Parallel Organization Policy Formulation, Learning, and Interdivision - Journal of Applied Behavioral Science-2014-Hawk-307-36

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Parallel Organization: Policy Formulation, Learning, and Interdivision

Integration
Thomas F. Hawk and Dale E. Zand
Journal of Applied Behavioral Science 2014 50: 307 originally published online 3
December 2013
DOI: 10.1177/0021886313509276
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JAB50310.1177/0021886313509276The Journal of Applied Behavioral ScienceHawk and Zand
Article
Parallel Organization: Policy

Formulation, Learning, and
Interdivision Integration
The Journal of Applied Behavioral Science

2014, Vol. 50(3) 307336
The Author(s) 2013
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DOI: 10.1177/0021886313509276
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Thomas F. Hawk1 and Dale E. Zand2
Abstract
A parallel organization improves problem solving and decision making by liberating
creative, rigorous inquiry blocked or unavailable in the formal organization. This
article reports a study of a parallel organization unusual for its structure, size, and
duration. Its outputs significantly affected a wide range of organizational policies in
manufacturing, strategic planning, and human resources. Its structure, staffing, and
process improved organizational practices, relationships, learning, and communication.
The case provides a valuable extension and contrast to other cases and enlightens
views of theory and practice.
Keywords
parallel organization, collateral organization, strategic issues, organization learning,
organization change, strategic change
Zand (1974) proposed using a parallel organization (PO) as a system-wide, strategic
change intervention to define and solve complex, ill-defined strategic issues when
those issues have been poorly handled, suppressed, ignored, or missed by the formal
operating organization (OO). Formal OOs rely on authority, hierarchy, specialization,
and division of labor to produce goods and services by funneling activities into welldefined, predictable, repetitive routines. However, OOs often do not cope well with
unique, ill-defined, system-wide, complex, or strategic issues that require the knowledge, experience, and insight of people from many organizational levels and locations
working together in a collaborative, creative mode.
1Frostburg
2New
State University, Frostburg, MD, USA

York University, New York, NY, USA
Corresponding Author:
Thomas F. Hawk, PhD, Professor of Management, Emeritus, College of Business, Frostburg State
University, Braddock Road, Frostburg, MD 21532, USA.
Email: thawk@frostburg.edu
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The Journal of Applied Behavioral Science 50(3)
Modified to fit an organizations specific issues, internal conditions, and external

context, the PO, with different labels and forms, has been for many years an active,
basic intervention for organizational effectiveness, learning, cohesion, and strategic
change (e.g., Andriopoulous & Lewis, 2009; Bushe & Shani, 1991).
Our purpose in this article is to enrich knowledge of theory, design, and use of PO
by examining the structure, functioning, outputs, benefits, and limitations of an
unusual PO in a large, multidivision company. The case touches on several points:
How a PO stimulates and embeds self-directed organization learning.
How a PO developed and implemented a range of strategic policy outputs wider
in scope and depth than reported in the literature.
How a key executive played a critical, high-risk, highly visible role in the
design and operation of a complex PO in a traditional authoritarian, silo
organization.
How a PO was scaled up to a size greater than reported elsewhere, qualifying it
as a large system intervention, without giving it that name.
How a complex PO operated for 10 years with practically no organizational
development (OD) consultant intervention, in contrast to most cases that
involve substantial, continuing OD consultant intervention.
We first review theoretical and empirical PO literature. We then examine the case
of a parallel, long-duration, extensive organization that worked on a wide range of
strategic policy issues in a high-volume, manufacturing organization. We next compare insights from the study with the existing theoretical and empirical research. We
conclude with suggestions for OD practitioners and managers of organizations.
Literature Review
Theory of Organization and Tasks
Management designs an organizations structure and systems to deliver a set of products and/or services in a competitive environment (Mintzberg, 1979; Thompson,
1967). To maintain effectiveness and efficiency, management continually strives to fit
activities into well-defined, routinely performed tasks and procedures, that is, to move
work from nonprogrammed to programmed tasks (March & Simon, 1958). For example, banks such as Citibank, automobile manufacturers such as Ford, and credit card
processors such as Visa continually organize work into routine, repetitive tasks, and
procedures to produce high-volume output.
Ill-defined, nonroutine, unpredictable, unique strategic issues, however, differ from
and are more challenging than well-defined, routine, predictable, repetitive issues
(Mintzberg, Raisinghani, & Theoret, 1976). Operating management tends to treat nonroutine, ambiguous issues as an impediment to high-volume production. Managements
motivation is to ignore, delay, or reshape those issues to fit existing operations and
minimally disrupt output. Often, they miss seeing those issues.
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Hawk and Zand
In addition, top management conventionally considers policy issues its domain.

Limited knowledge of decentralized production operations, volatile markets, and rapidly changing environments, however, often leads management to flawed policy and
strategic positioning decisions. Management needs access to information and insight
distributed across divisions and levels of the organization to develop creative policies
and strategic direction while maintaining current production (Zand, 1997).
Managements search process for information and insight, however, often inhibits
information flow, impedes analysis, and arouses defensive protection of the status quo.
Management frequently blames its difficulties on resistance from those lower in the
hierarchy rather than examine its processes which often seek to impose misguided or
imprudent decisions on the rest of the organization (Dent & Goldberg, 1999; Oreg,
2006; Piderit, 2000).
To improve managements decision process, installing a PO may be an appropriate
intervention. A PO forms new networks that link authority levels, functional specialties, organizational units, and vital information sources in a collaborative, creative,
inquiry process.
Parallel Organization Design Principles

