about system.
• Objective is to understand clients problems,
  identify forces causing situation, and select
  change strategies.

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Five-stage Model for OD Process (part 4 of 5)

• Stage four Action plans, strategies, and
  techniques.
• Series of interventions, activities, or programs
  aimed at increasing effectiveness.
• Programs apply OD techniques.

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Five-stage Model for OD Process (part 5 of 5)

• Stage five Self-renewal, monitor, and stabilize.
• As OD program stabilizes, need for practitioner
  decreases.
• Monitor results.
• Stabilize change.
• Gradual disengagement of OD practitioner.

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Key Words and Concepts

• Action research model - collecting information,
  feeding back to client, developing and
  implementing action programs.
• Change leader - person responsible for change.

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• Client - person or organization that is being
  assisted.
• Creative individualism - questioning of
  peripheral norms, accepting of pivotal norms.
• External practitioner - person from outside
  organization who serves as resource for change.

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• Internal practitioner - internal resource for
  change.
• Norms - organized and shared ideas regarding what
  members should do and feel, how behavior should
  be regulated, and what sanctions should be
  applied.

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• Organization culture - system of shared meanings,
  including language, dress, values, norms of
  organization.
• Organization development - planned strategy to
  bring about change.
• OD practitioner - people using, advocating, and
  assisting others to implement OD.

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• OD specialist - professional who has specialized
  and trained in OD and related areas.
• Peripheral norms - support and contribute to
  pivotal norms but not essential to organization's
  objectives.

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• Pivotal norms - essential to organization's
  objectives.
• Psychological contract - expectations between
  individual and organization.
• Socialization - process of individual adjusting
  to organization's culture.

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Preparations for Next Chapter

• Read Chapter 2.
• Read instructions for Simulation 2.1.
• Read and prepare analysis for Case The NoGo
  Railroad.