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Thomas G. Cummings & Christopher G. Worley

Organization development and Change
10th edition, 2015

Summary chapters 1 – 23
Tilburg University School of Social and Behavioral Sciences
Master Human Resource Studies

Course: Organizational Change – 2017

Table of contents
Chapter 1: General introduction to Organization Development 4
Summary chapter 1: 7
Chapter 2: The Nature of Planned Change 8
Chapter 3: The organization development practitioner 19
Chapter 4: Entering and contracting 23
Chapter 5: Diagnosing 27
Chapter 6: Collecting, Analyzing, and Feeding Back Diagnostic information 42
Chapter 7: Designing interventions 50
Chapter 8: Managing change 64
Chapter 9: Evaluating and institutionalizing OD Interventions 73
Chapter 10: Interpersonal and group process approaches 85
Chapter 11: Organization process approaches 91
Chapter 12: Restructuring Organizations 103
Chapter 13: Employee involvement 121
Chapter 14: Work design 134
Chapter 15: Performance management 149
Chapter 16: Talent management 164
Chapter 17: Workforce diversity and wellness 171

Summary Chapter 17 182

Chapter 18: Transformational change 183
Chapter 19: Continuous change 203
Chapter 20 – Transorganizational Change 215
Chapter 21: Organization Development for Economic, Ecological, and Social Outcomes 223
Chapter 22: Organization development in nonindustrial settings: health care, school
systems, the public sector, and family-owned 231
Chapter 23: Future directions in organization development 247
Guest lecture 1: Wim van Ernich - Thermiek 253
Guest lecture 2: Diederik Kolb - Achmea 255
Guest lecture 3: Marc Burger - Capgemini 258
Guest lecture 4: Corline van Reenen - Schouten Global 261
Guest lecture 5: Nick van Dam – McKinsey & Company 269
Guest lecture 6: Woody van Olffen – TIAS 272
* Chapter 21: Organization Development for Economic, Ecological, and Social Outcomes
* Chapter 22: Organization Development in Nonindustrial Settings: Health Care, School

Systems, the Public Sector, and Family-Owned Businesses
* Chapter 23: Future Directions in Organization Development
* niet in syllabus en HC

Chapter 1: General introduction to Organization

Development
Learning objectives:
- Define and describe the practice and study of organization development (OD)
- Describe the history and relevance of OD
- Distinguish OD and planned change from other forms of organization change
Organization development differs from other planned change efforts, such as project
management or innovation, because the focus is on building the organization’s ability
to assess its current functioning and to achieve its goals.
OD is oriented to improving the total system—the organization and its parts in the
context of the larger environment that affects them.
Examples of OD:
- Team building with top corporate management
- structural change in a municipality
- job enrichment in a manufacturing firm
Worley and Feyerherm suggested that for a process to be called organization

development, (1) it must focus on or result in the change of some aspect of the
organizational system; (2) there must be learning or the transfer of knowledge or skill
to the client system; and (3) there must be evidence of improvement in or an intention
to improve the effectiveness of the client system.
The following definition incorporates most of these views and is used in this book:
Organization development is a system-wide application and transfer of behavioral
science knowledge to the planned development, improvement, and reinforcement of
the strategies, structures, and processes that lead to organization effectiveness.
Important: OD is different from other approaches to organizational change and

improvement, such as management consulting, innovation, project management, and
operations management etc.
Difference between OD and Change Management

Organization development can be distinguished from change management and
organizational change. OD and change management both address the effective
implementation of planned change. They are both concerned with the sequence of
activities, processes, and leadership issues that produce organization improvements.
They differ, however, in their underlying value orientation. OD’s behavioral science
foundation supports values of human potential, participation, and development in
addition to performance and competitive advantage. Change management focuses

more narrowly on values of cost, quality, and schedule. As a result, OD’s distinguishing
feature is its concern with the transfer of knowledge and skill so that the system is
more able to manage change in the future. Change management does not necessarily
require the transfer of these skills. In short, all OD involves change management, but
change management may not involve OD.
Difference between OD and Organizational Change

OD is primarily concerned with managing change in such a way that knowledge and
skills are transferred to build the organization’s capability to achieve goals and solve
problems. It is intended to change the organization in a particular direction, toward
improved problem solving, responsiveness, quality of work life, and effectiveness.
Organizational change, in contrast, is more broadly focused and can apply to any kind
of change, including technical and managerial innovations, organization decline, or the
evolution of a system over time. These changes may or may not be directed at making
the organization more developed in the sense implied by OD.
Three major trends are shaping change in organizations: globalization, information

technology, and managerial innovation.
 Globalization is changing the markets and environments in which organizations
operate as well as the way they function. New governments, new leadership,
new markets, and new countries are emerging and creating a new global
economy with both opportunities and threats.
 Information technology is redefining the traditional business model by changing
how work is performed, how knowledge is used, and how the cost of doing
business is calculated.
 Managerial innovation has responded to the globalization and information
technology trends and has accelerated their impact on organizations. New
organizational forms, such as networks, strategic alliances, and virtual
corporations, provide organizations with new ways of thinking about how to
manufacture goods and deliver services.
Organization development plays a key role in helping organizations change

themselves. It helps organizations assess themselves and their environments and
revitalize and rebuild their strategies, structures, and processes. OD helps
organization members go beyond surface changes to transform the underlying
assumptions and values governing their behaviors.
Practical relevance
 A career in OD can be highly rewarding, providing challenging and interesting
assignments working with managers and employees to improve their
organizations and their work lives. In today’s environment, the demand for OD
professionals is rising rapidly.
 All managers and administrators are responsible for supervising and
developing subordinates and for improving their department's’ performance.

Similarly, all staff specialists, such as financial analysts, engineers, information

technologists, or market researchers, are responsible for offering advice and
counsel to managers and for introducing new methods and practices.
 OD is important to general managers and other senior executives because OD
can help the whole organization be more flexible, adaptable, and effective.
 Organization development can also help managers and staff personnel perform
their tasks more effectively. It can provide the skills and knowledge necessary
for establishing effective interpersonal relationships. It can show personnel how
to work effectively with others in diagnosing complex problems and in devising
appropriate solutions. It can help others become committed to the solutions,
thereby increasing chances for their successful implementation.
To conclude: OD is highly relevant to anyone having to work with and through others
in organizations.
Current practice in organization development is strongly influenced by these five

backgrounds as well as by the trends shaping change in organizations.

Summary chapter 1:
This chapter introduced OD as a planned change discipline concerned with applying
behavioral science knowledge and practices to help organizations achieve greater
effectiveness. Managers and staff specialists must work with and through people to
achieve organizational objectives, and OD can help them form effective relationships
with others. Organizations are faced with rapidly accelerating change, and OD can
help them cope with the consequences of change. The concept of OD has multiple
meanings. The definition provided here resolved some of the problems with earlier
definitions. The history of OD reveals its five roots: laboratory training, action research
and survey feedback, normative approaches, productivity and quality of work life, and
strategic change. The current practice of OD goes far beyond its humanistic origins by
incorporating concepts from organization strategy and design that complement the
early emphasis on social processes. The continued growth in the number and diversity
of OD approaches, practitioners, and involved organizations attests to the health of
the discipline and offers a favorable prospect for the future.

Chapter 2: The Nature of Planned Change

- Describe and compare 3 major theories of planned change
- Introduce a general model of planned change that will be used to organize the
material presented in the book.
- Explain how planned change can be adopted to fit different contexts.
- Critique the practice of planned change
Change is often initiated and implemented by managers, often with the help from an
OD practitioner inside or outside of the organization. OD is directed at bringing about
planned change to increase an organization’s effectiveness and capability to change
itself. Organizations can use planned change to solve problems, to learn from
experience, to reframe shared perceptions, to adapt to external environmental
changes, to improve performance, and to influence future changes. All approaches to
OD rely on some theory.
Theories of planned change describe the activities necessary to modify strategies,

structures and processes to increase an organization’s effectiveness and initiate
successful organizational change. Lewin’s change model, the action research model
and the positive model offer different views of the phases through which planned
change occurs in organizations.
Lewin’s change model
A particular set of behaviors is the result of two groups of forces: those striving to
maintain the status quo and those pushing for change. When both sets of forces are
about equal, current behaviors are maintained in what Lewin termed a state of ‘quasi-
stationary equilibrium’.
To change that state, one can increase those forces pushing for change, decrease
those forces maintaining the current state (most effective change strategy according
to Lewin; less resistance), or apply a combination of both. Chang process has three
stages:

1. Unfreezing: Involves reducing those forces maintaining the organization’s

behavior at its present level. Process of psychological disconfirmation 
provide information that shows discrepancies between desired behaviors and
current behaviors, to motivate employees to follow change activities.
2. Moving: This step shifts the behavior of the organization, department or
individual to a new level. It involves intervening in the system to develop new
behaviors, values and attitudes through changes in organizational structures
and processes.
3. Refreezing: This step stabilizes the organization at a new state of equilibrium.
Frequently accomplished through the use of supporting mechanisms that
reinforce the new organizational state (e.g., organizational culture, rewards,
structures).
Variations on this model:

- Lippitt, Watson, and Westley arranges Lewin’s model into seven steps:
scouting, entry, diagnosis (unfreezing), planning, action (moving), stabilization
and evaluation, and termination (refreezing).
- Kotter’s eight stage process can be mapped onto Lewin’s phases: establishing
a sense of urgency, creating the guiding coalition, developing a vision and
strategy, and communicating the change vision (unfreezing); empowering
broad-based action, generating short-term wins (moving); and consolidating
gains and producing more change, and anchoring new approaches in the
culture (refreezing).
The action research model
Focuses on planned change as a cyclical process of research and action, involving

joint activities between organization members and ODPs.

Traditionally aimed at both helping specific organizations implement planned change

and at developing more general knowledge that can be applied to other settings. It
places heavy emphasis on data gathering and diagnosis prior to action planning and
implementation, as well as careful evaluation of results afterwards.
This model underlies most current approaches to planned change and is often
considered same as OD. The role of ODP’s is to work with members to facilitate the
learning process (gain competences needed to change and improve continually). It
involves multiple steps that overlap and interact in practice:
1. Problem identification: problems that might be solved with help of ODP.

2. Consultation behavioral science expert/OD practitioner with the client
3. Data gathering and preliminary diagnosis: to get appropriate information and
analyzing it to determine underlying causes of problems. Interviews, process
observation, questionnaires, and performance data. Usually completed by ODP
(their action=intervention).
4. Feedback to a key client or group: diagnostic data fed back to the client to
determine strengths and weaknesses of the organization based on the relevant
data.
5. Joint diagnosis of the problem: members discuss feedback and explore with
ODP whether they want to work on identified problems (collaborative process,
no doctor-patient model!). Exploration of the options.
6. Joint action planning: ODP and client members jointly agree on actions, this
is the beginning of the moving process (Lewin). Specific action depends on
culture, technology, environment of organization, diagnosis of problem, time
and expense of intervention.
7. Action: actual change from one state to another (desired) state; requiring a
transition period
8. Data gathering after action: evaluation, to measure and determine the effects
of the action and to feed results back (step 4) to org, which may lead to re-
diagnosis and new action (cyclical process).
The action research model places heavy emphasis on data gathering, and on
assessment of results after action is taken. In addition, change strategies often are
modified on the basis of continued diagnosis, and termination of one OD program may
lead to further work in other areas of the firm. In larger contexts (total systems and
communities), action research is more complex and political (diversity of
stakeholders).
OD practitioners work with members to facilitate the learning process; no party

dominates change process (ODP also does not, all learning from the change process).
Also, current applications of action research have increased the degree of member
involvement in the change process;
- increasingly applied in international settings/ fit cultural assumptions;
10

- increasingly applied to promote social change and innovation.

In today’s complex environment, some argue that OD must go beyond solving
particular problems to helping members gain the competence needed to change and
improve the organization continually.
11

The Positive Model
The positive model focuses on what the organization is doing right. Five phases:
1. Initiate the Inquiry. This first phase determines the subject of change. It
emphasizes member involvement to identify the organizational issue they have
the most energy to address. For example, members can choose to look for
successful male–female collaboration (as opposed to sexual discrimination),
instances of customer satisfaction (as opposed to customer dissatisfaction),
particularly effective work teams, or product development processes that
brought new ideas to market especially fast. If the focus of inquiry is real and
vital to organization members, the change process itself will take on these
positive attributes.
2. Inquire into Best Practices. This phase involves gathering information about
the “best of what is” in the organization. If the topic is organizational innovation,
then members help to develop an interview protocol that collects stories of new
ideas that were developed and implemented in the organization. The interviews
are conducted by organization members; they interview each other and tell
stories of innovation in which they have personally been involved. These stories
are pulled together to create a pool of information describing the organization
as an innovative system.
3. Discover the Themes. In this third phase, members examine the stories, both
large and small, to identify a set of themes representing the common
dimensions of people’s experiences. For example, the stories of innovation may
contain themes about how managers gave people the freedom to explore a new
idea, the support organization members received from their coworkers, or how
the exposure to customers sparked creative thinking. No theme is too small to
be represented; it is important that all of the underlying mechanisms that helped
to generate and support the themes be described. The themes represent the
basis for moving from “what is” to “what could be.”
4. Envision a Preferred Future. Members then examine the identified themes,
challenge the status quo, and describe a compelling future. Based on the
12

organization’s successful past, members collectively visualize the

organization’s future and develop “possibility propositions”—statements that
bridge the organization’s current best practices with ideal possibilities for future
organizing. These propositions should present a truly exciting, provocative, and
possible picture of the future. Based on these possibilities, members identify
the relevant stakeholders and critical organization processes that must be
aligned to support the emergence of the envisioned future. The vision becomes
a statement of “what should be.”
5. Design and Deliver Ways to Create the Future. The final phase involves the
design and delivery of ways to create the future. It describes the activities and
creates the plans necessary to bring about the vision. It proceeds to action and
assessment phases similar to those of action research described previously.
Members make changes, assess the results, make necessary adjustments, and
so on as they move the organization toward the vision and sustain “what will
be.” The process is continued by renewing the conversations about the best of
what is.
Appreciative inquiry
A contemporary approach to planned change. Contrary to typical approaches that
assume organizations are like problems to be solved, appreciative inquiry works under
the assumption that organizations are like mysteries to be understood. A focus on the
“best of what is” in an organization provides the necessary vision for change.
Comparisons of the three change models

- They all have a preliminary stage (unfreezing, diagnosis, initiate the inquiry)
and are followed by a closing stage (refreezing or evaluation)
- All three emphasize the application of behavioral science knowledge, involving
organizational members in the change process (to varying degrees), and
interaction between a consultant and an organization constitutes an
intervention that may affect the organization (?).
- Lewin’s change model differs from the other two in that it focuses on the general
process of planned change rather than on specific OD activities.
13

- Lewin’s model and the action research model differ from the positive approach
in terms of the level of involvement of the participants and the focus of change.
- Lewin’s model and traditional action research emphasize the role of the
consultant with relatively limited member involvement in the change process.
- Contemporary applications of action research and the positive model, on the
other hand, treat both consultants and participants as co-learners who are
heavily involved in planned change.
- Lewin’s model and action research are more concerned with fixing problems
than with focusing on what the organization does well and leveraging those
strengths.
The lines connecting the activities emphasize that organizational change is not a
straightforward, linear process but involves considerable overlap and feedback among
the activities.
Entering and contracting

These events help managers decide whether they want to engage further in a planned
change program and to commit resources to such a process. Once the information is
collected, the problems or opportunities are discussed with managers and other
organization members to develop a contract or agreement to engage in planned
change.
Note: When OD is used in nontraditional and international settings, the entering and
contracting process must be sensitive to the context in which the change is taking
place.
Diagnosing
Diagnosis can focus on understanding organizational problems, including their causes
and consequences, or on collecting stories about the organization’s positive attributes.
14