The POs original design principles and processes (Zand, 1974), later reiterated and
elaborated (Bush & Shani, 1991), are as follows:
1. The purpose of the PO is to identify, define, and solve problems, usually of a
strategic nature, not solved by the formal, primary, OO. The OO uses an
authority/production mode and the PO uses a knowledge/inquiry mode. The
PO operates beside the formal OO as a coexisting formal organization.
Managers choose the PO or the OO depending on which organization they
judge would better handle the characteristics of the issue or problem.
2. The PO creatively complements the OO; it does not displace the formal OO.
The members of the PO are the same people who work in the OO. The same
people staff the PO as staff the OO.
3. The PO consists of a steering unit (SUN) that guides one or more basic inquiry
units (BINs). The SUN may specify what is not acceptable for the BINs to
explore and may accept or reject issues for inquiry. Inquiry units can only
make recommendations to the SUN. They do not have hierarchical power and
cannot issue directives to the OO.
4. The SUN communicates with the inquiry units in circular feedback loops to
provide guidance, exchange information, and collaboratively shape
recommendations.
5. The outputs of the PO are inputs to the OO. The SUN decides what goes from
the PO to the OO. The value and effectiveness of the PO depends on successfully linking it to the OO, so its outputs are used. The linking mechanisms consist of (a) membershipselecting people with formal power, expertise,
information, and representational knowledgefor the SUN and the inquiry
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units; (b) norms supporting inquiry, collaboration, and consensus in all elements of the PO; and (c) members transferring the inquiry and collaboration
skills learned in the PO and their new network relationships to the OO.
6. The SUN works with inquiry units to determine tasks and review progress. The
SUN may accept, reject, or ask for modification of proposed issues and recommended solutions from the inquiry units. The SUN and the inquiry units mutually
shape the inquiry process and the emerging substance through successive phases
of consensus. The parallel SUN determines what issues they will accept or reject
and may not give reasons for its decisions, although this rarely happens.
7. Inquiry units enable new combinations of people, new channels of communication,
and new ways of seeing old ideas. All channels are open and connected so managers and specialists can communicate freely without being confined to formal OO
channels. An inquiry unit can enlist others in and outside the organization as it
works on soliciting, investigating, analyzing, and recommending action on issues.
8. The PO process operates with exploratory-inquiry norms that differ from the
OOs directive-compliance norms. Parallel norms support careful questioning
and analysis of goals, assumptions, methods, alternatives, and evaluation criteria. Parallel norms blend collaborative action research with reasoned problem
definition and solving by encouraging new ideas, different perspectives, creative approaches to obstacles, and rapid exchange of relevant information. PO
members are encouraged to transfer inquiry and collaboration skills to the OO.
In this case study, management used these principles as the template for structuring
its PO and writing its guide manual. These eight principles are core PO dimensions
(see Table 1) that were common and essential to PO functioning in the empirical studies reviewed later in this article.
Table 1. Conceptual Dimensions of a Parallel Organization (Zand, 1974).
1.The purpose of the PO is to identify, define, and solve issues of a strategic nature (ill-defined, nonroutine,
unpredictable, and ambiguous).
2. The PO creatively complements the operating organization (OO); it does not displace the formal OO.
3. The PO consists of a steering unit (SUN) that guides one or more basic inquiry units (BINs).
4.The SUN communicates with the BINs in circular feedback loops to provide guidance, exchange information, and
collaboratively shape recommendations.
5. Outputs of the PO mode are the inputs to the OO mode.
6. The SUN works with the BINs to determine tasks and review progress.
7. BINs enable new combinations of people, new channels of communication, new ways of seeing old ideas.
8.The PO operates with exploratory-inquiry norms (questioning, collaboration, consensus) that differ from the OOs
directive-compliance norms.
Nomenclature and Theory. Since its introduction four decades ago, the PO has been
called various names. Also, authors have emphasized one or more aspects of theory
such as the PO structural relation to the OO, member learning, and focal purpose. For
example, it has been called a parallel learning structure (Boyle, 1984; Bushe, 1987,
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Hawk and Zand
1988, 1989; Bushe & Shani, 1990, 1991; Doyle, Gelinas, & Kraus, 1984; Goodman &
Dean, 1982; Herrick, 1985; Kanter, 1983; Lawler & Mohrman, 1985; Miller, 1978;
Mohrman & Ledford, 1985; Moore, 1986, 1989; Moore & Miners, 1988; Shani, 1987;
Shani, Basuray, & Place, 1986; Shani & Docherty, 2003; Shani & Eberhardt, 1987;
Shani, Pasmore, & Mietus, 1982; Stein & Kanter, 1980). It has also been called a collateral organization (Kilmann, 1982; Rubinstein & Woodman, 1984; Zand, 1974,
1981, 1997), a dual organization (Duncan, 1976; Goldstein, 1978, 1985), and a fusion
organization (Ackerman & Whitney, 1984).
Some propose that total quality management (Juran & DeFeo, 2010), six-sigma
(Ternant, 2001), and quality-of-life programs (Danna & Griffin, 1999) have sufficient
characteristics to qualify as POs. There is also the term ambidextrous organization
(Andriopoulous & Lewis, 2009; Duncan, 1976; OReilly & Tushman, 2004; Raisch &
Bukinshaw, 2008; Tushman & OReilly, 1996) for organizations combining features of
effectively addressing both well-defined and ill-defined issues in exploitation and exploration (Andriopoulous & Lewis, 2009; March, 1991). Then there is the strategic fitness
process (Beer & Eisenstat, 2004; Fredberg, Norrgren, & Shani, 2011) for which a PO
may be a contributing component to the overall cognitive, structural, and procedural
foci. To move beyond the thicket of nomenclature and each labels selective emphasis on
one or another facet of PO theory, we will use the inclusive term parallel organization.
EmpiricalTheoretical Balance. Historically, OD interventions and theory have advanced
by relying on the interplay between empirical case studies and theoretical/conceptual
development (French, Bell, & Zawacki, 2000; Shani & Docherty, 2008). Empirical
case studies have provided descriptions of varying detail of an actual OD intervention,
generally from an action research or grounded theory perspective. The description is
usually longitudinal in character, providing sufficient empirical evidence to illustrate
the practical results and the theoretical dimensions of the intervention. In contrast, a
paper that is essentially theoretical/conceptual in character discusses theory underlying interventions and theoretical characteristics of interventions without empirical evidence to illustrate the theory.
Applying this empirical/theoretical distinction to the 29 parallel literature articles
we reviewed, we found that 15 were essentially theoretical/conceptual in character
with no empirical evidence or minimal anecdotal information to illustrate and support
the conceptual discussion (Ackerman & Whitney, 1984; Boyle, 1984; Bushe & Shani,
1990; Doyle et al., 1984; Duncan, 1976; Goldstein, 1985; Goodman & Dean, 1982;
Herrick, 1985; Kilmann, 1982; Lawler & Mohrman, 1985; Mohrman & Ledford,
1985; Moore, 1986, 1989; Rubinstein & Woodman, 1984; Shani et al., 1986). Theory
in these articles was congruent with Zand (1974) and Table 1.
Nine of the remaining 14 provided a moderate level of conceptual or theoretical
discussion, also congruent with Zand (1974), coupled with limited empirical information for practitioners (Bushe, 1987, 1988, 1989; Goldstein, 1978; Miller, 1978; Moore
& Miners, 1988; Shani, 1987; Shani & Docherty, 2003; Shani et al., 1982).
The final five were rich in both empirical description and theoretical/conceptual grounding (Bushe & Shani, 1991; Kanter, 1983; Shani & Eberhardt, 1987; Stein & Kanter, 1980;
312
Zand, 1974). The case in Kanter (1983), however, presents in greater depth the same case
as in Stein and Kanter (1980). Also, Bushe and Shani (1991) present in greater depth the
same case presented in Shani and Eberhardt (1987). As a result, there are two cases in Zand
(1974, 1981), one case in Kanter (1983), and five cases in Bushe and Shani (1991) that
offer sufficient empirical information and conceptual discussion to compare with the
empirical and conceptual information in the case presented in this article.
Parallel Organization Dimensions. In an earlier review of 17 PO articles, Bushe and
Shani (1990) divided the parallel literature into three loosely defined but not mutually
exclusive groups, based on combinations of two features: (a) the purpose or focal concern of the PO and (b) the duration of the PO. The first group focused on solving
strategic, ill-defined, complex problems and issues with a PO of temporary duration
(e.g., Kilmann, 1982; Zand, 1974, 1981). The second group focused on increasing a
bureaucratic organizations adaptability to a changing environment with a PO of permanent duration (e.g., Goldstein, 1978, 1985; Stein & Kanter, 1980). The third group
focused on transforming the culture and leadership style of a bureaucratic organization
with a permanent PO of evolving structure and process, that is, the PO continues to
exist and function but evolves in both its configuration and processes as the OO transforms from a highly bureaucratic form to a less bureaucratic form (e.g., Bushe, 1988;
Rubinstein & Woodman, 1984; Shani & Eberhardt, 1987).
Emergent Dimensions. We reviewed dimensions in all 29 PO citations introduced earlier. In addition to the conceptual dimensions presented in Table 1, that are characteristic of essentially all five empirical pieces identified earlier, and the purpose and
duration dimensions used by Bushe and Shani (1990), we found eight other dimensions, in the case we present in this article, that are relevant to understanding the use
of the PO intervention in organizational development. We call these other dimensions
emergent dimensions, that is, implicit or barely mentioned facets that we make
explicit because of their relevance to PO functioning and theory. We present those
emergent dimensions, in addition to the purpose and duration dimensions, in Table 2.
Table 2. Emergent Dimensions From Review of Empirical Parallel Organization (PO)
Literature.
1. Purpose of the PO
2. Duration of the PO
3. Structural configuration of the PO
4. Size of the PO in members
5. Character of the support from top executive
6. Nature of the involvement of organizational development consultant(s)
7. Extent of training, if any, of PO members for the PO
8. Process for selecting members for the PO
9. Process for evaluating the PO performance of PO members
10. Output of the PO and degree of persistence of changes emerging from the PO
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Hawk and Zand
Empirical evidence of the emergent dimensions was either totally absent in most
articles or lightly discussed in a small minority of the PO literature reviewed. The
dimension of the key executive role received the most coverage in seven of the articles. In the PO case presented in this article, the emergent dimensions are clearly present and significant.
We now describe the case of Simcors (disguised name) PO. After the case presentation, we discuss the research methodology which used documents and interviews as
the data base for describing Simcors PO structure, process, accomplishments and
developing implications, and conclusions.
Company Background
George Wilson (all names disguised), newly appointed CEO of Simcor, had spent his
entire career of more than 25 years in the company. Simcor, headquartered in the
United States, was a large, wholly owned subsidiary of a major, international firm.
Simcors four divisions, located in different cities, operated as independent profit centers. Each used its own costing methods, pricing policies, product abandonment criteria, and selling activities. More than 80% of Simcors production went to the parent
firm, which could buy products from Simcor competitors if quality, delivery, or pricing was advantageous. At the same time, Simcor could sell to competitors of the parent
firm. Simcor led its industry in production, sales, and process technology for several
decades. Its dominant position, however, depended heavily on parent firm sales, which
were growing but cyclical.
Simcor was primarily a manufacturing firm. Its divisions were hierarchically and
functionally structured with strong top-down, authoritarian management. To get a
sense of its size and structure we note that it employed about 7,500 unionized hourly
employees and 1,150 managerial employees organized in four levels. There were 50 at
headquarters and division top management (A level), 100 in upper-middle management (B level), 300 in lower-middle management (C level), and 700 at the entry management level (D level). A cadre of 400 secretarial and administrative assistants
supported management.
Manufacturing dominated the culture and treated all other functions as secondary
and subservient. Division Managers came up in manufacturing and historically were
the only candidates considered eligible for the CEO position. Manufacturing
technology changed slowly and investment was almost exclusively in plant and
equipment.
CEOs Issues Motivating Parallel Organization

Wilson had moved up through manufacturing to division manager, and then to the key
headquarters staff position of production manager, overseeing production at all four
divisions. After years of service, he had acquired extensive, firsthand knowledge of
the companys operations, culture, and issues. Based on that knowledge, he had several concerns when he became CEO:
314
There was little communication across functions within and across the divisions
and within company headquarters, which led to policy disparities between divisions, poor coordination, and increased costs.
There was little transfer of good practices or useful innovations across Simcor
divisions.
There was little strategic planning in Simcor and the parent firm, which
increased uncertainty in Simcors product and capital investment decisions.
Wilson recognized a need for transformative change to deal with these issues of policy
disparities, poor intra- and interdivision communication, and inadequate strategic
planning. Believing that the deep authoritarian culture and powerful independent divisions would strongly resist change, he consulted an OD specialist in the parent firm.
Their collaboration, during the 5 months before Wilson took office, used much of
Zands (1974) PO theory, structure and inquiry processaccording to the OD specialistin the design and installation of Simcors PO.
Simcors Parallel Organization

On assuming his CEO responsibilities, Wilson convened an off-site retreat for all top,
A-level managers where he and the OD specialist presented details of the PO project.
Small group meetings and plenary discussions resulted in minor modifications and a short
list of initial projects for assignment to inquiry units, which were called Councils. At the
time, Wilson did not indicate that any topics or issues were out of bounds for the PO.
Parallel Structure. Simcors parallel structure can be visualized as a stack of flat, crosssectional networks or pancakes. Each network was a horizontal, cross-division, crossfunctional slice of the formal organization designed to facilitate company-wide,
consensual policy-making. The chairman of each layer acted as the link to the layer
above. The structure was like a stack of pancakes with a pat of butter between each layer.
A steering unit, called the Strategy Council (SC), guided Simcors Parallel
Organization (SPO; see Figure 1). Wilson, the CEO, chaired the steering unit, which
included the four division managers and all nine A-level headquarters staff. Thus, the
steering unit, following PO principles, was linked to managers with key decision
authority in the formal organization.
The inquiry units linked to the formal organization through members with authority
and familiarity with organizational concerns. Ten planning Councils, designated
Councils A through J, reported to the SC. Each Council consisted of four, A-level, top
managers. Every Council had two Support Councils (e.g., A-1 and A-2 for Council A)
consisting of four, B-level, upper-middle managers. Every Support Council had two
Support Teams (e.g., A-1-1 and A-1-2 for Support Council A-1) with four, C-level,
lower-middle managers.
All A-level, top managers were in the Parallel, either in the SC or one of the planning Councils. Participants from middle and lower levels of management were selected
by recommendation of superiors, with final approval by Wilson, the SC chair.
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Hawk and Zand
Figure 1. Parallel organization structure.
The Parallel linked the inquiry units and the steering unit in an extended communication network through their respective chairmen. The 10 planning Council chairs were
observers in the SC. The two Support Council chairs observed their planning Council. The
two Support Team chairs observed their Support Council. Finally, each Support Team had
two participant/observer D-level managers. Thus, all inquiry units were linked through a
chain of participant/observers communicating across the four levels of management.
Division and Function Boundary Spanning Connections. To develop communication across
divisions, all members of a Council came from different divisions and headquarters.
316
To foster communication across functional specialties, all members of a Council, Support Council, or Support Team came from a different functionmanufacturing, marketing, engineering, finance, and human resources. To support communication within
divisions, members of each Support Council and Support Team came from different
functions in the same division.
Parallel Process
Councils and their support groups were the inquiry units of the PO. Each Council was
completely free to investigate its assigned project(s) and develop its policy
recommendation(s).
Inquiry and Consensus. Wilson said, in his charge to the Councils, You have freedom to
inquire and independence. I want high qualityI expect you to understand everything
about a subject. Councils could interview and survey anyone in Simcor, its parent
firm, and any of its subsidiaries. Councils could visit and interview other corporations,
competitors, trade associations, and government agencies. They could attend seminars,
consult experts, employ trainers, buy books, and subscribe to journals.
Council member interviews reported they had tremendous flexibility and could go
anywhere and talk to anyonethere were never any questions. There was no cost
accumulation nor any accounting of time put into the SPO.
All Councils, Support Councils, and Support Teams operated by consensus. Typically
they commented we had to learn to listen and work participatively. This was a radical
departure from the directive, authoritarian culture of the formal organization.
Parallel Organization Guidance and Learning. Council chairs received guidance by periodically reviewing their investigation plan and progress with the Strategy Council. All
other Council Chairs were present as observers. Wilson believed that learning by
observing and working with peers (Bandura, 1986) was an important feature of the
Parallel: I wanted Council chairs to hear each others presentation. When they saw
better work than their own, they would go back to their Council and try to do even
better than what they heard.
Wilson, as Chair of the Strategy Council, also met with each Council twice a year
for a status report and progress review. Council members used these meetings to test
ideas on Wilson and get feedback on potential policy recommendations.
Councils also sought feedback from the line organization by floating ideas for possible policies. Council members
tested ideas on line managers. Wed say were thinking of doing such and such. What do you
think about it? Their comments helped us understand the situation better and warned us of
problems. Also, talking to them eased the way so the policy wouldnt come as a surprise.
Learning within the Councils, Support Councils, and Support Teams emerged in a
social learning process of experimentation, observation, and feedback. The PO
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Hawk and Zand
requirement of consensus impelled participants to draw on each others investigative

competencies, skills, and knowledge, develop new competencies, and invent new
ways to address challenges to their inquiry processes. Also, the chair of each unit, as
observer in the unit higher in the PO, brought back to his unit ideas used by or suggested in the higher unit. Learning was heavily experiential, driven by investigating
and creating new ways to develop policy that would pass scrutiny in the SC.
Collaboration With Strategy Council. After a Council reached consensus on the content
and language of its policy recommendations, the Chair sent the policy document, often
70 to 200 pages plus exhibits, to members of the SC, and the other Council Chairs.
Then the Council Chair made an oral presentation to the SC, with other chairs observing. He described the issues, data gathered, investigative process, analytic concepts,
models, conclusions, and rationale for each recommended policy. The SC asked questions and discussed all aspects of the study.
After determining its level of consensus, the SC accepted, rejected, or asked for
modification of the recommendation. If there were SC objections, the Council Chair
took the policy back to the Council for further work. Consensus by the SC was necessary for acceptance and subsequent transmission of a policy to the line organization. It
was then the responsibility of Simcors Division Managers and staff to implement the
policy.
Through this iterative process of interim consensus and participative review, members learned from each other and continually sharpened their investigative, analytic,
and presentation skills. After the Parallel started operating, Wilson was amazed by
the financial, legal, operational, and personnel information Councils got from the parent firm and other companies.
Wide Scope of Participation