Three levels of activities: organization issues, group-level issues and individual-level

issues.
Planning and implementing change

Organization members and practitioners jointly plan and implement OD interventions
to achieve the organization’s vision or goals. There are several criteria for designing
interventions, including the organization’s readiness for change, its current change
capability, its culture and power distributions, and the change agent’s skills and
abilities.
Depending on the outcomes of diagnosis, there are four major types of interventions
in OD:
1. Human process interventions at the individual, group, and total system levels
(Chapters 12 and 13)
2. Interventions that modify an organization’s structure and technology (Chapters
14, 15, and 16)
3. Human resources interventions that seek to improve member performance and
wellness (Chapters 17, 18, and 19)
4. Strategic interventions that involve managing the organization’s relationship to
its external environment and the internal structure and process necessary to
support a business strategy (Chapters 20, 21, and 22).
Implementing interventions is concerned with leading and managing the change

process. As discussed in Chapter 10, it includes motivating change, creating a desired
future vision of the organization, developing political support, managing the transition
toward the vision, and sustaining momentum for change.
Evaluating and institutionalizing change

Evaluating the effects of the intervention and managing the institutionalization of
successful change programs so they persist. Feedback to organization members
about the intervention’s results provides information about whether the changes
should be continued, modified, or suspended. Institutionalizing successful changes
involves reinforcing them through feedback, rewards, and training.
Planned change can be contrasted across situations on three key dimensions: the
magnitude of organizational change, the degree to which the client system is
organized, and whether the setting is domestic or international.
Magnitude of change
Planned change efforts can be characterized as falling along a continuum ranging from
incremental changes that involve fine-tuning the organization to fundamental changes
that entail radically altering how it operates.
15

Degree of organization
Planned change efforts also can vary depending on the degree to which the
organization or client system is organized. In over-organized situations, such as in
highly mechanistic, bureaucratic organizations, various dimensions such as
leadership styles, job designs, organization structure, and policies and procedures are
too rigid and overly defined for effective task performance. In under-organized
organizations, on the other hand, there is too little constraint or regulation for effective
task performance. Leadership, structure, job design, and policy are poorly defined and
fail to direct task behaviors effectively.
When applied to organizations facing problems in being under-organized, planned

change is aimed at increasing organization by clarifying leadership roles, structuring
communication between managers and employees, and specifying job and
departmental responsibilities. These activities require a modification of the traditional
phases of planned change and include the following four steps:
1. Identification. This step identifies the relevant people or groups who need to
be involved in the change program. In many under-organized situations, people
and departments can be so disconnected that there is ambiguity about who
should be included in the problem-solving process. For example, when
managers of different departments have only limited interaction with each other,
they may disagree or be confused about which departments should be involved
in developing a new product or service.
2. Convention. In this step, the relevant people or departments in the company
are brought together to begin organizing for task performance. For example,
department managers might be asked to attend a series of organizing meetings
to discuss the division of labor and the coordination required to introduce a new
product.
3. Organization. Different organizing mechanisms are created to structure the
newly required interactions among people and departments. This might include
creating new leadership positions, establishing communication channels, and
specifying appropriate plans and policies.
4. Evaluation. In this final step, the outcomes of the organization step are
assessed. The evaluation might signal the need for adjustments in the
organizing process or for further identification, convention, and organization
activities.
Domestic vs. international settings

Developed in Western societies, OD reflects the underlying values and assumptions
of these cultural settings, including equality, involvement, and short-term time
horizons. Under these conditions, it works quite well. In other societies, a different set
of cultural values and assumptions can be operating and make the application of OD
problematic. The cultures of most Asian countries are more hierarchical and status
conscious, less open to discussing personal issues, more concerned with “saving
16

face,” and have a longer time horizon for results. These cultural differences can make
OD more difficult to implement, especially for North American or European
practitioners; they may simply be unaware of the cultural norms and values that
permeate the society.
Conducting OD in international settings can be highly stressful on OD practitioners.

To be successful, they must develop a keen awareness of their own cultural biases,
be open to seeing a variety of issues from another perspective, be fluent in the values
and assumptions of the host country, and understand the economic and political
context of business in the host country.
Critique of planned change

- Conceptualization of planned change: Although current models outline a
general set of steps to be followed, considerably more information is needed to
guide how those steps should be performed in specific situations.
- Practice of planned change: In situations requiring complex organizational
changes, planned change is a long term process involving considerable
innovation and learning on-site. It requires a good deal of time and commitment
and a willingness to modify and refine changes as the circumstances require.
Some organizations demand more rapid solutions to their problems and seek
quick fixes from experts. Unfortunately, some OD consultants are more than
willing to provide quick solutions.
17

Summary chapter 2:
Theories of planned change describe the activities necessary to modify strategies,
structures, and processes to increase an organization’s effectiveness. Lewin’s change
model, the action research model, and the positive model offer different views of the
phases through which planned change occurs in organizations. Lewin’s change model
views planned change as a three-step process of unfreezing, moving, and refreezing.
It provides a general description of the process of planned change. The action
research model focuses on planned change as a cyclical process involving joint
activities between organization members and OD practitioners. It involves multiple
steps that overlap and interact in practice: problem identification, consultation with a
behavioral science expert, data gathering and preliminary diagnosis, feedback to a
key client or group, joint diagnosis of the problem, joint action planning, action, and
data gathering after action. The action research model places heavy emphasis on data
gathering and diagnosis prior to action planning and implementation, and on
assessment of results after action is taken. In addition, change strategies often are
modified on the basis of continued diagnosis, and termination of one OD program may
lead to further work in other areas of the firm. The positive model is oriented to what
the organization is doing right. It seeks to build on positive opportunities that can lead
to extraordinary performance.
Planned change theories can be integrated into a general model. Four sets of
activities—entering and contracting, diagnosing, planning and implementing, and
evaluating and institutionalizing—can be used to describe how change is
accomplished in organizations. These four sets of activities also describe the general
structure of the chapters in this book. The general model has broad applicability to
planned change. It identifies the steps an organization typically moves through to
implement change and specifies the OD activities needed to effect change. Although
the planned change models describe general stages of how the OD process unfolds,
there are different types of change depending on the situation. Planned change efforts
can vary in terms of the magnitude of the change, the degree to which the client system
is organized, and whether the setting is domestic or international. When situations
differ on those dimensions, planned change can vary greatly. Critics of OD have
pointed out several problems with the way planned change has been conceptualized
and practiced, and specific areas where planned change can be improved.
18

Chapter 3: The organization development

practitioner
- Discuss the roles and characteristics of OD practitioners
- Describe the competencies required of effective OD practitioners
- Compare the internal versus external OD practitioner
- Understand the values and ethics guiding the practice of OD
The term organization development practitioner refers to at least three sets of people:
- People specializing in OD as a profession
- People specializing in fields related to OD (such as reward systems,
organization design, total quality, information technology, and business
strategy)
- Managers and administrators who have gained competence in OD and who
apply it to their own work areas
Competencies of an effective OD practitioner
19

Based on the data in Table 3.1 and the other studies available, all OD practitioners
should have the following basic skills and knowledge to be effective.
1. Intrapersonal skills or self-management competence: Practitioners must

have the personal centering to know their own values, feelings, and purposes
as well as the integrity to behave responsibly in a helping relationship with
others.
2. Interpersonal skills: Practitioners must create and maintain effective
relationships with individuals and groups within the organization and help them
gain the competence necessary to solve their own problems.
3. General consultation skills: Practitioners should know how to engage
organization members in diagnosis, how to help them ask the right questions,
and how to collect and analyze information.
4. Organization development theory: OD practitioners should have a general
knowledge of organization development, such as is presented in this book.
20

Ethical dilemmas
- Misrepresentation: Misrepresentation occurs when OD practitioners claim that
an intervention will produce results that are unreasonable for the change
program or the situation. The client can contribute to the problem by portraying
inaccurate goals and needs. In either case, one or both parties are operating
under false pretenses and an ethical dilemma exists.
- Misuse of data: Misuse of data occurs when information gathered during the
OD process is used punitively. Leaking inappropriate information can be
harmful to individuals and to the organization.
- Coercion: Coercion occurs when organization members are forced to
participate in an OD intervention. People should have the freedom to choose
whether to participate in a change program if they are to gain self-reliance to
solve their own problems.
- Value and goal conflict: This ethical conflict occurs when the purpose of the
change effort is not clear or when the client and the practitioner disagree over
how to achieve the goals.
- Technical ineptness: This final ethical dilemma occurs when OD practitioners
try to implement interventions for which they are not skilled or when the client
attempts a change for which it is not ready.
21

Summary chapter 3:
This chapter has examined the role of the organization development practitioner. The
term OD practitioner applies to three sets of people: individuals specializing in OD as
a profession, people from related fields who have gained some competence in OD,
and managers having the OD skills necessary to change and develop their
organizations or departments. Comprehensive lists enumerate core and advanced
skills and knowledge that an effective OD specialist should possess, but a smaller set
of basic skills and knowledge is applicable for all practitioners at all levels. These
include four kinds of background: intrapersonal skills, interpersonal skills, general
consultation skills, and knowledge of OD theory.
The professional OD role can apply to internal consultants who belong to the
organization undergoing change, to external consultants who are members of
universities and consulting firms or are self-employed, and to members of internal–
external consulting teams. The OD practitioner’s role may be described aptly in terms
of marginality and emotional demands. People with a tolerance for marginal roles
seem especially suited for OD practice because they are able to maintain neutrality
and objectivity and to develop integrative solutions that reconcile viewpoints among
opposing organizational departments. Similarly, the OD practitioner’s emotional
intelligence and awareness are keys to implementing the role successfully. Whereas
in the past the OD practitioner’s role has been described as standing at the client end
of the continuum from client-centered to consultant-centered functioning, the
development of new and varied interventions has shifted the role of the OD
professional to cover the entire range of that continuum.
Although OD is still an emerging field, most practitioners have specific training
that ranges from short courses and workshops to graduate and doctoral education. No
single career path exists, but internal consulting is often a stepping-stone to becoming
an external consultant. Because of the hectic pace of OD practice, specialists should
be prepared to cope with high levels of stress and the possibility of career burnout.
Values have played a key role in OD, and traditional values promoting trust,
collaboration, and openness have been supplemented recently with concerns for
improving organizational effectiveness and productivity. OD specialists may face value
dilemmas in trying to jointly optimize human benefits and organization performance.
They also may encounter value conflicts when dealing with powerful external
stakeholders, such as the government, stockholders, and customers. Dealing with
those outside groups may take political skills, as well as the more traditional social
skills.
Ethical issues in OD involve how practitioners perform their helping role with
clients. As a profession, OD always has shown a concern for the ethical conduct of its
practitioners, and several ethical codes for OD practice have been developed by
various professional associations. Ethical dilemmas in OD arise around
misrepresentation, misuse of data, coercion, value and goal conflict, and technical
ineptness.
22

Chapter 4: Entering and contracting

- Describe the issues associated with entering into an OD process.
- Describe the issues associated with contracting for an OD process.
The planned change process generally starts when one or more managers or
administrators sense an opportunity for their organization/department/group, or
believe that new capabilities need to be developed, or decide that performance could
be improved through OD. Organizations might face impending environmental
conditions that necessitate change in how it operates, can experience particular
problems (poor product quality, high rates of absenteeism or dysfunctional
relationships/conflicts among departments). Or can also be more diffuse and simply
consist of feeling that the organization should be ‘more innovative’, ‘more effective’
etc.
Entering and contracting are the initial steps in the OD process, involving defining in a
preliminary manner the organization’s problems/opportunities for development, and
establishing a collaborative relationship between the ODP and members of the client
system. Set the initial parameters for carrying out he subsequent phases of OD and
define what issues will be addressed by those activities, who will carry them out and
how they will be accomplished.
Entering and contracting can vary in complexity and formality depending on the
situation. A purpose will be proposed, cost estimates (+ supporting resources needed)
will be made, and a time schedule of the project will be made. Both entry and
contracting (+ also diagnosing) phases help members and ODP jointly determine
which issues to focus on, how to collect/analyze data to understand the issues, and
how to work to develop action plans from the data. Determining whether the two parties
should enter into an OD relationship typically involves clarifying the nature of the
organization’s current functioning and the issue(s) to be addressed, the relevant client
system for that issue, and the appropriateness of the particular OD practitioner. The
activities involved in entering an OD relationship:
1. clarifying the organizational issue
2. determining the relevant client
3. selecting the appropriate OD practitioner
Clarifying the organizational issue

When seeking help from OD practitioners, organizations typically start with a
presenting problem—the issue that has caused them to consider an OD process. In
many cases, however, the presenting problem is only a symptom of an underlying
problem. Gaining a clearer perspective on the organizational issue may require
collecting preliminary data. OD practitioners often examine company records and
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interview a few key members to gain an introductory understanding of the

organization, its context, and the nature of the presenting problem.
Be aware: The diagnostic phase of OD involves a far more extensive assessment of
the problematic or development issue than occurs during the entering and contracting
stage. The diagnosis also might discover other issues that need to be addressed, or it
might lead to redefining the initial issue that was identified during the entering and
contracting stage. This is a prime example of the emergent nature of the OD process:
Things may change as new information is gathered and new events occur.
Determining the relevant client

Generally, the relevant client includes those organization members who can directly
impact the change issue, whether it is solving a particular problem or improving an
already successful organization or department.
● Determining the relevant client can vary in complexity depending on the
situation. In those cases where the organizational issue can be addressed in a
specific organization unit, client definition is relatively straightforward. Members
of that unit constitute the relevant client.
● Determining the relevant client is more complex when the organizational issue
cannot readily be addressed in a single unit. Here, it may be necessary to
expand the definition of the client to include members from multiple units, from
different hierarchical levels, and even from outside of the organization.
Selecting an OD practitioner
To help lower the uncertainty of choosing from among external OD practitioners,
organizations may request that proposals be submitted. In these cases, the OD
practitioner must take all of the information gathered in the prior steps and create an
outline of how the process might unfold. Thus, in selecting an OD practitioner perhaps
the most important issue is the fundamental question, “How effective has the person
been in the past, with what kinds of organizations, using what kinds of techniques?” In
other words, references must be checked.
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Developing a contract
The goal of contracting is to make a good decision about how to carry out the OD
process. It can be relatively informal and involve only a verbal agreement between the
client and the OD practitioner. Regardless of the level of formality, all OD processes
require some form of explicit contracting that results in either a verbal or a written
agreement. Such contracting clarifies the client’s and the practitioner’s expectations
about how the OD process will take place. Unless there is mutual understanding and
agreement about the process, there is considerable risk that someone’s expectations
will be unfulfilled. That can lead to reduced commitment and support, to misplaced
action, or to premature termination of the process.
The contracting step in OD generally addresses three key areas:
1. Setting mutual expectations or what each party expects to gain from the OD
process
2. The time and resources that will be devoted to it
3. The ground rules for working together
Mutual expectations
The client states the services and outcomes to be provided by the OD practitioner and
describes what the organization expects from the process and the consultant. The OD
practitioner also should state what he or she expects to gain from the OD process.
This can include opportunities to try new interventions, report the results to other
potential clients, and receive appropriate compensation or recognition.
Time and resources

Resources can be divided into two parts:
- Essential requirements are things that are absolutely necessary if the change
process is to be successful. From the practitioner’s perspective, they can
include access to key people or information, enough time to do the job, and
commitment from certain stakeholder groups. The organization’s essential
requirements might include a speedy diagnosis or assurances that the project
will be conducted at the lowest price. Being clear about the constraints on
carrying out the assignment will facilitate the contracting process and improve
the chances for success.
- Desirable requirements are those things that would be nice to have but are not
absolutely necessary, such as access to special resources or written rather
than verbal reports.
Ground rules
The parameters established may include such issues as confidentiality, if and how the
OD practitioner will become involved in personal or interpersonal issues, how to
terminate the relationship, and whether the practitioner is supposed to make expert
recommendations or help the manager make decisions.
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Interpersonal process issues in entering and contracting.