Participation in the Parallel included all 50 of the top, A-level managers. It also
included 80 of the 100 B-level managers, half of the 300 C-level managers, and 84
(12%) of the 700 D-level managers. Councils and Support Councils met once a month
and were active for the 10-year life of the Simcor PO. Support Teams were intermittently activated, generally for policy audits.
Generating and Processing Proposals. To uncover issues, Wilson asked all managers, top A
through lower D level, to propose inquiry projects. Council I collected, cataloged, consolidated, evaluated, and recommended selected Projects to the SC. After 2 years and 4
months of successful Parallel operation, Council I was renamed Council Z and, in addition to soliciting issues from the organization, generated Strategic Issues on its own.
Council-I members
evaluated proposals for potential long-range benefit and economic value. We had to screen
out many proposals that were personal gripes. We developed categories for proposals: (1)
Return to Linemeaning existing system and policies can handle this with proper
318
communication and execution; (2) Cancelled Tacticalmeaning its a problem but its not
sufficiently strategic, its tactical, and the line should work on it; (3) Cancelled Duplicate
the proposal is, or can be, part of an already accepted proposal; (4) Acceptedit should go
to the Strategy Council for consideration.
There was, however, no follow-up by Councils I and Z on issues designated Return to

Line or Cancelled Tactical.
Sources of Proposals and Policies. Proposals came from all levels of management (see
Table 3); however, the major source gradually shifted from the lower to the upper
levels as the PO aged and matured. During the SPOs first 28 months, Council I considered 218 issue proposals. Almost two thirds (139) came from lower-middle, C-level
managers. During the last 7 years, Council Z considered another 167 proposals, 47 of
which came from within Council Z. The source shifted to the top two A and B levels
of management which together generated almost 70% of the proposals. Council members noted that by the later stages of the Parallel, people had learned the difference
between a personal gripe, a tactical issue, and a strategic issue which led to a reduced
number of proposals submitted from lower levels.
Although proposals came from all levels of management, the majority of policiesthat
is, 29 (73%) of the 40 completed policiescame from A-level proposals (see Table 3).
Table 3. Projects and Author Management Level.
Management level
Proposed
Rejecteda
Accepted
Policies
Level A
Level B
Level C
Level D
Unknown
Total
131
93
38
29
62
60
2
1
149
136
13
3
5
5
0
0
38
30
8
7
385
324
61
40
a.Cancelled (tactical, duplicate) or returned to line.
One explanation for the predominance of Level-A proposals in completed policies

is that A-level managers, compared with lower managers, had a better strategic overview of Simcor and its problems, coupled with a long employment history at Simcor
where they had worked their way up the hierarchical ladder. A second explanation is
that their status as A-level managers in the hierarchy gave them significant political
influence with Councils I and Z and A-level colleagues on the SC during the approval
process in the SC.
In addition to lower levels learning to self-censor nonstrategic proposals, a number
of Level-C and -D managers encountered persistent resistance when they submitted
proposals challenging the CEO and A-level managers fundamental strategic view of
Simcor as (a) a captive supplier of existing products to the parent firm and (b) a functionally structured firm across and within the divisions. Given that the parent firm
owned Simcor and determined and bought the vast majority of Simcors output, those
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Hawk and Zand
proposals were not acceptable to the CEO and the SC. Furthermore, the SC noted that
Simcor was comfortably profitable, a leader in its industry and saw no significant
threats to its position.
Wide Range of Completed Policies

Parallel policies focused on an extremely wide range of important issues previously
ignored or intractable in Simcors autonomous, self-contained divisions. The PO grouped
the policies into five broad categories: (a) Administrative-Financial, (b) FacilitiesEquipment, (c) Strategy-Markets, (d) Personnel, and (e) Products-Production. For a list of
the 40 completed policies, see Table 4.
Below we look at sample policies.
Costing for Pricing

Simcor was a high-volume manufacturing firm in a competitive industry with low
profit margins. Costs determined prices and cost miscalculations seriously affected
profitability and product decisions. Each division had its own costing policy and the
price of a product could vary across divisions.
The investigating Council consulted experts and sources in and out of the company.
According to the Council,
We sharpened our knowledge of costing and evaluated Simcors pricing methods. We found
allocation of burden, a major component of cost, varied across Divisions. They used volume,
or direct labor, or direct materials or a combination so some products absorbed more or less
burden, often unrelated to actual usage. Product yields and scrap varied and often was not
reflected in costs. We studied a standard set of products and found price variations for the
same product across the Divisions.
The Council tested four different costing methods and recommended one the SC
accepted for implementation in all divisions. In summary, The financial department and
production planning people strongly supported it. Costing for Pricing changed the entire
approach to products, manufacturing, and pricing. It showed what the Parallel could do.
Future Business Planning

Future Business Planning was an ambitious Parallel project for Simcor, a manufacturing firm largely dependent on its parent company for product demand information and
forecasts.
The council noted,
We started with little knowledge of forecasting and strategic planning and spent a lot of time
investigating the subjects. We distilled our task into a few basic questions: (1) How can we
get a clear, relevant picture of the next ten to twenty years? (2) How will changes impact
Simcors strategic position, technology, and products?
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Table 4. Simcor Parallel Policies Implemented.

Administrative-Financial
AF-1
AF-2
AF-3
AF-4
AF-5
Facilities-Equipment
FE-1
FE-2
FE-3
FE-4
FE-5
FE-6
FE-7
FE-8
FE-9
FE-10
Strategy-Markets
SM-1
SM-2
SM-3
SM-4
SM-5
Personnel
PL-1
PL-2
PL-3
PL-4
PL-5
PL-6
PL-7
PL-8
PL-9
PL-10
PL-11
PL-12
PL-13
PL-14
Products-Production
PP-1
PP-2
PP-3
PP-4
PP-5
PP-6
PP-7
Cost Determination for Pricing

Report Control
Improved Security Techniques
Cost Control Strategy
Productive Materials Management
EPA/OSHA Regulations Compliance
Energy Management
Policy for Determining Plant Capacity
Solid Waste Disposal
Maintenance Control
Production Capacity Expansion
Simcor Facilities Operating Strategy
Facilities for the Future
Competitive Manufacturing Tooling Strategy
Operating Supplies and Tools Management
Product Divestment Policy and Procedures
Six-Year Integrated Business Plan
Competitive Position
Future Business Planning
Simcor Manufacturing in the World Market
Internal Communications in Simcor
Local Contract Negotiations Policy
Fringe Benefit Control
Influence of Government
Workforce Motivation
Management-Union Relations
Political Information Program
Salaried Workforce Development
The First Line Manager
Skilled Employee Management and Motivation
Education and Training
Strategic Employment for the Future
Strategy for Absenteeism
Productivity
Coordinated Product Planning
Heat Resistant Alloy
Commodity Availability
Technological Forecast
Strategy for Quality
Strategy for Standardization
New Products and Processes
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Council members read books and journals and consulted experts. They examined
econometric models and consulted econometric modeling and scenario planning organizations. They reviewed strategic planning at the parent company and its subsidiaries
and investigated sophisticated planning processes at other firms.
The Council concluded,
First, no single model or source could provide all the information needed for effective future
planning. Second, external, uncontrollable factors will greatly affect Simcor. Third, there
should be continual monitoring and evaluation of events to provide early warning of critical
future conditions, even though a reliable, accurate long-term forecast was not feasible.
The Council recommended that the CEO and executive staff closely monitor the
parent companys strategic plans and establish a strategy mechanism in Simcor. A new
Support Council (Z-3) was formed to monitor strategic planning processes and develop
an integrated business outlook for Simcor. It became a key contributor to Simcors
strategic planning. The Councils study of positioning Simcor in the global market, for
example, determined there was high excess capacity world-wide. It presciently advised
that expansion would face strong rivalry and, if done, should be by acquiring costefficient facilities rather than building new plants that would add excess industry
capacity and pressure price declines.
Other Sample Policies

Originally, each Simcor division had its own product abandonment policies that led to
cross-division product-line conflicts and customer relations difficulties. The PO developed Simcor-wide criteria for product abandonment and installed a central product
abandonment committee to review and approve all abandonment decisions. Productline coverage, manufacturing, and customer relations benefitted as a result.
The PO reviewed division fringe benefit programs and practices such as pensions,
medical benefits, sickness insurance, vacations, and so on. It found inconsistent policies across Simcor, an absence of policies in several divisions, and practices that
increased fringe benefit costs unnecessarily. The PO standardized policies in all benefit categories resulting in substantial savings across all of Simcor.
Simcor manufacturing was subject to substantial, ongoing environmental and
safety regulation. Originally, each division pursued its own practices of anticipating
and responding to such regulations. The POs policy led to formation of a centralized
governmental relations unit. The unit worked with federal and state legislators and
regulators to anticipate and shape regulations, and facilitate timely, uniform division
responses to regulatory issues.
Transition From Parallel to Staff Teams

In response to declining world demand, the parent firm directed Simcor to absorb three
other subsidiaries in the ninth year of the Parallel. Then Wilson retired after 10 years
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as CEO and John Randle, a CEO from a different business subsidiary of the parent,
was appointed CEO.
Randle queried division and headquarters staff top managers at a general meeting
about how to improve Simcor. They advised that the critical task was to absorb the
three, unfamiliar, low-performing business units while adjusting to declining volume
and recession. In their view, the Parallel had been successful and there were no major
issues that could not be handled in the line organization. The Parallel could be suspended and restarted if needed.
Randle suspended the Parallel and formed a Product Team task force, composed
largely of headquarters staff, to study Simcors products and organization. Based on
Product Team recommendations, Randle approved reorganizing Simcor into productcentered, strategic business units (SBUs). One staff team facilitated the transition by
orienting personnel to the SBUs and a second team communicated the changes to the
entire organization. Managers were ready for the change because an earlier PO proposal had recommended a shift to SBUs, which the Steering Council had not accepted
at that time.
After observing the staff teams and divisions work together to design and transition
to SBUs, Randle paid tribute to the learning and transformative effects he inherited
from the PO. He was impressed by managements analytic and presentation skills and
how well people collaborated across Divisions and functions.
Research Method
Method
This research used descriptive, narrative, qualitative methodology based on richly
detailed document and interview sources (Gephart, 2004; Kennedy, 1979; OConnor,
1999).
The research examined an extensive set of documents covering the entire 10-year
period of the Simcor PO. Documents included: (a) Simcors PO manual detailing the
PO structure, procedures, process, relationships among components, membership
composition of components, frequency of meetings, and relation to the line organization; (b) organization charts of Simcor divisions; (c) all final strategic policies with
complete Council reports containing all supporting data and analysis; (d) all of several
hundred project and strategic issue proposals submitted to the PO, identifying origin
and disposition; (e) minutes of all meetings of all elements of the PO.
To obtain information about the actual operation, process, benefits, and limitations
of the PO, 59 in-depth, semistructured, recorded, transcribed interviews were conducted. Fifty-six interviews covered a cross-section sample of the 360 PO participants
(15% of total), including all levels of management, all functions, all divisions, headquarters, and an administrative employee. In addition, three parent company OD staff
were interviewed. A sample of representative interview questions appears in Table 5.
All interviewees reviewed their transcript, and only two made minor revisions.
Transcripts were content analyzed for key phrases relevant to facets of PO theory and
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Table 5. Sample Interview Questions.
1.Describe your role in Simcors operating organization (OO). Describe your role in the parallel organization (PO).
What changes, if any, occurred in your role during the life of the PO?
2.Describe Simcors competition, strategy, performance, relation to its parent firm, culture before the PO. Describe
these elements after the PO?
3.Describe the process, methods, culture, relationships in the PO. Describe how that was similar to, or different
from, the line OO.
4.Describe the accomplishments of the PO. What criteria would you use to evaluate those accomplishments? Which
accomplishments would you rank highest? Which lowest? Explain.
5.Describe the POs benefits. Describe the POs limitations and difficulties. What, if anything, about the PO would
you change? Explain.
6. What do you think would not have been accomplished without the PO?
practice. Quotations, assertions, perceptions, and conclusions in the case are based on
triangulation (Jick, 1979), that is, confirming agreement among multiple interviewees
consistent with documentary evidence.
Simcors culture and operations were also observed by visits to all divisions and
company headquarters observing top management and staff interaction. Neither author
participated in the design or implementation of any aspect of Simcors PO.
We continually coded and analyzed the collected data using a grounded theory
process (Glaser, 1978; Glaser & Strauss, 1967), to inductively generate concepts and
themes and triangulate across the data sources until we achieved saturation of each
theme. This constant comparative analysis confirmed the eight original theoretical
dimensions proposed in Zand (1974) and the eight emergent dimensions discussed
later in this article.
Limitations
This is a qualitative, descriptive, interpretive, and inductive research influenced by the
experience and interpretive lenses of the researchers. Generalization from this single
case study to other situations should be done cautiously. Kennedy (1979) addresses the
issue of generalizing from a single case study by suggesting that rich case description
allows readers to judge whether the context, circumstances, and details of the research
case are sufficiently similar to the readers situations to warrant generalization to the
their situations. This article captures some, but not all, of the deep, rich description
collected in this research.
The research was done after the phenomenon occurred and respondents may have
limited, biased recollections or rationalized reasons for their views and actions. Some
interviewees may have shaped responses to fit what they believed the interviewer
wanted to hear. We tried to minimize these limitations by triangulation (Jick, 1979)
with other interviews, documents, and observations.
From managements performance claims, the duration of the Parallel, and Simcors
continued dominant position in its industry, we infer that management was satisfied
with Parallel financial and operating contributions, although Simcor top management
would not release detailed financial information for the SPO period.
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Discussion
Benefits of the Parallel Organization
The PO was a major systemic change in Simcor. It introduced a lateral structure and
process for investigating important issues and operated in tandem with the formal
organization. Participants believed that Simcors deeply rooted, authoritarian, manufacturing culture and bureaucratic, line organization would not have uncovered the
range of issues or investigated them as thoroughly as the Parallel did.
As one representative participant said,
The Parallel broke down organizational barriers. Before the Parallel, people didnt know
each other. For a majority of us the discussions and working with people from all Divisions,
functions and headquarters led to a flow of information that changed the company.
The Parallel introduced important policy changes (Table 4) across operations, facilities, finances, personnel, markets, and strategy. Divisions benefited greatly from uniform policies where appropriate and none existed.
The Parallel helped managers see Simcors strategic position in its external environment. Managers developed a comprehensive perspective by visiting other subsidiaries, the parent firm, and other corporations. A participant said, The SPO let me see
the big picture. I could understand and take part in many areas of the business that
previously I would not know.
The Parallel developed participants skills in collaborating to solve problems across
functions and divisions. Participants called on their Parallel connections to consult
people in other functions and divisions in the line organization. A participant noted
that the SPO exposed people to different disciplines and views of problems. They took
that collaborative view into the line organization.
Participants praised the Parallel for improving their investigative, analytic, and presentation skills. They felt more confident discussing decisions in the line organization.
Participants said that the Parallel exposed them to consensus decision-making where
they had to listen to and discuss different views with people from different functions.
They carried that consensus experience into problem solving in the line organization
as well.
Intrusions and Difficulties