In most cases, the client’s expectations, resources and working relationship
requirements will not fit perfectly with the OD practitioner’s essential and desirable
requirements. Negotiating differences to improve the likelihood of success can be
intra- and interpersonally challenging. Establishing a healthy relationship makes it
more likely that the client’s desired outcomes will be achieved and the OD practitioner
will be able to improve the org. capacity to manage change in the future. Initial stage
is full of uncertainty and ambiguity:
- Client Issues: for the client, some issues can rise from the OD process (which
may lead to resistance on closure on the contract, either consciously or
unconsciously)
o Exposed and Vulnerable
o Inadequate  feeling incapable of solving the problem
o Fear of losing control  to the ODP – feeling of dependency
- OD Practitioner Issues
o Empathy
o Worthiness and Competence (agreeing to a project for which he has few
skills or experience) - want to be so helpful that he agrees to
unreasonable deadlines, inadequate resources and unachievable
objectives.
o Dependency
o Over identification with client’s issues (which may lead to accepting
unreasonable deadlines or inadequate resources)
In response to reasonable client requests, the ODP may challenge the client’s
motivation and become defensive. ODP should be alert for resistance from the client,
by asking for details and being able to address them skillfully. Also should be mindful
of their own emotional and psychological issues as well as the client’s perspectives.
This will, next to attending the content of the contract, increase the likelihood of
success.
Summary chapter 4:
Entering and contracting constitute the initial activities of the OD process. They set the
parameters for the phases of planned change that follow: diagnosing, planning and
implementing change, and evaluating and institutionalizing it. Organizational entry
involves clarifying the organizational issue or presenting problem, determining the
relevant client, and selecting an OD practitioner. Developing an OD contract focuses
on making a good decision about whether to proceed and allows both the client and
the OD practitioner to clarify expectations about how the change process will unfold.
Contracting involves setting mutual expectations, negotiating time and resources, and
developing ground rules for working together.
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Chapter 5: Diagnosing
- Discuss the philosophy and purpose of diagnosis in organization development.
- Explain the role of diagnostic models in OD, especially the open-systems model.
- Describe and apply organization-level diagnostic processes.
- Describe and apply group-level diagnostic processes.
- Describe and apply individual-level diagnostic processes.
Second major phase in the general model of planned change. Diagnosis is the process
of understanding a system’s current functioning and it provides the information about
existing operations in the organization necessary to design change interventions. It
involves collecting pertinent information about current operations, analyzing those
data, and drawing conclusions for potential change and improvement (needed to
design appropriate interventions to solve problems or enhance effectiveness).
Interventions derive from this diagnosis and include specific actions intended to
improve organizational functioning.
Need for diagnostic models in guiding the process à diagnostic models derive from
conceptions about how organization is functioning, and tell OD practitioners what to
look for in diagnosing organizations, departments, groups, or jobs (serve as a roadmap
for discovering current functioning).
What Is Diagnosis
Diagnosis is the process of understanding how the organization is currently
functioning, and it provides the information necessary to design change interventions.
Diagnosis is a collaborative process between organization members and the OD
consultant to collect pertinent information, analyze it, and draw conclusions for action
planning and intervention. Diagnosis may be aimed at uncovering the causes of
specific problems, focused on understanding effective processes, or directed at
assessing the overall functioning of the organization or department to discover areas
for future development. Diagnosis provides a systematic understanding of
organizations so that appropriate interventions may be developed for solving problems
and enhancing effectiveness.
Those processes help ODP and client members jointly determine what organizational
issues to focus on, how to collect and analyze data to understand them, and how to
work together to develop action steps from the diagnosis. The diagnosis phase
determines whether the proposed change makes sense à understanding each part in
the model and then assessing how the design components align with each other and
with the inputs.
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Diagnosis is happening all the time; managers, organization members, and ODPs
always want to understand the drivers of organization effectiveness and how and why
change is proceeding in a particular way.
The need for diagnostic models

Diagnosis is based on conceptual frameworks that people use to understand how
organizations function à diagnostic models. Such diagnostic models serve as road
maps by identifying areas to examine and questions to ask in determining how an
organization or department is operating. They describe the relationships among
different features of the organization, as well as its context and its effectiveness. They
point out what areas to examine and what questions to ask to assess organizational
functioning. Diagnostic models can be derived from research about organizational
functioning, and ODPs often use their field knowledge to develop diagnostic models.
However, a model is a simplification of reality, thus diagnostic models and processes
must be chosen and used carefully. A lot of the existing models are based on research
or ODPs experiences, and they provide information about how and why certain
organizational systems, processes or functions are effective. These are biased,
narrow focus on certain features of organization.
Open systems model

The open systems model recognizes that organizations exist in the context of a larger
environment that affects how the organization performs and in turn is affected by how
the organization interacts with it. The model suggests that organizations operate within
an external environment, takes specific inputs from the environment, and transforms
those inputs using social and technical processes. The outputs of the transformation
process are returned to the environment and can be used as feedback to the
organization’s functioning. The following open systems properties are described
below: environments; inputs, transformations, and outputs; boundaries; feedback;
equifinality; and alignment.
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- Environments: Organizational environments are everything beyond the

boundaries of the system that can indirectly or directly affect performance and
outcomes.
- Inputs: consist of human resources or other resources, such as information,
energy, and materials, coming into the system. Inputs are part of and acquired
from the organization’s external environment.
- Transformations: the processes of converting inputs into outputs
- Outputs: the results of what is transformed by the system and sent to the
environment. Thus, inputs that have been transformed represent outputs ready
to leave the system.
- Boundaries: the borders, or limits, of the system, to distinguish between
systems and environments. A social system has multiple subsystems and the
boundary line for one subsystem may not be the same as that for a different
subsystem.
- Feedback: information regarding the actual performance or the output results
of the system. Not all such information is feedback, however. Only information
used to control the future functioning of the system is considered feedback.
- Equifinality: similar results or outputs may be achieved with different initial
conditions and in many different ways.
- Alignment: the relationships between the organization and its environment,
between inputs and transformations, between transformations and outputs, and
among the subsystems of the transformation process.
Diagnosing organizational systems

When viewed as open systems, organizations can be diagnosed at three levels.
- The highest level is the overall organization and includes the design of the
company’s strategy, structure, and processes. Large organization units, such
as divisions, subsidiaries, or strategic business units, also can be diagnosed at
that level.
- The next lowest level is the group or department, which includes group design
and devices for structuring interactions among members, such as norms and
work schedules.
- The lowest level is the individual position or job. This includes ways in which
jobs are designed to elicit required task behaviors.
Diagnosis can occur at all three organizational levels, or it may be limited to issues
occurring at a particular level. The key to effective diagnosis is knowing what to look
for at each level as well as how the levels affect each other. A basic understanding of
organizational-level issues is necessary in almost any diagnosis because they serve
as critical inputs to understanding groups and jobs. Diagnosis can occur among all
three levels or be limited to one level. For each organizational level, diagnosing
involves understanding of each of the parts in the model and then assessing how the
design components align with each other and with the inputs to result in effective
outputs. Organization design is an input to group design, which in turn serves as input
to job design. Effective outputs are likely to result from good alignment à cross-level
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relationships emphasize that organizational levels must fit with each other if the
organization is to operate effectively.
Organization-level diagnosis
Two key inputs affect the way an organization designs its strategic orientation: the
general environment and the task environment or industry structure.
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Organization environments and inputs
Environmental types: There are two classes of environments: the general

environment and the task environment. We will also describe the enacted
environment, which reflects members’ perceptions of the general and task
environments.
- The general environment consists of all external forces and elements that can
influence an organization and affect its effectiveness. The environment can be
described in terms of the amount of uncertainty present in social, technological,
economic, ecological, and political/regulatory forces. Each of these forces can
affect the organization in both direct and indirect ways.
- An organization’s task environment or industry structure is another important
input into strategic orientation. Michael Porter defines an organization’s task
environment by five forces: supplier power, buyer power, threats of substitutes,
threats of entry, and rivalry among competitors.
- The enacted environment consists of the organization members’ perception
and representation of its general and task environments.
Environmental dimensions: Environments also can be characterized along

dimensions that describe the organization’s context and influence its responses (thus,
influence the inputs). The environment can be understood in terms of:
- Its rate of change in an organization’s general environment or industry structure
can be characterized along a dynamic–static continuum. Dynamic
environments change rapidly and unpredictably and suggest that the
organization adopt a flexible strategic orientation. Dynamic environments are
high in uncertainty compared to static environments that do not change
frequently or dramatically.
- Complexity of the environment refers to the number of important elements in
the general environment and industry structure. A useful way to understand
how the rate of change and complexity of environments influence organizations
is to view environments as information flows that organizations need to process
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to discover how to relate to their environment. The key dimensions of the

environment affecting information processing, is information uncertainty or the
degree to which environmental information is ambiguous. The greater the
uncertainty, the more information processing is required to learn about the
environment. Organizations seek to remove uncertainty from environment, in
order to know how to transact with it. The greater an environments rate of
change (dynamic) + complexity, the greater the information uncertainty and the
more information the organization must process to learn. This show the degree
to which organizations are constrained by their environments and consequently
must be responsive to their demands.
- Another perspective views environments as consisting of resources for which
organizations compete. The key environmental dimension is resource
dependence, or the degree to which an organization relies on other
organizations for resources. Organizations seek to manage critical sources of
resource dependence while remaining as autonomous as possible.
- These two environmental dimensions—information uncertainty and resource
dependence—can be combined to show the degree to which organizations are
constrained by their environments and consequently must be responsive to
their demands
Design components: a strategic orientation is composed of five major design

components—strategy, technology, structure, measurement systems, and human
resources systems—and an intermediate output—culture. Effective organizations
align their design components to each other and to the environment.
- A strategy represents the way an organization uses its resources (human,
economic, or technical) to achieve its goals and gain a competitive advantage.
It can be described by the organization’s mission, goals and objectives,
strategic intent, and functional policies.
- A mission statement describes the long-term purpose of the organization, the
range of products or services offered, the markets to be served, and the social
needs served by the organization’s existence.
- Goals and objectives are statements that provide explicit direction, set
organization priorities, provide guidelines for management decisions, and serve
as the cornerstone for organizing activities, designing jobs, and setting
standards of achievement.
- A strategic intent is a succinct label or metaphor that describes how the
organization intends to leverage five dimensions of strategy to achieve its goals
and objectives.
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- Technology is concerned with the way an organization converts inputs into

products and services. It represents the core transformation process and
includes production methods, work flow, and equipment.
- The structural system describes how attention and resources are focused on
task accomplishment. It represents the basic organizing mode chosen to (1)
divide the overall work of an organization into subunits that can assign tasks to
individuals or groups and (2) coordinate these subunits for completion of the
overall work.20 Structure, therefore, needs to be closely aligned with the
organization’s technology.
- Two ways of determining how an organization divides work are to examine its
formal structure or to examine its level of differentiation and integration.
- Effective information and control systems clearly are linked to strategic
objectives; provide accurate, understandable, and timely information; are
accepted as legitimate by organization members; and produce benefits in
excess of their cost.
Outputs: The outputs of a strategic orientation can be classified into three

components.
1. First, organization performance refers to financial outputs such as sales, profits,
return on investment (ROI), and earnings per share (EPS). For nonprofit and
government agencies, performance often refers to the extent to which costs
were lowered or budgets met.
2. Second, productivity concerns internal measurements of efficiency, such as
sales per employee, waste, error rates, quality, or units produced per hour.
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3. Third, stakeholder satisfaction reflects how well the organization has met the
expectations of different groups. Customer satisfaction can be measured in
terms of market share or focus-group data; employee satisfaction can be
measured in terms of an opinion survey; investor satisfaction can be measured
in terms of stock price or analyst opinions.
Alignment:
Diagnosis involves understanding each of the parts in the model and then assessing
how the elements of the strategic orientation align with each other and with the inputs.
Organization effectiveness is likely to be high when there is good alignment. This is
very important, since understanding output and effectiveness issues begins with an
assessment of the inputs and design components, and then proceeds to an evaluation
of the alignments among different parts → this is what the diagnosis phase is all about:
order = output - input - design.
Several questions?
1. Does the organization’s strategy fit with the inputs?
To be effective, an organization strategy needs to be responsive to general and tasks
environment (as perceived by members - the enacted environment). Outputs should
meet the needs/demands.
2. Do the organization design components fit with each other to jointly support the
strategy?
When organization’s strategy is highly flexible and responsive to change (innovative),
their design components need to support this with leading edge technologies and
flexible structures for example. If inputs are the same (environment is stable/not
complex), design components should not differ between departments.
Analysis
A useful starting point for an organization-level analysis is to examine outputs and to
ask about the organization’s current effectiveness. Understanding the underlying
causes of the effectiveness issues begins with an assessment of the inputs and
organization design and then proceeds to an evaluation of the alignments among the
different parts (fit between environmental inputs & strategy, and fit between design
components to support the strategy).
Several question are important:
1. What is the company’s general environment?
2. What is the company’s task environment?
3. What is the company’s strategy?
4. What are the company’s technology, structure, management processes, HR
systems, and culture?
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Group-level diagnosis
Work groups → small number of people working together on a shared task either face-
to-face or virtually. Can be relatively permanent and perform an ongoing function, or
can be temporary and exist only to perform a certain task or make a specific decision.
Inputs
On the group level the major inputs to the group are:
- Organization design: consisting of the design components characterizing the
larger organization within which the group is embedded à technology, structure,
management processes, and HR system. Technology can determine
characteristics of the group task - structural systems can specify level of
coordination required among groups - management processes can determine
how much info the group receives and how much decision making and self-
control it can exercise - HR/measurement systems (e.g., performance appraisal
and reward systems) may determine team functioning. Collecting info about the
group’s organization design context can greatly improve the accuracy of
diagnosis;
- Culture: can influence the norms that groups develop to control member
behavior.
Design components
The five major design components of work groups are:
- Goal clarity: how well the group understands its objectives. Goals should be
moderately challenging, there should be a method for measuring, monitoring
and feeding back info about goal achievement, and the goals should be clearly
understood by all members.
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- Task structure: how the group’s work is designed. Task structures can vary
along two dimensions:
o coordination of members’ efforts (involves the degree to which group
tasks are structured to promote effective interaction among members)
o Regulation of their task behaviors (involves the degree to which
members can control their own task behaviors and be relatively free from
external controls such as supervision, plans and programs).
- Group composition: the membership of groups. Demographic variables such as
age, education, experience, skills/abilities, and internal needs/personal traits
can affect how people behave and relate to each other in groups.
- Team functioning: underlying basis of group life. It concerns the quality of group
dynamics among members. Involves group processes having to do with how
members relate to each other → Quality of relationships - very important, since
this component affects task performance. It involves task-related activities,
coordinating and evaluating activities, and group-maintenance function, which
is directed toward holding the group together as cohesive team and includes
encouraging, harmonizing, compromising, setting standards, and observing.
- Performance norms: Member’s beliefs about how the group should perform it’s
ask and include acceptable levels of performance. Norms derive from
interactions among members and serve as guides to group behavior. Once
members agree on these norms, either implicitly or explicitly, then members
routinely perform tasks according to those norms.
Outputs
Team effectiveness is the output, which has two dimensions:
- Performance: measured in terms of the group’s ability to control or reduce
costs, increase productivity or improve quality. → hard measure of
effectiveness
- Quality of work life: concerns work satisfaction, team cohesion, and
organizational commitment.
Alignment
Alignment of the group elements described above is assessed with the following
questions:
1. Does the group design fit with the inputs? Key inputs to group design are the
larger organization’s design and culture. Congruence between organization
design, culture and group design supports overall integration of task behaviors
within the organization. Otherwise, conflicts arise between team and the
organization, which can develop norms that run counter to organizational
effectiveness.
2. Do the group design components fit with each other? The nature of a group’s
task determines how the design components should align with each other.
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Task interdependence and uncertainty as relevant task dimensions:

- When the task is highly interdependent and requires coordination among group
members, the five components all need to promote effective task interaction
among members. When independent, the design components should promote
individual task performance.
- Amount of info processing and decision-making that needs to occur during task
performance. With an uncertain task, task structure, group composition,
performance norms and team functioning should promote self-regulation.
Members should have the necessary freedom, info, and skills to assign
members to appropriate tasks, to decide on production methods, and to set
performance goals. When technology is certain, group design should promote
standardization of behavior and groups should be externally controlled by
supervisors, schedules and plans.
Analysis
Examination of the group’s inputs and design components and assessing the fit among
them can uncover the causes of group problems. Key issue in diagnosing group inputs
is the design of the larger organization within which the group is embedded.
Organization design affects the nature of the issues that are worked on. Problems
facing the team can be explained by assessing how well the group design fits the
inputs, and the alignment among the design components to determine how they fit
together.
Several questions:
1. How clear are the group’s goals?
2. What is the group’s task structure?
3. What is the composition of the group?
4. What are the group’s performance norms?
5. What is the nature of team functioning in the group?
Individual level diagnosis
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Inputs
Four major inputs affect job design:
- Organization design: concerned with the larger organization within which the
individual job is the smallest unit. An organization’s technology, structure,
management processes and HR-systems can have a powerful impact on the
way jobs are designed and on how people experience them. (E.g., uncertain
tasks are likely to support enriched job designs allowing employees flexibility
and discretion, (power/right to act or decide according to one’s own judgment),
in performing tasks). But certain tasks are likely to promote standardized job
designs requiring routinized task behavior.
- Culture: represents the values and norms shared by organizational members.
Guides member’s perceptions, thoughts and actions. Can influence the kinds
of work designs that organizations consider and members perceive as
legitimate. (The more an organization promotes innovation, the more likely job
designs will be highly flexible, and members will see this as the norm).
- Group design: concerns the larger group or department containing the
individual job. Task structure, goal clarity, group composition, performance
norms, and team functioning determine job context and serve as inputs to job
design. More immediate impact on jobs than the larger organization design
components. (Group task structure can determine how individual jobs are
grouped together - as in groups requiring coordination among jobs or in one
comprising collections of independent jobs). When the group is cohesive, group
norms are more likely to be enforced and followed.
- Personal characteristics of jobholders: include age, education, experience, and
skills/abilities. All of these can affect job performance as well as how people
react to job designs. Individual needs (e.g., growth needs) and expectations
(about if they are able to do the job well and that good performance will result
in valued outcomes) can also affect employee job responses and work
motivation.
Design components
Individual jobs have five key dimensions:
1. Skill variety: degree to which a job requires a range of activities and abilities to
perform the work (repetitive work vs. diverse work).
2. Task identity: the degree to which a job requires the completion of a relatively
whole, identifiable piece of work (being able to see a job through from beginning
to end).
3. Task significance: identifies the degree to which a job has a significant impact
on other people’s lives.
4. Autonomy: degree to which a job provides freedom and discretion (power/right
to act or decide according one’s own judgment) in scheduling the work and
determining work methods (e.g., assembly line no autonomy, work pace is
scheduled and preprogrammed tasks).
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5. Feedback about results: degree to which a job provides employees with direct
and clear information about the effectiveness of task performance (e.g.,
assembly line high levels of feedback, whereas college professors often
indirect/ambiguous feedback about how they are performing in the classroom).
→ These job dimensions can be combined into an overall measure of job enrichment.
Enriched jobs have high levels of skills variety, task identity, task significance,
autonomy, and feedback about results. They provide opportunities for self-direction,
learning and personal accomplishment at work. Enriched jobs internally motivate and
satisfy many employees. But also ask for flexibility, engagement and high performance
norms.
Outputs
The output is individual job effectiveness, which includes how well the job is performed
and how people experience their job. Performance is measured in terms of the
quantity, quality, time and cost of producing a particular job outcome (product/service).
Indicators of an individual’s experience of the job include job satisfaction,
absenteeism, and personal development.
Alignment
Job design components must align with each other to produce effective job outputs,
such as high quality and quantity of individual performance, low absenteeism and high
job satisfaction.
1. Does the job design fit with the inputs? Job design should be congruent with the
larger organization design, culture and group design within which the job is embedded.
Both the organization and the group serve as powerful contexts for individual
jobs/positions  support and reinforce particular job designs. (Highly flexible
organization design, participative cultures and work groups that permit members to
self-regulate their behavior align with enriched jobs). These inputs promote autonomy,
flexibility and innovation. Conversely, bureaucratic organizations and cultures and
groups relying on external controls are congruent with job designs scoring low on the
design components  reinforce standardized, routine jobs. Congruence across
different levels of organizational design promotes integration of the organization-
group and job-levels  otherwise, conflicts will emerge. Job design should also fit
jobholders’ personal characteristics if they are to perform effectively and derive
satisfaction from work. Generally, enriched jobs fit people with strong growth needs
(e.g., value skill variety, learning, challenges, autonomy and possession of moderate
to high levels of task relevant skills, abilities and knowledge)  those jobs require
complex info processing and decision-making. Not enriched (traditional) jobs generally
fit people with rudimentary skills/abilities, with low growth needs (e.g., routinized jobs,
require limited skills/experience, low value learning and self-direction). But because
people can develop growth needs and expertise through education, training and
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experience, job design must be monitored and adjusted from time to time to fit
jobholders’ changing needs and enhanced skills/knowledge.
2. Do the job-design components fit with each other? Must align with each other to
provide a clear and consistent direction to how the job should be performed. Enriched
job designs score high on all five design components and signal the need for flexibility,
active engagement and decision making. Traditional job designs score low on all five
design components and signal the need for routine and standardized job
performances.
Analysis
Examination/diagnosis of the inputs and job design components, and how the two
align with each other (and the design components mutually), help to make predictions
about the advisability of the proposed change. Several questions about inputs and
design components:
1. What are the design and culture of the organization within which the individual job
is embedded?
2. What is the design of the group containing the individual job?
3. What are the personal characteristics of the jobholder?
4. How much skill variety is included in the job?
5. How much task identity does the job contain?
6. How much task significance is involved in the job?
7. How much autonomy is included in the job?
8. How much feedback about results does the job contain?
Assessing individual-level outputs involves measures of job satisfaction, performance,

absenteeism and personal development.
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Summary chapter 5:
This chapter presented background information for diagnosing organizations, groups,

and individual jobs. Diagnosis is a collaborative process, involving both managers and
OD practitioners in collecting pertinent data, analyzing them, and drawing conclusions
for action planning and intervention. Diagnosis may be aimed at discovering the
causes of specific problems, or it may be directed at assessing the organization or
department to find areas for future development. Diagnosis provides the necessary
practical understanding to devise interventions for solving problems and improving
organization effectiveness.
Diagnosis is based on conceptual frameworks about how organizations
function. Such diagnostic models serve as road maps by identifying areas to examine
and questions to ask in determining how an organization or department is operating.
The model presented here views organizations as open systems. The organization
serves to coordinate the behaviors of its departments. It is open to exchanges with the
larger environment and is influenced by external forces. As open systems,
organizations are hierarchically ordered; that is, they are composed of groups, which
in turn are composed of individual jobs. Organizations also display six key open
systems properties: environments; inputs, transformations, and outputs; boundaries;
feedback; equifinality; and alignment.
A comprehensive model for diagnosing organizational systems was described and
applied to three organizational levels - organization, group and individual job. It
consists of inputs; a set of design components; and a variety of outputs, such as
performance, productivity, and stakeholder satisfaction. For each organizational level,
diagnosing involves understanding each of the parts in the model and then assessing
how the design components align with each other and with the inputs. Effective outputs
are likely to result from good alignment.
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Chapter 6: Collecting, Analyzing, and Feeding Back

Diagnostic information
Learning objectives
- Understand the importance of the diagnostic relationship in the (OD) process.
- Describe the methods for collecting diagnostic data.
- Understand the primary techniques used to analyze diagnostic data.
- Outline the process issues associated with data feedback.
- Describe and evaluate the survey feedback intervention.
OD is vitally dependent on collecting diagnostic information that will be shared with the
client in jointly assessing how the organization is functioning and determining the best
change intervention. The quality of the info gathered and the effectiveness of the
feedback process are critical parts of the OD process.
The diagnostic relationship

In most cases of planned change, ODPs play an active role in gathering data from
organization members for diagnostic purposes. Before collecting diagnostic
information, ODPs need to establish a relationship with those who will provide and
subsequently use it. Because the nature of that relationship affects the quality and
usefulness of the data collected, it is vital that ODPs clarify for organizational members
who they are, why the data is being collected, what the data gathering will involve, and
how the data will be used. This will remove the initial fear that data will be used against
them and gain participation and support, which is essential for developing successful
interventions.
Diagnostic contract is similar to developing a contract à meant to clarify expectations

and specify conditions of the relationship. The answers to the following questions
provide the substance of the diagnostic contract:
● Who is the OD Practitioner?: Introduction to members who do not know the
ODP and yet will be asked to provide diagnostic data.
● Why is the practitioner here?: goals of the diagnosis and data-gathering
activities
● Who does the practitioner work for?: Who has hired the ODP? One way to build
trust and support for the diagnosis is to have those people directly involved in
establishing the diagnostic contract. Thus, the one that hired the ODP can help
build the proper relationship with those from whom the data will be gathered.
● What does the practitioner want and why? specify how much time/effort people
will need to give. Important to specify that involvement is voluntary.
● How will the practitioner protect your confidentiality? often, there are concerns
about privacy and the possibility of being punished for their responses by their
bosses (especially when providing info about attitudes/perceptions). To
alleviate concerns and increase likelihood of obtaining honest responses, ODP
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must give explicit guarantees of response anonymity. ODP must think carefully
about how to handle confidentiality issues.
● Who will have access to the data? Want to know whether they have access
themselves to their own data, and who else will have similar access. Clarify
access issues and ODP must provide respondents with their own results, so
that members can work on the discovered issues.
● What’s in it for you (the organization)? aimed at providing members with a clear
definition of the benefits they can expect from the diagnosis. Describing the
feedback process and how to handle the results to improve the organization.
● Can the practitioner be trusted: ODP should provide enough time and face-to-
face contact during the contracting process to build trust. This requires the ODP
to listen actively and discuss openly all questions raised by members.
Careful attention to establishing the diagnostic relationship helps to promote the three
goals of data collection.
1. Obtain valid information about organizational functioning. Building a data
collection contract can ensure that organization members provide honest,
reliable, and complete information.
2. Rally energy for constructive organizational change. A good diagnostic
relationship helps organization members start thinking about issues that
concern them, and it creates expectations that change is possible. When
members trust the consultant, they are likely to participate in the diagnostic
process and to generate energy and commitment for organizational change.
3. Develop the collaborative relationship necessary for effecting organizational
change.
If the ODP can show that he is trustworthy, willing to work with the members, and able
to help improve the organization, then the data collection process will contribute to the
long-term collaborative relationship necessary for carrying out changes.
Methods for collecting data

The four major techniques for gathering diagnostic data are questionnaires, interviews,
observations, and unobtrusive measures.
Data collection Primary strengths Primary weaknesses

method
Surveys and Member beliefs and attitudes Relatively impersonal

questionnaires can be quantified easily Mechanistic and rigid- assumes all
Can gather large amount of the right questions are asked
data from many people Easy to over interpret the data
Inexpensive on a per-person Response bias
basis
Interviews Very flexible- can adapt to Relatively expensive

interviewee and data collection Interviewer responses can be biased
subject Difficult to code and interpret
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Data is “rich” Self-report bias

Interview process builds
rapport and empathy
Observations Collects data on actual Difficult to code and interpret

behavior, rather than reports of Sampling may be inconsistent
behavior Observer bias and reliability can be
Real time, not retrospective questioned
Adaptive and objective Can be expensive
Unobtrusive No response bias Privacy, access, and retrieval

measures High face validity difficulties
Easily quantified Validity concerns
Difficult to code and interpret
Questionnaires
One of the most efficient ways to collect data is through questionnaires. Because they
typically contain fixed-response queries about various features of an organization,
these paper-and-pencil measures can be administered to large numbers of people
simultaneously. Also, they can be analyzed quickly, especially with the use of
computers, thus permitting quantitative comparison and evaluation. As a result, data
can easily be fed back to employees.
Questionnaires, however, have a number of drawbacks that need to be taken into

account in choosing whether to employ them for data collection.
- First, responses are limited to the questions asked in the instrument. They
provide little opportunity to probe for additional data or to ask for points of
clarification.
- Second, questionnaires tend to be impersonal, and employees may not be
willing to provide honest answers.
- Third, questionnaires often elicit response biases, such as the tendency to
answer questions in a socially acceptable manner. This makes it difficult to draw
valid conclusions from employees’ self-reports.
Interviews
A second important measurement technique is the individual or group interview.
Interviews are probably the most widely used technique for collecting data in OD. They
permit the interviewer to ask the respondent direct questions. Further probing and
clarification is, therefore, possible as the interview proceeds. This flexibility is
invaluable for gaining private views and feelings about the organization and for
exploring new issues that emerge during the interview.
Interviews may be highly structured—resembling questionnaires—or highly

unstructured—starting with general questions that allow the respondent to lead the
way.
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Although interviewing typically involves one-to-one interaction between an OD

practitioner and an employee, it can be carried out in a group context. Group interviews
save time and allow people to build on others’ responses. A major drawback, however,
is that group settings may inhibit some people from responding freely.
Observations
Observe organizational behaviors in their functional settings. The OD practitioner may
do this by walking casually through a work area and looking around or by simply
counting the occurrences of specific kinds of behaviors. Observation can range from
complete participant observation, in which the OD practitioner becomes a member of
the group under study, to more detached observation, in which the observer is clearly
not part of the group or situation itself and may use film, videotape, and other methods
to record behaviors.
Unobtrusive measures
Unobtrusive data are not collected directly from respondents but from secondary
sources, such as company records and archives.
Sampling
Sampling is not an issue in many OD cases. Because OD practitioners collect
interview or questionnaire data from all members of the organization or department in
question, they do not have to worry about whether the information is representative of
the organization or unit. Sampling becomes an issue in OD, however, when data are
collected from selected members, behaviors, or records. This is often the case when
diagnosing organization-level issues or large systems. In these cases, it may be
important to ensure that the sample of people, behaviors, or records adequately
represents the characteristics of the total population.
1. The larger/more complex the organization, the more difficult it is to establish the
right sample size.
2. The larger the proportion of the population that is selected, the more confidence
one can have about the quality of the sample.
3. Limited resources constrain sample size. If resources are limited but the
required confidence is high, then questionnaires will be preferred over
interviews because more information can be collected per member per dollar.
Sample selection
- Probably the most common approach to sampling diagnostic data in OD is a
simple random sample, in which each member, behavior, or record has an
equal chance of being selected.
- If the population is complex, or many subgroups need to be represented in the
sample, a stratified sample may be more appropriate than a random one.
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Techniques for analyzing data

Data analysis techniques fall into two broad classes: qualitative and quantitative.
Qualitative techniques generally are easier to use because they do not rely on
numerical data. That fact also makes them more open to subjective biases but also
easier to understand and interpret. Quantitative techniques, on the other hand, can
provide more accurate readings of the organizational problem.
Qualitative tools
- Content analysis: summarize comments into meaningful categories.
- Force field analysis: Based on Kurt Lewins three step model of change. This
method organizes information pertaining to organizational change into two
major categories: forces for change and forces for maintaining the status quo
or resisting change.
Quantitative tools
- Means, Standard Deviations, and Frequency Distributions: describing data
- Scattergrams and Correlation Coefficients: relationship between variables
- Difference Tests: compare a sample group against some standard or norm to
determine whether the group is above or below that standard.
Feeding back data