External events twice interfered with Parallel operations. The parent firm transferred
unprofitable manufacturing divisions to Simcor during the Parallels third year and
ninth year, expecting Simcor to absorb them despite declining volume and economic
recession at those times. During the first transfer, Simcor was implementing 21 new
Parallel policies. Participants recalled the difficulty of absorbing two failing divisions
during recession while implementing new Parallel policies. Then during the ninth
year, absorbing three more failed, transferred divisions led to the use of staff teams
rather than the Parallel.
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Occasional participant disagreement with Simcors core strategy was another difficulty that reduced commitment to the Parallel. For example, some middle- and
lower-level managers, with a limited view of the organization, had difficulty accepting the premise that Simcor is, and would continue to be, a high-volume, low-cost
manufacturer using evolving technology to produce a limited line of products sold
primarily to its parent firm. Parallel proposals that fit that view will be studied,
departures will not.
The dichotomy of strategic and tactical was also a source of difficulty. Although
Simcors Parallel Manual and process authorized the Strategy Council to reject any
insufficiently strategic proposal, some middle and lower managers were disappointed
when their projects were judged tactical and rejected or turned back to be resolved in
the division, particularly without follow-up to confirm the issue had been addressed in
the division.
The apparent priority given to top-management interests reduced lower-management commitment to the Parallel. Top managers dominated as the source of project
proposals selected for development into policies (see Table 3). Their higher level in
Simcor, we believe, gave them a clearer perspective of what was and was not strategic.
In addition to feeling left out as a source of proposals, some lower managers who
implemented new policies expressed skepticism when they saw deficiencies in policies, despite the Parallels best efforts. Some became particularly cynical after discovering poor implementation of human resource policies at their level.
Implications for Theory

We now introduce a matrix (Table 6) that compares Simcor with the eight published
PO cases we earlier considered to be both empirically and conceptually comprehensive (Bushe & Shani, 1991; Kanter, 1983; Zand, 1974, 1981). We use the matrix to
discuss how Simcor adds new insight to PO research and theory. We note that the
published PO literature addresses and is in general agreement with Zands (1974) eight
conceptual dimensions of a PO (Table 1). Therefore, we will examine other dimensions often minimally discussed or omitted in empirical PO cases (Table 6).
Purpose and Duration of the PO

We observed little discussion of the theory underlying duration of the PO in the case
studies reported in the empirical parallel learning structure literature. Theoretically, as
originally conceived by Zand (1974), a PO is a temporary supplement, not a permanent fixture, attached to an organization. Bushe and Shani (1990) later develop a threepart typology that recognizes temporary, semipermanent, and permanent parallel
learning organizations. The question arises of how long should a PO exist? If the
purpose of a PO is to augment the problem-solving ability of the OO, then theoretically, a Parallel should end when there are no more issues to find and solve that are
outside the line organizations problem-solving capacity.
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Table 6. Comparison of Simcor to Previous Research.

Dimensions
Simcor case
Purpose of the PO: Define and

solve strategic problems
Duration of the PO
Developed strategic policies

Continued for 10 years; shifted to
staff groups by new CEO
A SUN and 10 basic inquiry units,
each with a tiered set of subunits
Large: 360 members in Simcor PO
Structural configuration of the PO

Size of the PO in members
Character of the support from top
executive
Nature of the involvement of the
OD consultant(s)
Extent of training, if any, of PO
members for tasks in PO
Process of selecting members for
the PO
Process for evaluating the PO
performance of PO members
Output of the PO and the degree
of persistence of the changes
Key and sustained involvement in the

design of PO, chairing of SUN, and
monitoring Councils
Involved only with CEO in PO
design, initial off-site, and shadow
consultant after
Self-directed learning of all processes
and investigative skills by doing the
work of the PO
Recommendation by supervising
manager and final selection by
CEO for all but A-level managers
There was formal evaluation of each
PO member done by the Chair of
the PO members PO unit
Changes in company-wide strategic
policies, improved investigative
skills, greater collaboration across
divisions and functions
Previous empirical research (Zand, 1974;

Kanter, 1983; Bushe & Shani, 1991)
Strategic problem defining and solving in
all eight cases
Continuing at time of publication but
generally less than 3 years
A SUN with one or several basic inquiry
units. No subunits for all eight cases.
Small: less than 50 members in seven
cases
Key involvement in SUN in four cases;
little involvement in four others
Intensive, continuous involvement in
diagnosis, PO design and operation,
and some training
Consultants provided training in PO
process and investigative/analytical
skills
No information offered
No information offered
Changes in unitwide structure. Improved

process for handling strategic problems
in all eight cases
Note. PO = parallel organization; OD = organizational development; SUN, steering unit.
In Simcor, CEO Wilsons original purpose was to develop and implement beneficial policies and have managers work collaboratively across divisions and functions
by supplementing an authoritarian, silo organization with a temporary PO. In practical
terms, many managers felt that Simcors PO had accomplished most of its work by the
end of the third year and should have been temporarily dialed back or suspended while
Simcor implemented its new policies and digested two parent-imposed, failing divisions, particularly at a time of temporary recession. By that time, however, Wilson saw
the Parallel in a new light. He saw it as a semipermanent or permanent learning mechanism for communication, personnel development, and organizational integration.
Also, he did not want to end it as it had become his window into the organization and
his signature stamp on the company. It had become part of his management style and
process and projected his presence deep into the organization.
Thus, the initial motivation and purpose of the SPO fits the strategic, ill-defined
problem defining and solving category of the Bushe and Shani (1990) framework.
However, by the third year of its operation, when it would have been reasonable to
scale back the SPO, Wilsons perception moved the SPO into Bushe and Shanis
(1990) second and third categories of building adaptability into a bureaucratic organization and modifying its culture.
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Participants, however, continued to see the PO as a problem-solving aid rather than

a management development, adaptability, and cultural shift process. The key executive and his OD advisor had not made explicit or engaged PO participants in understanding this fundamental shift in purpose.
The implication of Simcor for OD practice is to be wary of extending the life of a
Parallel after it has done its problem-solving work. If the sponsor prolongs it as a pseudo
problem-solving entity, participants may lose interest and see the Parallel as a misguided burden rather than a help to the line organization. If PO continuation is intended
as a training, communication, adaptability, and cultural shift device, then the PO needs
to be evaluated against other methods that may be more effective and efficient.
The implication for PO theory is that duration is a function of organizational context, perceived challenges, management, and participants experience with the PO
across the time frame of the PO, and the top managers preference. The empirical literature on the PO shows differing contexts (e.g., differing industries, differing competitive environments, nonprofit, or governmental organization) differing perceived
challenges (e.g., internal dysfunctions or competitor challenges), differing organizational units involved (e.g., a plant, a division, a company), differing motives (e.g., new
services and products, improve labormanagement cooperation), and differing
involvement by the top executive (e.g., arms length, strong support but not actively
involved, actively involved). In the case of Simcor, it also shows that both unexpected
external events as well as changes in the CEOs purpose for using a PO can affect the
duration of the PO.
Structural Configuration and Intensity of CEO Participation