Several characteristics of effective feedback data have been described in the
literature. They include the following nine properties:
1. Relevant. Organization members are likely to use feedback data for problem
solving when they find the information meaningful. Including managers and
employees in the initial data collection activities can increase the relevance of
the data.
2. Understandable. Data must be presented to organization members in a form
that is readily interpreted. Statistical data, for example, can be made
understandable through the use of graphs and charts.
3. Descriptive. Feedback data need to be linked to real organizational behaviors
if they are to arouse and direct energy. The use of examples and detailed
illustrations can help employees gain a better feel for the data.
4. Verifiable. Feedback data should be valid and accurate if they are to guide
action. Thus, the information should allow organization members to verify
whether the findings really describe the organization.
5. Timely. Data should be fed back to members as quickly as possible after being
collected and analyzed. This will help ensure that the information is still valid
and is linked to members’ motivations to examine it.
6. Limited. Because people can easily become overloaded with too much
information, feedback data should be limited to what employees can realistically
process at one time.
7. Significant. Feedback should be limited to those problems that organization
members can do something about because it will energize them and help direct
their efforts toward realistic changes.
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8. Comparative. Feedback data can be ambiguous without some benchmark as

a reference. Whenever possible, data from comparative groups should be
provided to give organization members a better idea of how their group fits into
a broader context.
9. Unfinalized. Feedback is primarily a stimulus for action and thus should spur
further diagnosis and problem solving. Members should be encouraged, for
example, to use the data as a starting point for more in-depth discussion of
organizational issues.
Process of feedback
The most important objective of the feedback process is to ensure that organization
members own the data. Ownership is the opposite of resistance to change and refers
to people’s willingness to take responsibility for the data, their meaning, and the
consequences of using them to devise a change strategy. Ownership of the feedback
data is facilitated by the following five features of successful feedback processes:
1. Motivation to work with the data. People need to feel that working with the
feedback data will have beneficial outcomes.
2. Structure for the meeting. Feedback meetings need some structure or they
may degenerate into chaos or aimless discussion.
3. Appropriate attendance. Generally, people who have common problems and
can benefit from working together should be included in the feedback meeting.
This may involve a fully intact work team or groups comprising members from
different functional areas or hierarchical levels.
4. Appropriate power. It is important to clarify the power possessed by the group.
Members need to know on which issues they can make necessary changes, on
which they can only recommend changes, and over which they have no control.
5. Process help. People in feedback meetings require assistance in working
together as a group. When the data are negative, there is a natural tendency to
resist the implications, deflect the conversation onto safer subjects, and the like.
An OD practitioner with group process skills can help members stay focused
on the subject and improve feedback discussion, problem solving, and
ownership.
Survey feedback
Survey feedback is a process of collecting and feeding back data from an organization
or department through the use of a questionnaire or survey. Survey feedback generally
involves the following five steps:
1. Members of the organization, including those at the top, are involved in
preliminary planning of the survey.
2. The survey instrument is administered to all members of the organization or
department.
3. The OD consultant usually analyzes the survey data, tabulates the results,
suggests approaches to diagnosis, and trains client members to lead the
feedback process.
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4. Data feedback usually begins at the top of the organization and cascades
downward to groups reporting to managers at successively lower levels.
5. Feedback meetings provide an opportunity to work with the data.
Limitations of survey feedback

Although the use of survey feedback is widespread in contemporary organizations, the
following limits and risks have been identified:
- Ambiguity of purpose. Managers and staff groups responsible for the survey-
feedback process may have difficulty reaching sufficient consensus about the
purposes of the survey, its content, and how it will be fed back to participants.
Such confusion can lead to considerable disagreement over the data collected
and paralysis about doing anything with them.
- Distrust. High levels of distrust in the organization can render the survey
feedback ineffective. Employees need to trust that their responses will remain
anonymous and that management is serious about sharing the data and solving
problems jointly.
- Unacceptable topics. Most organizations have certain topics that they do not
want examined. This can severely constrain the scope of the survey process,
particularly if the neglected topics are important to employees.
- Organizational disturbance. The survey-feedback process can unduly disturb
organizational functioning. Data collection and feedback typically infringe on
employee work time. Moreover, administration of a survey can call attention to
issues with which management is unwilling to deal, and can create unrealistic
expectations about organizational improvement.
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Summary chapter 6:
This chapter described methods for collecting, analyzing, and feeding back diagnostic
data. Because diagnosing is an important step that occurs frequently in the planned
change process, a working familiarity with these techniques is essential. Methods of
data collection include questionnaires, interviews, observation, and unobtrusive
measures. Methods of analysis and force-field analysis, and quantitative techniques,
such as determination of mean, standard deviation, and frequency distributions;
scattergrams and correlation coefficients: as well as difference tests. Feeding back
data to a client system is concerned with identifying the content of the data to be fed
back and designing a feedback process that ensures ownership of the data. If
members own the data, they will be motivated to solve organizational problems. A
special application of the data collection and feedback process is called survey
feedback, which enables OD practitioners to collect diagnostic data from a large
number of organization members and to feedback that information for purposes of
problem solving.
49

Chapter 7: Designing interventions

Learning Objectives
- Describe the interventions presented in the text.
- Discuss how contingencies related to the change situation affect the design of
effective organization development (OD) interventions.
- Discuss how contingencies related to the target of change affect the design of
effective OD.
An intervention is a set of sequenced and planned actions or events intended to help

the organization increase its effectiveness. Interventions purposely disrupt the
status quo (and change towards a more effective state). Meant to improve particular
areas of organizational functioning identified in the diagnosis.
Overview of interventions
Four major types of OD interventions:
1. Human Process Interventions
Aimed at people within organizations and their interaction processes such as
communication, problem solving, group decision making and leadership
(represents the earliest change programs of OD; group dynamics and
human/interpersonal relations) - interventions derived from social psychology.
This type of intervention is used when it is expected that organizations’ effectiveness
follows from improved functioning of people and organizational processes.
Three of the oldest and most applied human process interventions are:
2. Process consultation:
Focuses on interpersonal relationships and social dynamics occurring in the
work groups. Process consultant helps group to diagnose group functioning and
devise solutions to process problems (such as dysfunctional conflicts, poor
communication, ineffective norms). Aim is to help members gain skills and
understanding to identify and solve interpersonal problems themselves.
3. Third-party Interventions (Conflict Resolution):
A form of process consultation aimed to improve dysfunctional relationships
through problem solving, bargaining and conciliation. The third-party intervener
helps people resolve conflicts that derive from substantive issues (e.g., disputes
over work methods) or from interpersonal issues (e.g., miscommunication).
4. Team building:
Helps groups become more effective in accomplishing tasks through
diagnosing team processes and finding solutions to problems. Like process
consultation, consultant helps members diagnose group processes and devise
solutions. But team building goes beyond group processes - it includes
examination of group’s tasks, member roles and strategies for performing tasks.
ODP may also function as a resource person, offering expertise related to
group’s task.
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More system-wide human process interventions (focus on entire organization or

department) are:
1. Organization confrontation meetings: mobilizes organization members to
identify problems, set action targets and begin working on problems. Usually
applied when organization is experiencing stress and management needs to
organize resources for immediate problem solving. Generally includes various
groupings of employees.
2. Intergroup relations: to improve interactions between groups or departments.
Microcosm group intervention involves a small group of people whose
backgrounds closely match the organizational problems being addressed. This
group addresses the problems and develops means to solve them. Typically,
the intergroup conflict model involves a consultant helping two groups
understand the causes of their conflict and choose appropriate solutions.
3. Large group interventions: getting a broad variety of stakeholders into a large
meeting to clarify important values, to develop new ways of working, to
articulate a new vision for the organization, or to solve pressing organizational
problems. A powerful tool to create awareness and specifying valued directions
for future action.
Technostructural Interventions
Directed at organization technology (e.g., task methods/job design) and structures
(e.g., hierarchy and division of labor) for linking people and technology. They include
approaches to employee involvement, as well as methods for structuring
organizations, groups and jobs. ODPs stress both productivity and human fulfillment
and expect that organization effectiveness will result from appropriate work designs
and organization structures.
Three technostructural interventions concerned with restructuring organizations are:

1. Structural design: organization’s division of labor - how tasks are subdivided
into work units and how those units are coordinated. These interventions
include moving from more traditional ways of dividing the overall work (e.g.,
self-contained units, matrix structure) to more integrative and flexible forms
(e.g., network-based structures). Diagnostic guidelines exist to determine the
most appropriate structure for a particular organization.
2. Downsizing: layoffs, organization redesign, outsourcing - reduces costs and
bureaucracy by decreasing the size of the organization.
3. Reengineering: redesigning core work processes to create tighter linkage and
coordination among the different tasks, resulting in faster, more responsive task
performance. Often accomplished with new IT that permits employees to
control and coordinate work processes more effectively.
Technostructural interventions for involving employees in decision making (attempt to

move knowledge, power, information, and rewards downward in the organization) are:
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1. Parallel structures: involving organization members in resolving ill-defined,

complex problems, such as cooperative union-management projects and
quality circles. Operate in conjunction with the formal organization and provide
members with setting in which to address problems and solutions.
2. Total quality management: involving organization members into continuously
improving quality as part of normal work operations. Includes extensive training
in TQM knowledge and skills and the constant application of that expertise to
improve quality at work.
3. High-involvement organizations: designs almost all features of the organization
to promote high employee involvement. Changes in structure, work design,
information and control systems and HR practices jointly support member
involvement in relevant decision making.
Change programs/interventions that design work for individual jobs and interactive
groups and involve engineering, motivational, and socio-technical systems
approaches are:
1. Job enrichment: based on motivational principles. Creates jobs with high levels
of autonomy and feedback from the job and employees experience as
meaningful. Results in high job satisfaction and performance quality (especially
when employees have growth and learning needs).
2. Self-managed work teams: designs work for teams performing highly
interrelated tasks that require real-time decision making (responsible for
complete product/service). Not much external controls, control of own task
behaviors.
Human Resources Management Interventions

Focused at integrating people into the organization successfully (practices include
career planning, reward systems, goal setting, performance appraisal, employee
diversity and wellness). Interventions used to select, reward, develop and support
employees. ODPs typically focus on the people in organizations, believing that
organizational effectiveness results from improved practices for integrating employees
into organizations.
HRM interventions concerning performance management are:
1. Goal setting: attempts to improve effectiveness by establishing better fit
between personal and organizational goals, setting clear and
challenging goals. Periodic meeting managers and subordinates to plan
work, review accomplishments and solve problems in achieving goals.
2. Performance appraisal: systematic process of jointly assessing work
related achievements, strengths, and weaknesses for providing
performance feedback to individual and work groups. Represents
important link between goal-setting and reward systems.
3. Reward systems: design of organizational rewards to improve
performance and satisfaction, such as innovative approaches to pay,
promotions and fringe benefits.
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HRM interventions for managing, developing and retaining organizational talent are:
1. Coaching and mentoring: helps managers and executives to clarify their
goals, deal with potential stumbling blocks, and improve their performance.
Focus on personal learning that gets transferred into organizational results
and more effective leadership skills.
2. Management and leadership development: increase members’ skills and
knowledge. Focus is on building the competencies needed to lead the
organization in the future (e.g., lectures, simulations, and action learning).
3. Career planning and development: helps people choose organizations and
career paths and attain their career objectives. Way to increase the retention
of valuable employees and improve quality of work-life - focuses on
mangers and professional staff.
HRM interventions to create support for employees are:

1. Managing workforce diversity: makes HR practices more responsive to a variety
of individual needs. More 4exible set of policies and practices for diverse
workforce.
2. Employee stress and wellness: These interventions include employee
assistance programs (EAPs) and stress management. EAPs are counseling
programs that help employees deal with substance abuse and mental health,
marital, and financial problems that often are associated with poor work
performance. Stress management programs help workers cope with the
negative consequences of stress at work. They help managers reduce specific
sources of stress, such as role conflict and ambiguity, and provide methods for
reducing such stress symptoms as hypertension and anxiety.
Strategic Change Interventions

Targeted at how the organization uses its resources to gain competitive advantage.
Link the internal functioning of the organization to the larger environment and
transform the organization to keep pace with changing conditions. Implemented
organization-wide and bring about a fit between strategy, design and the larger
environment.
Characteristics of transformational change are / strategic interventions (that transform

the way the organization relates to its environment or operates internally) are:
- Organization design: addresses whether organizational structure, work design,
HR practices, management processes and info systems (the organizations‘
architecture) are in alignment with the organization strategy and each other so
they mutually direct behavior to execute the strategy.
- Integrated strategic change: argues that business strategies and organizational
systems must be changed together in response to external and internal
disruptions. Describes how planned change can make a value-added
contribution to strategic management. Strategic change plan helps members
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manage the transition between current strategy and design and desired future
state.
- Culture change (develop culture appropriate to strategies and environment)
Strategic change interventions that are designed to support continuous organizational

change are:
1. Dynamic strategy making: helps to build a strategic system that can adapt to
changing conditions continually. Involves both the content of strategy
formulation and the process of strategy implementation.
2. Self-designing organizations: helps organizations to get the capacity to alter
themselves fundamentally. Is a highly participative process involving multiple
stakeholders in setting strategic directions and designing and implementing
appropriate structures and systems. Organizations learn how to design and
implement their own strategic changes.
3. Learning organizations: increasing the capability of the organization to acquire
and develop new knowledge, including how that knowledge can be organized
and used to improve the performance of the organization. Enable organizations
to move beyond solving existing problems to learn how to improve themselves
continually.
4. Built-to-change organizations: assumption is that the ability to change
continuously is the source of effectiveness (and rejects traditional assumption
that stability is the key to success)
Strategic interventions that shape how organizations collaborate with each other are:
- Mergers and acquisitions: describes how ODP can assist two or more
organizations to form a new entity. Addressing key strategic, leadership, and
cultural issues prior to the legal and financial transaction helps to smooth the
subsequent operational integration of the organizations.
- Alliances: helps two organizations pursue private and common goals through
sharing of resources, such as intellectual property, people, capital, technology,
physical assets. Effective alliance development generally follows a process of
strategy formulation, partner selection, alliance structuring and start up, and
alliance operation and adjustment.
- Networks: this intervention helps to develop relationships between 3 or more
organizations to perform tasks or solve problems that are too complex for single
organization to resolve. Helps organizations recognize the need for
partnerships and develop appropriate structures for implementing them. Also
addresses how to manage change within existing networks.
What are effective interventions?

Interventions are a set of sequenced planned actions or events intended to help an
organization increase its effectiveness. Interventions purposely disrupt the status quo;
they are deliberate attempts to change an organization or subunit toward a different
and more effective state.
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In OD, three major criteria define an effective intervention:
1. The extent to which it fits the needs of the organization (relevant to organization
and its members).
Effective interventions are based on valid information about organizational
functioning (accurate diagnosis of organization - must reflect what members
perceive as their primary concerns/issues); provides organization members
with opportunities to make free and informed choices (members are actively
involved in making decisions about change that affects them); and gain
members’ internal commitment to those choices (organization members accept
ownership of the intervention and take responsibility for implementing it - if
interventions result in meaningful changes, relevant members must be
committed to carrying them out).
→ the principle of free and informed choices stresses voluntary participation.
There is an important distinction between change management – where change
legitimately can be imposed on people – and OD when the intent of the change
process is to build capacity for change and increase effectiveness.
2. The degree to which it is based on causal knowledge of intended outcomes;

because they are intended to produce specific results, interventions must be
based on valid knowledge with outcomes that actually can be produced (e.g.,
assess systematically the strengths and weaknesses of OD interventions and
compare impact of different techniques on organizational effectiveness). This
to create scientific basis for designing an effective OD intervention à evaluative
research. But there is a lack of research up to today (intervention effects and
comparisons in rudimentary stage of development). This makes it difficult to
know whether one method is more effective than another.
3. The extent to which it transfers change management competence to

organization members; extent to which intervention enhances the organization
(members) capacity to manage change on their own. From active participation
in designing and implementing the intervention, they should gain knowledge
and skills in managing change - ability to carry out planned change activities in
the future. This is an essential skill in today’s environment, where changes are
rapid and persistent.
How to design effective interventions

Paying careful attention to the needs and dynamics of the change situation and
crafting a change program that will be consistent with the criteria of effective
interventions (above). There is not much research about how to design interventions
or how they can be expected to interact with organizational conditions/contingencies.
Contingencies relates to the change situation (situational factors that can affect OD
programs):
- Individual differences among organization members
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- Organizational factors (management style, technical uncertainty)

- Dimensions of the Change Process (degree of top management support)
- Expertise of the change practitioner
- Cultural Values and Economic contingencies
Moreover, the design of interventions depends to some extent on the expertise of the
practitioner. Two major sets of contingencies can affect intervention success (both
need to be considered in designing intervention).
Contingencies related to the change situation (including the practitioner):

These include:
- individual differences among organization members (e.g. need for autonomy),
- organizational factors (e.g. management style and technical uncertainty)
- Dimensions of the change process itself (e.g. degree of top-management
support).
In many cases, knowledge of these contingencies results in modifying the change
program to fit the setting. (In applying a reward-system intervention, the changes might
have to be modified depending on whether the firm wants to reinforce individual or
team performance).
Several situational factors that can affect intervention success (specific for each
intervention). But also two more generic contingencies related to the country or
region’s national culture and stage of economic development:
- National culture: Applicability and effectiveness of OD in non-western countries
requires a context based approach to designing interventions, fitting the change
program to the cultural context and values. Cultural values play a major role in
shaping the customs and practices that occur within organizations and
influence how members react to phenomena having to do with power, conflict,
ambiguity, time and change.
Five key values that describe national cultures and influence organizational customs:
1. Context orientation: The extent to which words carry the meaning of a
message/describes how info is conveyed and time is valued in a culture.
Organizations in high context cultures tend to value ceremony and ritual, the
structure is less formal, there are fewer written policies, and people are often
late for appointments
2. Power distance: concerns the way people view authority, status differences and
influence patterns. Organizations in these cultures tend to be autocratic,
possess clear status differences, and have little employee participation
3. Uncertainty avoidance: reflects a preference for conservative practices and
familiar and predictable situations - stable routines, act to maintain issues (e.g.,
effective production). Organizations in these cultures tend to value experts,
prefer clear roles, avoid conflict, and resist change
4. Achievement orientation: The extent to which organization members value
assertiveness and the acquisition of material goods. Organizations in these
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cultures tend to associate achievement with wealth and recognition, value

decisiveness, and gender roles are clearly differentiated
5. Individualism: The extent to which people believe they should be responsible
for themselves and their immediate families. Organizations in these cultures
tend to encourage personal initiative, value time and autonomy, accept
competition, and autonomy is highly valued.
- Economic development: A country’s level of industrial and economic

development. This can be judged from a social, economic and political
perspective. There are three broad stages of economic development:
1. Subsistence economies: Low degree of development, with an
economy that is mostly agriculture based. Populations consume
most of what they produce, and any surplus is used to barter for other
needed goods and services. A large part of the population is
unfamiliar with the concept of employment.
→ OD-interventions emphasize global social change and focus on creating
conditions for sustainable social and economic progress. (Pakistan, Nepal, Nigeria,
Uganda, Rwanda).
2. Industrializing economies: Moderately developed and rich in natural
resources. An expanding manufacturing base that accounts for
increasing amounts of the country’s gross domestic product fuels
economic growth. Formation of a class system including upper-,
middle-, and low-income groups. Organizations operating in these
nations generally focus on efficiency of operations and revenue
growth.
→ OD interventions address strategic, structural and work design issues. They
help organizations identify domestic and international market, develop clear
and appropriate goals and structure themselves to achieve efficient
performance and market growth. (Malaysia, Venezuela, India, Turkey, the
Philippines, Iran, China)
3. Industrial economies: Highly developed countries that emphasize
nonagricultural industry. In these countries manufactured goods are
exported and traded with other industrialized countries. Investment
funds are available internally and externally. The workforce is
educated and skilled. Technology is often substituted for labor.
→ OD interventions have the strongest effect in those contexts. Their continued
success cannot be ensured, however, because these countries are rapidly
advancing to post-industrial conditions. OD interventions need to fit into
economies, driven by information and knowledge, where service outpaces
manufacturing, and where national and organizational boundaries are more
open and flexible. (Sweden, Japan, France, US)
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How National Culture and Economic Development Affect OD Interventions

They can determine whether change proceeds slowly or quickly; involves few or many
members; is directed by hierarchical authority or by consensus; and focuses on
business, organizational or human process issues. When the two situational
contingencies are considered together, they reveal four international settings for OD
Practice. These different situations reflect the extent a country’s culture fits with
traditional OD values of direct and honest communication, sharing power and
improving their effectiveness and the degree to which the country is economically
developed. When the country’s culture supports traditional OD values, OD
interventions can be applied to organizational and human process issues with only
small adjustment
Four international settings:
- Low cultural fit, moderate industrialization

Least suited to traditional OD practice. Industrializing economies that align
poorly with traditional OD values. Dependent on natural resources; relatively
small manufacturing base; high- context cultures; high power-distance and
achievement orientation; moderate uncertainty avoidance; moderate to high
levels of collectivism. Require interventions that fit local customs and address
business issues. Organizational change is slow paced, centrally controlled and
aimed at achieving technical rationality and efficiency. Inconsistent with OD
values of openness, collaboration and empowerment. OD interventions can
only be implemented within this context when strongly supported by senior
management (but they often perceive OD as too soft to meet their business
needs).
- High cultural fit, moderate industrialization
Industrializing economies with cultures that align with traditional OD values.
Such settings support the kinds of OD processes, especially techno structural
and strategic settings that focus on business development. But relatively few
countries fit this context.
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- Low cultural fit, high industrialization

Industrialized countries with cultures that fit poorly with traditional OD values.
Planned change includes all four types of interventions, although the change
process itself is adapted to local conditions. High context cultures, so ODPs
must know not only the language but also the social customs. Moreover,
emphasizing high power distance, uncertainty avoidance and achievement
orientation. Organizations with clear roles, status differences, and clear working
conditions; autocratic and paternalistic decisions; the acquisition of wealth and
influence by the powerful is accepted. ODP also tailors the change process
itself to fit local conditions. To be successful, ODP need sufficient status and
legitimacy (e.g., recommendations from high placed executives) to work with
senior management and to act in expert roles. Subordinates generally are not
included in diagnostic or implementation activities, and cultural norms
discourage employees from speaking out or openly criticizing management.
There is little resistance to change.
- High cultural fit, high industrialization
Industrialized countries with cultural contexts that fits well with traditional OD
values. Change process that is heavily oriented to the needs of all
organizational members, all employees have the right to enriched forms of work
and organization practices are highly participative and egalitarian. All OD
interventions primarily focused on this cultural context.
Contingencies related to the target of change

OD interventions seek to change specific features or parts of organizations. These
targets of change are the main focus of interventions.
Two key contingencies related to change targets that can affect intervention success:
- Organizational issues: (that the intervention is intended to resolve):
Four interrelated issues that are key targets of OD interventions:

1. Strategic issues
organizations need to decide what are the functions, product,
services, markets in which they will compete, how to gain competitive
advantage, how relate to environment, what values will guide
organizational functions and how to cope and keep pace with the
changing conditions. These are the most critical issues in today’s
highly complex, changing and competitive environments.
 Strategic interventions address this issue: integrated strategic change,
mergers and acquisitions, alliance and network development, and
organizational learning.
2. Technological and structural issues:
Organizations need decide how coordinate departments, divide
labor/how to link people to tasks, produce product/services, how to
design work. Techno-structural interventions deal with this: OD
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activities related to organization and work design, employee

involvement, restructuring organizations.
3. Human Resource issues
Concerned with attracting competent/talented people, setting goals
for them, appraising and rewarding performance, and ensuring
career development and manage stress/sustain their wellness. OD
techniques called human resource management interventions:
performance management, talent management, workforce diversity
and wellness.
4. Human process issues
Have to do with social processes occurring among organizational
members (e.g. communication, problem-solving, decision making,
interaction, leadership, group dynamics). OD methods called human
process interventions: conflict resolution and team building (of most
common OD methods).
In short
Particular OD interventions apply to specific issues. But, consistent with system theory
these organizational issues are interrelated and need to be integrated with one
another. Organizations need to match answers to one set of questions with answers
to other sets of questions within the different types of OD interventions to achieve high
levels of effectiveness. The intervention design must create change methods
appropriate to organizations’ issues identified in the diagnosis, and OD interventions
need to be integrated with each other (because the organizational issues are
themselves linked together) à to bring about a broader and more coherent impact on
organizational functioning. Key point is to think systemically! Interventions aimed at
one kind of org. issue will have repercussions on other kind of issues.
Organizational levels (of organization system at which intervention is expected

to have a primary impact):
Organization function at different levels: individual, group, organization, and trans-
organization. Organizational levels are targets of change in OD. For example, some
techno structural interventions affect mainly individuals and groups (e.g. work design),
whereas other impact primarily the total organization (e.g. structural design). However,
many interventions might have secondary (indirect) impact on other levels. For
example, structural design affects mainly the organization level, but it can have an
indirect effect on groups and individual jobs because it sets the broad parameters for
designing work groups and jobs. ODPs must design interventions to apply to specific
organizational levels, address the possibility of cross-level effects, and integrate
interventions affecting different levels to achieve overall success.
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61

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Summary chapter 7:
This chapter discussed designing OD interventions including the four major types of
interventions that are presented in this book: (1) human process interventions aimed
at people within the organization and their interaction processes; (2) technostructural
interventions directed at organization technology and structures for linking people and
technology (3) human resource management interventions focused at integrating
people into the organization successfully; (4) strategic change interventions targeted
at how the organization uses its resources to gain a competitive advantage in the
larger environment. Designing OD interventions is based on a thorough diagnosis of
the organization or subunit. Effective interventions are designed to fit the needs of the
organization, are based on causal knowledge of intended outcomes, and transfer
competence to manage change to organization members. Researchers have identified
two kinds of contingencies on which the success of OD intervention depends. The first
involves the change situation and includes the national culture and stage of economic
development of the country within which the intervention is applied. The other kind of
contingency has to do with the target of change and includes the organizational issue
that the intervention intended to resolve and the organizational level at which the
intervention is expected to have a primary impact. OD interventions need to be
designed to fit these contingencies to achieve expected outcomes.
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Chapter 8: Managing change

- Understand the five key elements of successful change management.
- Explore the processes of change associated with each element.
After diagnosis, organizational members begin planning and subsequently leading and
implementing the changes necessary to improve organizational effectiveness and
performance. This chapter addresses the key activities associated with successfully
leading and managing ANY kind of organizational change.
Overview of change activities
Generally, OD literature is about advising managers how to plan and implement

organizational changes. Traditionally, change management has focused on identifying
sources of resistance to change and offering ways to overcome them. Other
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contributions have challenged the focus on resistance and aimed at creating visions
and desired futures, gaining political support for them, and managing the transition of
the organization toward them. Still others have described the learning practices and
leader behaviors that accelerate the change process. The diversity of practical advice
for managing change can be organized into five major activities. The activities
contribute to effective change management and are listed roughly in the order they
typically are performed. Each activity is important for managing change, should be
managed effectively to realize success, and represents a key element in change
leadership
1. Motivating change
Leadership must create an environment in which people accept the need for change
and commit physical and psychological energy to it. Motivation is a critical issue in
starting change because people and organizations seek to preserve the status quo
and are willing to change only when there are compelling reasons to do so.
- Creating a readiness for change: creating a felt need for change. Making people
so dissatisfied with the status quo that they are motivated to try new work
processes, technologies or ways of behaving.
Three methods that can help generate sufficient dissatisfaction to produce change:
1. sensitizing organizations to pressures for change
Innumerable pressures for change operate both externally (e.g., high
competition, changing technology, global markets) and internally (new
leadership, poor product quality, high production costs, excessive employee
absenteeism/turnover). Organizations must become aware of those
pressures (not neglect them), by encouraging leaders to surround
themselves with devil’s advocates; by cultivating external networks that
comprise people/organizations with different perspectives and views; by
visiting other organizations to gain exposure to new ideas and methods; and
by using external standards of performance, such as competitors’ progress
or benchmarks.
2. revealing discrepancies between current and desired states:
Information about the organization's current functioning is gathered and
compared with desired states of operation. This can motivate organization
members to initiate corrective changes, particularly when members are
committed to achieving those ideals; energize action to improve.
3. convey credible and positive expectations for the change
Positive expectations serve as self-fulfilling prophecy, leading members to
invest energy in change programs that they expect will succeed. When
members expect success, they are likely to develop greater commitment to
the change process and to direct more energy into constructive behaviors
needed to implement it. Can be done by communicating realistic, positive
expectations about the organizational changes.
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- Overcoming resistance to change: at personal level change can arouse anxiety

about letting go of the known and moving to an uncertain future.
At organizational level resistance can come from three sources:
a. technical resistance: common procedures and consideration of sunk
costs invested in status quo
b. political resistance: change threat powerful stakeholders, since
change often implies different allocation of already scarce resources
(e.g., capital, talented people);
c. Cultural resistance: systems/procedures promoting conformity to
existing values, norms and assumptions that reinforce status quo.
Three major strategies for dealing with resistance to change:

1. Empathy and support: learning how people are experiencing change.
Identify people who are having trouble accepting the changes, the nature of
resistance and possible ways to overcome it, through a willingness to
suspend judgment and active listening. Have an open relationship: people
become less defensive and more willing to share concerns/fears when those
responsible for the change are genuinely interested. Establish basis for joint
problem-solving/overcome barriers.
2. Communication: people are resistant when they are uncertain about
consequences. Lack of adequate information fuels rumors/gossip and adds
to the anxiety associated with change. Effective communication can reduce
speculation/fears and can help members realistically prepare for change.
But be careful to not send too much information all the time! People
constantly receive information about the change. One strategy is to make
change information more salient by communicating through a new or
different channel.
3. Participation and involvement: involve members in planning/implementation
phase. This can lead to both designing high quality changes and to
overcome resistance to implementing them. Participants will be committed
since they are directly involved in planning and implementing change and
they are sure that their needs/interests are taken into account. This also
brings new perspectives/ideas to the decision-making process. Moreover,
the act of participation itself can be motivating, leading to greater effort to
make the changes work.
Creating a vision
The “why” and “what” of planned change. The vision provides the core values, purpose
and reasons for change that guide the organization as well as an envisioned future
toward which change is directed. It can also energize commitment to change by
providing a common goal and a compelling rationale for why change is necessary and
worth the effort. However, if the vision is seen as impossible/not realistic, it can
depress motivation. Creating a vision is considered a key element in most leadership
frameworks. Developing a vision is heavily driven by people’s values and preferences
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for what the organization should look like and how it should function. Envisioned future
represents people’s ideals or dreams of what they would like the organization to look
like or become.
Compelling visions are composed of two parts (which together should articulate a
compelling reason for change):
1. Describing the core ideology: a relatively stable identity that describes the
organizations’ core values and purpose (must be discovered). Core values
typically include 3 to 5 basic principles that best represent what the organization
stands for. The organization roots, key events, founders’ beliefs, work they do
and the glue that hold the organization together should be acknowledged to
describe the vision. Core purpose is the organization’s reason for being
(idealistic motivation that brings people to work each day and gives work
meaning), it describes why the organization exists and the organization’s
understanding of its image, brand and reputation. This all is similar to
‘’organizational identity’’, which provides guidelines for strategic choices.
2. Constructing the envisioned/desired future state: unlike core ideology, the
envisioned future is specific to the change project and must be created. The
core ideology does provide context for this envisioned future. Differs in
complexity and scope depending on the considered changes. An envisioned
future can be compelling and emotionally powerful to members only if it aligns
with and supports the organization's’ core values, purpose and identity.
Typically includes:
o Bold and valued outcomes: specific performance and human outcomes
that the organization/unit would like to achieve. They can serve as goals
for the change process and standards for assessing progress (they
challenge organization members).
o Desired future state: vivid (detailed) description of the desired future
state that reflects the specific change under consideration (what
organizations should look like to achieve bold/valued outcomes).
Passionate and engaging statement to draw organizational members
into the future and to help define a desired future state forward which
change activities should move (exciting and compelling).
3. Developing political support for change: Gain support for change from powerful
individuals/groups, since they can either block or promote change. Attempts to
change the organization often threaten the balance of power among
groups/departments, thus resulting in political conflicts and struggles.
Stakeholders have different interests/needs, and compete for scarce resources
and influence (act to preserve or enhance self-interest). Groups/individuals will
be concerned with how the changes affect their own power and influence and
they will act accordingly. Consequently, OD is frequently accompanied by
conflicted interests, distorted information and political turmoil. Methods of
managing political dynamics of organizational change are relatively recent
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additions to OD. ODP’s can use power in positive ways. They can build their
own power base to gain access to other power holders within the organization,
and use power constructively to get those in power to consider OD practices
(e.g., facilitate processes for examining the uses of power in organizations). But
difficult issue, since engaging in power conflicts does not promote OD
values/ethics (which are collaboration & power-sharing). However, managing
the political dynamics of change includes the following activities:
Assessing the change agent’s sources of power:

By evaluating their own power base, change agents can determine how to use it to
influence others to support changes. They can also identify areas in which they need
to enhance their sources of power.
3 sources of personal power in organizations (in addition to one’s formal position):
Knowledge bases of power include having expertise that is valued by others and
controlling important information. Personality sources of power can derive from
change agents’ charisma (charismatic leaders inspire devotion and enthusiasm for
change from subordinates), reputation and professional credibility. Others’ support can
contribute to individual power by providing access to information and resource
networks. Others also may use their power on behalf of the change agent.
Identify key stakeholders whose support is needed: having assessed their own power
bases, change agents should identify powerful individuals and groups with an interest
in the changes. These stakeholders can threat or support change and their support
can minimize the risk that a single interest group will block the changes. Identifying
key stakeholders start with the question: ‘who stands to gain or lose from the
changes?’ Also identify external stakeholders (e.g., suppliers). Once identified,
creating a map of their influence might be useful. This map could show relationships
among the stakeholders in terms of who influences whom and what the stakes are for
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each party. This would provide the change agent with info about which groups need
to be influenced to accept/support the changes.
Influencing stakeholders: this involves gaining support of key stakeholders to motivate

a critical mass for change.
Three strategies for using power:
1. Playing it straight: determining the needs of particular stakeholders and
presenting information about how the changes can benefit them. Based on the
premise that information and knowledge can persuade people about the need
and direction for change (that changers are a logical way to meet their needs).
The success of this strategy relies on the change agents’ personal knowledge
base.
2. Using social networks: this involves forming alliances and coalitions with other
powerful individuals/groups, dealing directly with key decision makers and
using formal and informal contacts to gain information/resources. Use social
relationships to gain support.
3. Going around the formal system: this is least used in OD and involves purposely
circumventing organizational structures and procedures (formal policies) to get
changes made. Bend the rules/working around organizational arrangements.
This strategy relies on a strong personality base of power. Change agents’
charisma, reputation and professional credibility lend legitimacy to going around
the system and can reduce negative reprisals. Their judgment is trusted by
subordinates. However, it can create ethical issues.
Managing the transition

Implementing change involves moving from an existing organizational state to a
desired future state and requires a transition period during which the organization
learns how to implement the conditions needed to reach the desired future state.
Creating a plan for managing the change activities as well as planning special
management structures for operating the organization during the transition.
Four management activities/structures to facilitate organizational transitioning:

1. Activity planning: making a road map for change and determining which
activities and events must occur if the transition is to be successful. Activity
plans can use midpoint goals (conditions between the current state and desired
state to provide members with the direction and security they need to work
towards desired future.
2. Commitment planning: identifying key people/stakeholders whose commitment
is needed and getting their support/gaining commitment by formulating specific
plans/strategies (is part of developing political support). Needs to be done early
in the change process.
3. Change-management structures: Creating structures for managing the change.
These management structures should include people that have the power to
mobilize resources to promote change, the respect of the existing leadership
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and change advocates and the interpersonal and political skills to guide the
change process (assign a project manager temporarily to coordinate the
transition period). So what is the appropriate arrangement of people and power
to drive change?
4. Managing learning processes: to accelerate the transition (what knowledge and
skills does the organization need to support the new behaviors?). Leading
change is largely a function of creating opportunities for organization members
to discuss change activities. Change can be implemented more quickly when
leaders consciously design learning processes into the transition.
Four practices, supported by a continuous dialogue and conversation process

(opportunity to discuss the organizational change that integrates practices and
accelerates implementation), are associated with accelerated change:
1. Creating a system view of the organization: - involves creating a model of work
and change that allows individual organizational members to see how their
efforts contribute to organizational functioning and performance. When they can
see how their efforts support change, it is easier for them to pick up new skills
and knowledge (there is a context created that demands new behaviors).
2. Creating shared meaning: describes the use of models, language, tools, and
processes that provide people with a way to making sense of the change.
Creating common ways of viewing the change, work, customers, and the new
organization, people develop a shared view of the new reality. This lowers
anxiety for the unknown and allows members to learn new skills and behaviors
more quickly.
3. Engaging in ‘after-action reviews’ or other processes that reflect on change
experience: initial attempts to try out new activities, new processes, or new
behaviors are assessed and reviewed. This reflection is used to redesign or
redefine correct behavior. When people get timely and supportive feedback on
new behaviors, their ability to learn increases.
4. Decentralizing implementation processes and decisions to the lowest levels
possible in the organization (local self-design): by allowing organization units in
the lower levels to be responsible for the implementation of change, the overall
change is accelerated. It is important to ensure that the units have a clear
understanding of their boundaries (e.g., what resources are available for
change, the timeline for implementation).
Sustaining momentum
Explicit attention must be directed to sustaining energy and commitment for
implementing changes; the initial excitement and activity of change often fades in the
face of practical problems of trying to learn new ways of operating. Strong tendency
to return to old behaviors, a well-known process when organizational members are not
receiving sustained support and reinforcement for carrying the change through to
completion.
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Activities that help to sustain momentum:

- Providing resources for change: providing extra financial and human resources
for the change program, for training, consultation, data collection, special
meetings etc. This is also helpful to provide a buffer as performance may drop
during the transition period.
- Building a support system for change agents: change is often filled with tension
and the change agent himself often does not get support, which can lead to
isolation. A support system would be a network of people of close
relations/colleagues on whom the change agent can lean.
- Developing new competencies and skills: change agents should help members
gain competencies required to implement changes by training programs, on-
the-job-counseling, coaching etc. Provide learning opportunities to ensure that
learning occurs. They may need to devote special time and resources helping
members gain the social skills required to implement changes, not only for
subordinate members, but also for managers who need to learn new leadership
styles and approaches for problem solving etc.
- Reinforcing the new behaviors: required to implement the changes by linking
formal rewards directly to the desired behaviors (extrinsic rewards). Also
informal recognition, encouragement and praise and intrinsic rewards help to
reinforce new behavior (intrinsic rewards). Early success in the change effort
also reinforces the drive to change.
- Staying the course: effectiveness declines before it gets better. Organizations
should hang in there and not change again too quickly or abandon the change
before it is fully implemented. Also don’t just implement the ‘’flavor of the
month’’. Keep focus on change, it requires considerable time before change is
effective. Patience and trust in the diagnosis, intervention design work AND
persistent leadership that does not waver are necessary. Often, managers fail
to anticipate the decline in performance, productivity and satisfaction at first and
therefore change projects are rejected too fast after seeing short term decline.
Moreover, managers do not stay focused on change because they see new
opportunities. Leaders must give careful attention to each of these 5 activities
when planning and implementing change. Unless individuals are motivated and
committed, getting movement on the desired change will be difficult. In the
absence of a vision, change is likely to be disorganized and diffuse. Without
support of powerful individuals/groups, change may be blocked and possibly
sabotaged. Unless the transition process is managed carefully, the organization
will have difficulty functioning while it moves from the current to future state.
Without efforts to sustain momentum for change, the organization will have
problems carrying the changes through to completion.
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Summary chapter 8:
In this chapter, we described five kinds of activities that change agents must carry out
when planning and implementing changes. The first activity is motivating change,
which involves creating a readiness for change among organization members and
overcoming their resistance. The second activity concerns creating a vision that builds
on an organization’s core ideology. It describes an envisioned future that includes a
bold and valued outcome and a vividly described desired future state. The core
ideology and envisioned future articulate a compelling reason for implementing
change. The third task for change agents is developing political support for the
changes. Change agents first must assess their own sources of power, then identify
key stakeholders whose support is needed for change and devise strategies for
gaining their support. The fourth activity concerns managing the transition of the
organization from its current state to the desired future state. This requires planning a
road map for the change activities, as well as planning how to gain commitment for
the changes. It also may involve creating special change-management structures and
a set of learning processes that accelerate the transition. The fifth change task is
sustaining momentum for the changes so that they are carried to completion. This
includes providing resources for the change program, creating a support system for
change agents, developing new competencies and skills, reinforcing the new
behaviors required to implement the changes, and staying the course.
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Chapter 9: Evaluating and institutionalizing OD

Interventions
Learning objectives
- Illustrate the research design and measurement issues associated with
evaluating organization development interventions.
- Explain the key elements in the process of institutionalizing OD interventions.
Final stage of the OD cycle is evaluation and institutionalization. Evaluation is

concerned with providing feedback to practitioners and organizations 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 results of successful
change programs persist over time. Evaluation processes consider both the
implementation success of the intended intervention and the long-term results it
produces.
Two key aspects of effective evaluation are measurement and research design:
Evaluating OD interventions
Evaluation should take place during and after implementation. It involves judgments
about whether an intervention has been implemented as intended and, if so, whether
it is having the desired results. Results can be used to make resource allocation
decisions about OD. Managers, who are being held accountable for the results, want
to see hard, bottom-line outcomes.
There are two types of OD evaluation:

- intended to guide the implementation of interventions (early in the OD cycle)
- To assess their overall impact.
It is typically argued that once the intervention is implemented, it should be evaluated
to discover whether it is producing the intended effects. Most OD interventions require
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significant changes in people’s behaviors and ways of thinking about the organization,
but they offer only broad descriptions for how such changes are to occur. Implementing
those changes requires considerable learning and experimentation as employees and
managers discover how to translate these general prescriptions into specific behaviors
and procedures. This learning process involves much trial and error and needs to be
guided by info about whether behaviors and procedures are being changed as
intended. Therefore, the view of evaluation should be expanded to include both:
- During-implementation assessments about if and how changes are actually
implemented
- After-implementation evaluation of whether they are producing expected
results.
Both provide members with feedback about interventions. Thus, two kinds of feedback
are necessary for evaluating interventions
Implementation feedback is aimed at guiding implementation of intervention. In most

cases, the chosen intervention and accompanying theories provides only general
guidelines for organizational change, leaving managers/employees with the task of
translating those guidelines into specific behaviors/procedures that fit the situation.
Implementation feedback informs this process; it is concerned with whether the
intervention is being implemented as intended. This comprises data about features of
the intervention itself, perceptions of the people involved and its immediate effects
which are fed back repeatedly in short intervals. Milestones, intermediate targets.
Measures (snapshots) of intervention’s progress. For example, by using interviews
and questionnaires to measure outcomes, employee reactions and company records
to analyze short-term effects of intervention on productivity. Use this feedback to gain
clearer understanding of the intervention (kinds of behaviors and procedures required
to implement it) and to plan for the next implementation steps à feedback cycle that
may proceed for several rounds, involving different modifications to the intervention
until it has been successfully implemented.
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Evaluation feedback: Assessment intended to discover intervention outcomes after it

is successfully implemented. Concerned with whether the intervention produced the
expected results, feedback aimed at determining overall impact of intervention. Takes
longer to gather and interpret. This comprises the data about the long-term effects of
the intervention (goals, outcomes, performance), which are fed back in long intervals.
Broad array of outcome measures, e.g., performance, job satisfaction and productivity.
Negative results tell members either that the initial diagnosis was flawed or that the
wrong intervention was chosen. This asks for alternative interventions and additional
diagnosis. Positive results tell members that the intervention produced expected
outcomes and might prompt for a search for ways to institutionalize the changes.
Organization Environments and Inputs

Environmental Types
- General Environment
- Task Environment and Industry Structure
Rate of Change and Complexity
- Enacted Environment
Environmental Dimensions
- Information Uncertainty
- Resource Dependency
Measurement & Research design

Evaluation of interventions also involves decisions about measurement and research
design. Measurement issues focus on selecting variables and designing good
measures. Ideally, measurement decisions should derive from the theory underlying
the intervention and should include measure of the features of the intervention and its
immediate and long-term consequences. Further, these measures should be
operationally defined (it specifies the empirical data needed, how to collect, how data
will be converted to information), reliable, and valid and should involve multiple
methods such as a combination of questionnaires, interviews and company records.
Providing useful implementation and evaluation feedback involves two activities:

1. Selecting appropriate variables: ideally the change variables measured in OD
evaluation should derive from theory or conceptual models underlying the
intervention, and including key features + expected results (e.g., the job level
diagnostic model and intervention theory). Intervention theory specifies the
kinds of results that can be expected from particular change programs.
Important to include both outcome measures (long term impact (e.g.
satisfaction, work quality, performance) and intervention measures (how well
the intervention has been implemented on short term, e.g., task variety,
feedback & autonomy with job enrichment intervention). This measurement
helps determine the correct interpretation of outcome variables), because
outcome measures are ambiguous without knowledge about intervention
variables. Also measure both attitudinal outcomes (e.g. job satisfaction) and
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hard measures (e.g. performance). All these measurement variables should

already be included in the initial diagnosis, when companies’ problems are
discovered. Research to develop standardized set of behavioral outcomes for
assessing and comparing intervention results, two broad categories:
- Participation membership: absenteeism, tardiness, turnover internal
employment stability, and strikes and work stoppage
- Performance on the job: productivity, quality, grievance, accidents,
unscheduled machine downtime and repair, material and supply overuse and
inventory shrinkage.
All of these outcomes should be important to most managers, and they represent
generic descriptions that can be adapted to organizations.
2. Designing good measures: each of the measurement methods has (dis)

advantages. Many of these characteristics are linked to the extent to which a
measurement is:
- Operational definition: It specifies the empirical data needed, how they
will be collected and (most important) how they will be converted from
data to information. Operational definitions provide precise guidelines
about what characteristics of the situation to be observed and how they
are to be used. Tell ODP and organization members exactly how
diagnostic, intervention and outcome variables will be measured.
- Reliability: the extent to which a measure represents the ‘true’ value of a
variable; how accurately the operational definition translated data into
information (e.g., count sold cars to measure productivity is reliable, but
rating job satisfaction on 1-5 scale creates room for variation in
response, difficult to specify). OD practitioners can improve reliability by:
o Rigorously and operationally define chosen variables, explicitly
describing how collected data will be coded into information about
variable.
o Use multiple methods to measure a particular variable, to avoid
biases of methods and see if consistent results occur.
o Use multiple items to measure the same variable on a
questionnaire, or use specific (available) methods that can
analyze and categorize content of interviews and observation
data so it can be understood and replicated.
o Use standardized instruments (e.g., available standardized
questionnaires for measuring OD intervention and outcome
variables). These standardized instruments can be used for initial
diagnosis, guiding implementation, and for evaluating immediate
and long-term outcomes.
- Validity: the extent to which a measure actually reflects the variable it is
intended to reflect (number of sold cars might be reliable measure for
productivity, but not a valid measure because it is only one aspect of
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productivity (does not determine quality, costs etc.). OD practitioners can

increase validity by:
o Face or content validity: ask colleagues and clients if proposed
measure actually represents a particular variable to increase
confidence.
o Use multiple measures of the same variable to make preliminary
assessments of the measure’s criterion or convergent validity.
See if several different measures of the same variable correlate
highly with each other, especially helpful when one of the
variables has been validated in prior research
o Discriminant validity: exists when the proposed measure does not
correlate with measure that is not supposed to correlate with / do
measures of ‘non-similar’ variables show no association? Lack of
correlation would be an indicator that one variable is measuring
what it needs to measure and not something else.
o Predictive validity: when variable of interest accurately forecasts
another variable over time. However, it is difficult to establish
validity of a measure until it has been used. Therefore, ODPs
should use content validity processes and measures that are
already validated in research. (Best to ask organization members
and colleagues for evaluation of specific method before use, this
creates ownership and commitment to data collection process
and improve likelihood that the client system will find the data
meaningful.
Research design
Research design focuses on setting up the conditions for making valid assessments
of an intervention’s effects. To achieve valid results, ODPs have to ensure:
1. Internal validity: how to design assessment to show whether intervention did
produce observed results (testing a hypothesis - namely, that specific
organizational changes lead to certain outcomes). To claim that an intervention
is successful, it is necessary to demonstrate that other explanations, in the form
of rival hypotheses, do not account for the observed results.
2. External validity: whether the intervention would work similarly in other
situations. External validity is irrelevant without first establishing an
intervention’s primary effectiveness, so internal validity is the essential
requirement for assessing interventions.
Unless managers can have confidence that the outcomes are the result of the
intervention, they have no rational basis for making decisions about accountability and
resource allocation. However, OD interventions often have a number of features that
make it difficult to determine whether they produced the observed results. They are
complex and often involve several interrelated changes that obscure whether
individual features or combinations are accounting for the results. Moreover, they are
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long-term projects, which creates the chance that other factors (e.g., technology
improvements) will affect the results over time. Finally, OD interventions usually are
applied to existing work units rather than randomized groups. Ruling out alternative
explanations associated with randomly selected intervention and comparison groups
is therefore difficult.
Features of Strong Research Designs