Simcor extends our understanding of parallel theory by showing how extensive, highly
articulated and deep a PO structure can be. Simcors PO had a SUN as did each of the
eight PO cases reported in Zand (1974), Kanter (1983), and Bushe and Shani (1991).
Simcor and each of the eight cases also had at least one BIN. Simcor, however, had 10
BINs functioning at the same time, more than any of the eight cases in which the highest reported number of BINs was 3. Furthermore, each Simcor BIN had a two-level
support substructurethat is, Support Councils and Support Teams. None of the BINs
reported in the eight cases had any substructure.
Simcor highlights the CEO role as another critical structural aspect of PO theory.
At Simcor the CEO was an integral part of the entire PO from its design, initiation, and
operation for its 10 years life. It could be said that CEO Wilson was the central figure
committed to and driving the Simcor PO. The CEO risked that if the PO foundered or
failed in any aspect, because of the POs extensiveness and depth, Simcors performance could have declined, Division Managers could have covertly rebelled, they
could have subverted efforts to integrate the divisions, and they could have undermined the CEO by indirectly communicating their displeasure with the PO to the parent firm. In contrast, in a majority of the other eight reported cases the top executive
was missing from the guiding SUN, and instead of direct participation, played the
more limited, less risky role of supporting and endorsing the activities of the PO.
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Size of the Parallel Organization in Members

In all but one of the eight cases in Zand (1974), Kanter (1983), and Bushe and Shani
(1991), the total number of people involved in the PO was less than 50. This, of course,
reflects the varying sizes of the organizations. All eight organizations had fewer
employees than Simcor.
Simcor had 7,500 hourly employees and 1,150 managerial employees, of which
approximately 360 managers were involved in the SPO. Simcors size, both in employees and in dollar sales, demonstrates that a PO can be scaled up for organizations
larger than those reflected in the existing empirical literature. The implication is that
parallel theory can apply to organizations larger than reported in the reviewed PO
literature.
Character of the Support of the Top Executive as Key Sponsor

A parallel mode can be installed at any level of an organization, but wherever installed,
the parallel must have the support of the key manager who guides subject matter, staffing, and implementation. In Simcor the CEOs commitment was key to the parallels
success and duration.
Essential to a parallel sponsors role is ensuring that parallel outputs mesh with the
organizations overall strategy. Simcors managers agreed that Wilson was a strong,
respected leader who knew Simcor better than anyone else. No one questioned his
integrity or motivation to do what was best for Simcor and the parent company. As a
strong leader, to ensure the Parallel did not go astray, he and his OD adviser believed
that he should engage in continual mid-course corrections.
For PO theory, the implication is as follows: The key sponsor needs to continually
monitor and maintain the delicate balance of ensuring that the formal organization
accepts the parallel process and outputs without imposing excessive control that makes
the parallel a puppet of the sponsor. An OD practitioner may view a Parallel as participative action research, but to a traditional manager the challenge is how do you manage a controlled revolution without undermining the OO. A common problem for
sponsors trying to blend the PO with the OO is that some participants may see the
sponsors role in the PO as too controlling. On the other hand, too little attention and
support by the key sponsor is likely to result in an ineffective PO. Also, practitioners
need to be aware of and deal with the sponsors concern that the PO may attempt to
change the configuration and operating processes of the existing OO in ways she or he
does not approve.
Involvement of Organizational Development Consultant(s) Versus SelfDirection

In the Simcor case, the OD consultant played a limited but pivotal role. Using Zand
(1974) as a template, he helped design the SPO with the CEO-designate and participated as an observer in the initial start-up off-site. Thereafter, he had a minimal role in
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the ongoing activity of the SPO and its modifications. He occasionally exchanged
ideas and perspectives with Wilson off-site, but he was not present or involved in the
POs diagnostic or problem search and solving activities, the training of PO members,
or modifications to the PO structure.
In contrast, the eight usable parallel cases showed extensive, continuing involvement of the OD consultant(s) in the design, implementation, and actual operation of
the POs. Their involvement included assisting in the diagnostic process, providing
feedback, designing and guiding procedures for operating the PO, and facilitating process training.
The Simcor PO was essentially a participant, self-directed operation. The idea that
a PO could be effective and self sustaining with only initial design input by the OD
consultant, stands in sharp contrast to the extensive and deep OD consultant involvement in the cases reported in the literature.
Extent of Training of the Parallel Organization Members

Training PO members for work in the PO is another issue of contrasts. In the Simcor
PO, there was no formal training for the inquiry and process tasks in the Councils and
the support groups. All learning was by doing on-the-job within each Council, Support
Council, and Support Team. Each council assessed its own learning needs and devised
methods to meet those needs.
There was also much informal learning/training transfer between groups at Strategy
Council meetings. Council chairs observed and learned content, quality, and presentation skills from each other as each Council Chair made his report to the SC and was
questioned by the SC members. Even within a Councils own support structure, the
Support Council and Support Team Chair observers to the next level up allowed for
both observational dissemination of investigative learning processes as well as the
opportunity to ask questions about alternative processes for investigation.
In the eight usable empirical parallel cases, there is little in the way of information on
the training of the parallel members for their parallel responsibilities. In the infrequent
instances where training is discussed, it was done by the OD consultants and generally
focused on meeting process and facilitation skills and not on investigative skills.
There are significant implications for PO theory and practice here. The Simcor PO
indicates that after an initial high level of involvement in the design stage, the OD
specialist can play a consultative role with the key executive and no role in the processes used by the steering unit and the basic inquiry units.
Process of Selecting Parallel Organization Members

There is limited information on the selection of PO members in the eight cases presented in Zand (1974), Kanter (1983), and Bushe and Shani (1991). At Simcor, however, the process was very clear. All A-level managers at the top of Simcor were always
involved in the SPO. For the B-, C-, and D-level managers, however, selection was
based on (a) recommendation by the individuals supervising manager and (b) review
330
by the CEO/SPO chair of the recommendation file, including semiannual evaluations

of performance in both the OO and the SPO. Furthermore, continued selection to
remain in the SPO as well as selection for promotion in the SPO was contingent on
performing well in the SPO and in the OO. It was not uncommon for an individual
who did not perform well in the SPO to be dropped from the SPO when there was a
hiatus in SPO activities.
Process of Evaluation of Parallel Organization Member Performance

Within the SPO, there was annual evaluation of the performance of each member that
became part of the individuals overall evaluation. Wilson evaluated all members of
the SC as well as the Council Chairs. Council Chairs evaluated Council members and
the Support Council Chairs, Support Council Chairs evaluated Support Council members and Support Team Chairs, and so forth. A good SPO evaluation meant continuation as a member of the SPO, and, for some, eventual promotion to a higher managerial
level at Simcor and in the SPO. A poor SPO evaluation inevitably led to no future
assignments in the SPO. Keep in mind, however, that Wilson intended the SPO to be
a place where, at least at the C and D levels of management, those with the brightest
potential were the ones invited to be on the SPO.
Within the empirical research on cases of parallel organization, information on and
discussion of evaluations of performance of the members is extremely limited.
Output of the Parallel Organization and Change Persistence

Common to Simcor and the eight cases was the improvement in the capabilities of
identifying, defining, and solving strategic problems well. At the core of this improvement was the enhancement of questioning, investigative, and collaboration competencies of the members of the PO. Similarly, Simcor and the eight cases demonstrated at
least some changes in the structural configuration of the organization.
On the other hand, Simcors PO is noteworthy for its initiation of fundamental,
company-wide, strategic policies of far greater scope and numbers than in other
reported cases. The Simcor PO is also noteworthy for the transference of investigative,
presentational, and collaborative competencies to the OO, both during and after the
SPO experience.
Divergent Thinking and Learning

A PO contributes to problem solving by enabling thinking that diverges from formal
organization views. There is tension, however, between the parallels divergent thinking and how much divergence the formal organization is willing to accept and implement. Simcors CEO continually explained his preferences to his staff, the SC, and
each Council. When his position was unclear, managers tried to ferret out his views on
specific issues. A number of managers believed that he should have allowed more
divergent thinking to emerge, including Council development of proposed issues that
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focused on alternative configuration arrangements of the OO and consideration of

additional markets and products. As CEO, however, Wilson believed that Simcor
could not diverge from its role as a captive, major supplier to its parent firm nor from
its functional and highly hierarchical organizational configuration, both of which were
at the center of the way the A-level managers defined the firm.
The implication for OD practice is that the sponsor and SUN must continually
clarify and communicate from the outset the evolving subject boundaries of the PO.
On the other hand, the PO must attend to internal and external contextual signals that
indicate a need for changes in subject matter boundaries and life of the PO.
Enlarging Scope of the Parallel

One type of PO enlargement relies on managers to transfer the Parallel concept and consensus mode to miniparallel networks in their segment of the line organization. Simcors
PO enhanced communication at upper levels across Simcor divisions and functions
without changing the line structure of the OO. The question for OD specialists is as follows: Should there be a systematic effort to move the parallel, inquiry-consensus mode
down to lower levels of a high-volume, standardized-procedure, limited product line
operation to deal with short-term issues? If so, how should this be done?
Implications for Practice

Practice here is described as use by consultants and/or managers of a PO as a strategic
intervention for systemic, strategic, or transformational change (Beer & Eisenstat,
2004; Fredberg et al., 2011) as well as a change in culture (Schein, 2009). What has the
Simcor case offered to further inform practice in the OD field?
Zands (1974) eight original dimensions were clearly present at Simcor and
remained significant and relevant throughout its life. OD consultants and managers should continue to realize the importance of those dimensions in POs.
At the outset, practitioners should help develop a clear understanding of the
intended use and duration of the PO; however, managers, OD consultants, and
participants should be open to and clearly enunciate changes in the purpose and
duration as the process unfolds and contextual issues emerge. Practitioners
need to assist the CEO in his or her critical role in changing the purpose or
extending the life of the PO. Practitioners need to help the CEO and participants
adjust to contextual issues such as recessions, acquisitions, and competitive
threats that may interfere with or temper enthusiasm for the PO.
Practitioners should understand that the structural configuration of a PO may
vary across a wider range than previously reported. At Simcor, there were a
significant number of BINS operating simultaneously, unlike the previously
reported empirical research. Furthermore, unlike earlier reported examples of
POs, at Simcor each BIN had multiple formal levels that extended into the
lower managerial levels.
332
Simcor also provides an example of the use of a PO on a larger scale than

reported in previous empirical literature. The implication here is that a parallel
structure and process may be appropriate for a wide range of organizations.
Practitioners should have well-developed skills for working with a highly
involved CEO, such as the one at Simcor, in the design, start-up, and ongoing
operation of the PO. Such skills may have been less significant with low to
moderately involved CEOs reported in other empirical studies.
At Simcor, the OD consultant, although totally involved in the initial design and
start-up of the PO, was essentially uninvolved, except as a private sounding
board for the CEO, throughout the life of the PO. For practitioners, this suggests that facilitative and investigative training by OD consultants may not be
required for the successful use of a parallel process.
Essentially all of the facilitative and investigative learning in the Councils of
the Simcor PO came about as a result of self-directed, trial and adjustment, and
observation of other groups. In contrast to the extensive involvement of OD
consultants in training PO members, practitioners should, at the outset, devote
greater effort to supporting and enabling self-directed learning in a PO.
What should be the practitioners role in selection and evaluation of PO members? Members are critical to PO success, yet there is scant information in the
parallel structure literature reviewed earlier in this article. At Simcor, in addition to functional specialty, expertise, and representation ability, performance in
the OO was a basis for selection into the PO for those at the B, C, and D levels
of management. Performance in both the OO and the PO was the basis for continuing as a member of the PO below the A level, with final approval by the
CEO. These elements played an important role in the success of Simcors PO.
Practitioners should help the CEO and organization understand that a parallel
structure will have both intended and emergent outputs. The specific content
will be dependent on contexthistorical, internal, external, and temporal. At
Simcor, the CEOs intended output focused broadly on cross-functional and
cross-division communication as well as integrative strategic policies across
the firm. Some of the most notable outputs, however, emerged as enhanced
investigative, presentational, and collaborative skills that Council members carried into the OO.
The Simcor case reinforces existing empirical research on parallel structures and
process for use by managers and OD consultants. It also adds new insight into the role
of consultants, the design and duration of PO, its contribution to learning, and its use
as a change mechanism.
Conclusion
The Simcor case confirms that, despite the challenge of context, size, and dependence on
a parent firm, management can use a PO to operate bimodally, that is, in two different
modes, at the same time. Furthermore, the policy outputs of Simcors Parallel support
333
Hawk and Zand
the proposition that a PO intervention can diagnose a wide range of ill-structured situations and solve significant problems not identified or solved in the formal organization.
The parallel, inquiry mode works on ill-defined, complex tasks to supplement the line,
production mode which works on routine, well-defined tasks. The norms of the parallel
inquiry mode promote open, well-reasoned, consensus problem solving in contrast to the
constraining, authoritarian, directive norms of the compliance, production mode.
The Simcor case reminds us that a Parallel is a demanding intervention with serious
potential limitations and conflicts, which is a good reason for OD specialists to appreciate and support a Parallels courageous sponsors and participants. As CEO, Wilson
could have led Simcor without a PO. He had the knowledge, intelligence, and drive to
manage autocratically, like his predecessors. However, he recognized a need to deal
with ill-structured issues in a complex environment and opted for collaborative inquiry
across Simcors divisions and functions. He risked engaging in a high-involvement,
participative inquiry process that generated transformative change over an extended
period of time.
Declaration of Conflicting Interests
The authors declared no potential conflicts of interest with respect to the research, authorship,
and/or publication of this article.
Funding
The authors received no financial support for the research, authorship, and/or publication of this
article.
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Parallel Organization: Policy Formulation, Learning, and Interdivision

>> Version of Record - Aug 13, 2014

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JAB50310.1177/0021886313509276The Journal of Applied Behavioral ScienceHawk and Zand

Parallel Organization: Policy

The Journal of Applied Behavioral Science

Thomas F. Hawk1 and Dale E. Zand2

State University, Frostburg, MD, USA

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Modified to fit an organizations specific issues, internal conditions, and external

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Hawk and Zand

In addition, top management conventionally considers policy issues its domain.

Parallel Organization Design Principles

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The Journal of Applied Behavioral Science 50(3)

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Hawk and Zand

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The Journal of Applied Behavioral Science 50(3)

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CEOs Issues Motivating Parallel Organization

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Simcors Parallel Organization

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Figure 1. Parallel organization structure.

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requirement of consensus impelled participants to draw on each others investigative

Wide Scope of Participation

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There was, however, no follow-up by Councils I and Z on issues designated Return to

a.Cancelled (tactical, duplicate) or returned to line.

One explanation for the predominance of Level-A proposals in completed policies

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Wide Range of Completed Policies

Costing for Pricing

Future Business Planning

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Table 4. Simcor Parallel Policies Implemented.

Cost Determination for Pricing

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Other Sample Policies

Transition From Parallel to Staff Teams

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Hawk and Zand

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Intrusions and Difficulties

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