1. Longitudinal measurement: measuring results repeatedly over relatively long
time periods.
2. Comparison unit: compare results in intervention with other (similar) situation
without any change. Appropriate use of ‘control’ groups.
3. Statistical analysis: to rule out possibility that results are caused by random
error or chance. Alternative sources of variation and random errors have been
controlled.
Quasi-experimental research designs using longitudinal data, comparison groups and

statistical analysis permit reasonable assessments of intervention effectiveness.
Repeated measures can often be collected from company records without directly
involving members of the experimental and comparison groups. These unobtrusive
measures are especially useful in OD assessment because they do not interact with
the interventions and affect the results. Multiple measures of intervention and outcome
variables should be applied to minimize measurement and intervention interactions.
And when used together, the two kinds of measures should produce accurate and
nonreactive evaluations of the intervention.
The use of multiple measures is also important in assessing perceptual changes

resulting from interventions. There are three types of change that occur when using
self-report, perceptual measures of reality:
1. Alpha change: movement along a measure that reflects stable dimensions of
reality. For example, comparative measures of perceived employee discretion
might show an increase after a job enrichment program. If this increase
represents an alpha change, it can be assumed that the job enrichment
program actually increased perceptions of discretion
2. Beta change: intervals are recalibrated along some constant measure of reality.
For example, before-and-after measures of perceived employee discretion can
decrease after a job enrichment program. The first measure of discretion may
accurately reflect the individual’s belief about the ability to move around and
talk in the immediate work area. During implementation of the intervention,
however, the employee may learn that the ability to move around is not limited
to the immediate work area. At a second measurement moment, the employee,
using this new understanding, may rate the current level of discretion as lower
than before. Thus, because raters received new information (through
experiences) and therefore understand the construct differently after the
intervention.
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3. Gamma change: involves fundamentally redefining the measure as a result of

an OD intervention. The framework within which a phenomenon is viewed
changes. For example, the presence of gamma change would make it difficult
to compare measures of employee discretion taken before and after
intervention. The measure taken after the intervention might use the same
words to describe the concept, but represent an entirely different concept. (The
term ‘discretion’ may refer to the ability to move about the immediate work
area). After the intervention, discretion might be defined in terms of the ability
to make decisions about work rules etc. though. In this way, an intervention can
change the way a variable (i.e. work autonomy) is perceived and how it is
evaluated / fundamental redefinition of a dimension.
When changes other than alpha ones occur, interpreting measurement changes
becomes far more difficult. Strong OD interventions may produce both beta and
gamma changes, and this severely complicates interpretations of findings reporting
change or no change. Further, the distinctions among the three different types of
change suggest that the heavy reliance on questionnaires should be balanced by
using other measures. Analytical methods have been developed to assess the three
kinds of change, and ODPs should gain familiarity with these techniques.
Institutionalizing Organizational Changes
Framework that identifies organization and intervention characteristics and

institutionalization processes affecting the degree to which change programs are
institutionalized. Two key antecedents (organization and intervention characteristics)
affect direct institutionalization processes operating in organizations. These
processes, in turn, affect various indicators of institutionalization. Organizational
characteristics can also influence intervention characteristics (e.g. powerful
stakeholders may not support intervention/change).
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OD interventions are institutionalized when the change program persists and becomes
part of the organization’s normal functioning. This concerns changes such as the
process for appraising performance, not such as innovation, which is a continuous
process of adaption. These changes are not dependent on any one person but exist
as a part of the organization’s culture, numerous others share norms about the
appropriateness of the changes. Lewin’s refreezing; maintaining changes them as a
normal part of the organizational functioning for an appropriate period of time
(persistence of changes). Recently, change itself has become the focus of
institutionalization since it is important to learn to change continuously. Built to change,
organizational learning and self-design interventions are aimed at enhancing
organizational change capability. In this vein, processes of institutionalization take on
increased utility.
Institutionalization is not an all or nothing concept, but reflects the degree of

persistence in a change.
Organization characteristics and intervention characteristics lead to the

institutionalization processes which in turn lead to indicators of institutionalization:
Organization characteristics
Can affect intervention characteristics and institutionalization processes.
- Congruence: Extent to which an intervention supports or aligns with the current
environment, strategic orientation, or other changes taking place.
When intervention is congruent with these dimensions, probability improved
that it will be supported and sustained. This makes it easier to create
commitment, because the intervention is in line with existing norms.
Congruence can facilitate persistence.
- Stability of environment and technology: degree to which the organizational
environment and technology are changing. Persistence of change is favored in
stable environments.
- Unionization: unions make institutionalizing more difficult, especially if changes
affect union contract issues (rigid contracts, changes concern e.g. salary and/or
job design), but they can also be a powerful force to promote change when
there is a good relationship between union and managers.
Intervention characteristics
Can affect institutionalization processes
- Goal specificity: objective vs. subjective. The extent to which intervention goals
are specific rather than broad. Specificity provides focus, helps direct
socializing activities to particular behaviors required to implement intervention,
and helps to operationalize new behaviors so that rewards can be clearly linked
to them. (A change program to improve product quality is easier to implement
and sustain than a program that wants to improve quantity, quality, safety and
absenteeism).
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- Programmability: the extent to which the characteristics of the intervention can

be specified clearly in advance to enable socialization, commitment, and reward
allocation or the degree to which changes can be programmed. Plan and design
intervention to specific features.
- Level of change target: the extent to which the change target is the total
organization rather than a department or small work group. A lower level
(individual) is easier to institutionalize, but change should be system wide. Each
level has facilitators and inhibitors of persistence. Department/group change
are susceptible to countervailing forces from others in the organization. These
can reduce diffusion of the intervention and lower its ability to impact
organizations effectiveness (except for departments that insulate themselves
from the rest of the organization). Targeting toward wider segments of the
organization can also help or hinder change. A shared belief about
intervention’s value can be a powerful incentive to maintain change, and
promote consensus across departments exposed to change, which can
facilitate institutionalization. But this can also inhibit it (more stakeholders
involved, chance of political resistance increases) ‘not invented here’
syndrome.
- Internal support: degree to which there is an internal system to guide change
process. Typically provided by an internal consultant, internal support can gain
commitment for the changes and help organization members implement them.
Helps members relate to other organizational units, resolve conflicts and
legitimize the change. External consultants can also give support, bring
expertise and train members to deal with change/new design.
- Sponsorship: Management with power to allocate resources and nurture
change program. Presence of powerful sponsor who can initiate, allocate and
legitimize resources for the intervention. They must have visibility and power to
nurture the intervention and see that it remains viable.
Institutionalization processes
Five institutionalization processes can directly affect the degree to which OD
interventions are institutionalized:
1. Socialization: Communicate information about change across organization.

The transmission of information about beliefs, preferences, norms and values
with respect to the intervention across organization. Interventions involve often
learning and experimentation, which requires continual socialization to promote
persistence of the change program. This helps bring new members on board.
Keep the changes viable. Focus on ongoing meaning of the change (in order
for people to remember it).
2. Commitment: not only to the change program, but also to the desired change.
Members freely select change behaviors. Binds people from all organization
levels to behaviors associated with the intervention. It includes initial
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commitment to the program, as well as recommitment over time. Should allow

people to select the necessary behaviors freely and use them over time.
3. Reward allocation: involves linking rewards to the new behaviors required by
an intervention which can enhance the persistence of changes and motivation
by:
a. a combination of intrinsic and extrinsic rewards
b. New behaviors will persist to the extent that rewards are perceived as
equitable by employees (fairly compensate new behaviors; over time
they become ‘norms’). Reinforce people in the right way, so they feel
valued.
4. Diffusion: Transmission of change across organization systems. Providing a
wider organizational base to support the new behaviors; reduces counter-
implementation force (provide normative consensus; reinforce commitment
other systems).
5. Sensing and calibration: detecting deviations from desired intervention
behaviors and taking corrective action to ensure that behaviors are more in line
with intervention. A sensing mechanism, which provides info about the
occurrence of deviations (e.g., obtained from implementation feedback).
Implementation feedback.
Indicators of institutionalization
Knowledge: the extent to which organization members have knowledge of the

behaviors associated with the intervention. Do they know enough to perform the
behaviors and recognize the consequences of that performance?
Performance: concerned with the degree to which intervention behaviors are actually
performed (e.g., frequency). In assessing frequency, it is important to account for
different variations of the same essential behavior, as well as highly institutionalized
behaviors that need to be performed only infrequently.
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Preferences: the degree to which organization members privately accept the

organization changes. This contrasts with acceptance based primarily on
organizational sanctions or group pressures. Private acceptance usually is reflected
in people’s positive attitudes toward the changes. Has to be voluntarily. This is
measured by the direction and intensity of the attitudes across the members of the
work unit receiving the intervention.
Normative consensus: extent to which people agree about the appropriateness of the
change. It reflects how fully changes have become part of the normative structure of
the organization (culture). Changes persist to the degree members feel they should
support them. It is the norm for organizational functioning.
Value consensus: social consensus on values relevant to the organizational changes.

It is abstractions of the more specific norms; beliefs about how people should behave.
These 5 indicators can be used to assess the level of change persistence. The more
indicators are present in a situation, the higher will be the degree of institutionalization.
Also, they are logically and specifically ordered: People first must understand new
behaviors before they can perform them effectively. That performance generates
punishment and rewards, which affect people’s preferences. As many people come to
prefer the changes, normative consensus about their appropriateness develops.
Finally, this should lead to value consensus. Given this view, if one of the last
indicators is present, all the previous ones are automatically included as well. An OD
intervention is fully institutionalized only when all 5 factors are present. Whenever one
of the indicators is present, all the previous ones are automatically included as well.
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Summary chapter 9:
We discussed in this chapter the final two stages of planned change—evaluating
interventions and institutionalizing them. Evaluation was discussed in terms of two
kinds of necessary feedback: implementation feedback, concerned with whether the
intervention is being implemented as intended, and evaluation feedback, indicating
whether the intervention is producing expected results. The former comprises
collected data about features of the intervention, perceptions of the people involved,
and its immediate effects, which are fed back repeatedly and at short intervals. The
latter comprises data about the long-term effects of the intervention, which are fed
back at long intervals.
Evaluation of interventions also involves decisions about measurement and research
design. Measurement issues focus on selecting variables and designing good
measures. Ideally, measurement decisions should derive from the theory underlying
the intervention and should include measures of the features of the intervention and
its immediate and long-term consequences. Further, these measures should be
operationally defined, reliable, and valid and should involve multiple methods, such as
a combination of questionnaires, interviews, and company records.
Research design focuses on setting up the conditions for making valid assessments
of an intervention’s effects. This involves ruling out explanations for the observed
results other than the intervention. Although randomized experimental designs are
rarely feasible in OD, quasi-experimental designs exist for eliminating alternative
explanations.
OD interventions are institutionalized when the change program persists and becomes
part of the organization’s normal functioning. A framework for understanding and
improving the institutionalization of interventions identified organization characteristics
(congruence, stability of environment and technology, and unionization) and
intervention characteristics (goal specificity, programmability, level of change target,
internal support, and sponsorship) that affect institutionalization processes. The
framework also described specific institutionalization processes (socialization,
commitment, reward allocation, diffusion, and sensing and calibration) that directly
affect indicators of intervention persistence (knowledge, performance, preferences,
normative consensus, and value consensus).
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Chapter 10: Interpersonal and group process

approaches
Learning objectives
- Understand the diagnostic issues associated with interpersonal relations and
group dynamics interventions
- Illustrate the principles of the process consultation intervention
- Describe the process of third-party conflict resolution
- Discuss and evaluate the core organization development intervention of team
building
Diagnostic issues in interpersonal and group process interventions

The primary design components of group’s effectiveness are goal clarity, task
structure, composition, group functioning, and performance norms. When group
process promotes effective interactions, groups are likely to perform tasks
successfully. Group process includes:
- Communications: Nature and style of communication. Can be overt or covert.
- The functional roles of group members: Group members must take on roles that
enhance (a) task related activities and (b) group maintenance actions.
- Group problem solving and decision making: identify problems, examine
alternatives, make decisions.
- Group norms: determine whether group norms are helpful or dysfunctional.
- The use of leadership and authority: adjust leadership style to fit the situation.
Process consultation
Process consultation (PC) is a general framework for carrying out helping
relationships. Schein defines process consultation as “the creation of a relationship
that permits the client to perceive, understand, and act on the process events that
occur in [his or her] internal and external environment in order to improve the situation
as defined by the client.” The process consultant does not offer expert help in the form
of solutions to problems, as in the doctor–patient model. Rather, the process
consultant works to help managers, employees, and groups assess and improve
human processes, such as communication, interpersonal relations, decision making,
and task performance.
As a philosophy of helping in relationships, Schein proposes ten principles to guide

the process consultant’s actions:
- Always try to be helpful. Process consultants must be mindful of their

intentions, and each interaction must be oriented toward being helpful.
- Always stay in touch with the current reality. Each interaction should
produce diagnostic information about the current situation. It includes data
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about the client’s opinions, beliefs, and emotions; the system’s current
functioning; and the practitioner’s reactions, thoughts, and feelings.
- Access your ignorance. An important source of information about current
reality is the practitioner’s understanding of what is known, what is assumed,
and what is not known. Process consultants must use themselves as
instruments of change.
- Everything you do is an intervention. Any interaction in a consultative
relationship generates information as well as consequences. Simply conducting
preliminary interviews with group members, for example, can raise members’
awareness of a situation and help them see it in a new light.
- The client owns the problem and the solution. This is a key principle in all
OD practice. Practitioners help clients solve their own problems and learn to
manage future change.
- Go with the flow. When process consultants access their own ignorance, they
often realize that there is much about the client system and its culture that they
do not know. Thus, practitioners must work to understand the client’s
motivations and perceptions.
- Timing is crucial. Observations, comments, questions, and other interventions
intended to be helpful may work in some circumstances and fail in others.
Process consultants must be vigilant to occasions when the client is open (or
not open) to suggestions.
- Be constructively opportunistic with confrontive interventions. Although
process consultants must be willing to go with the flow, they also must be willing
to take appropriate risks. From time to time and in their best judgment,
practitioners must learn to take advantage of “teachable moments.” A well-
crafted process observation or piece of feedback can provide a group or
individual with great insight into their behavior.
- Everything is information; errors will always occur and are the prime
source for learning. Process consultants never can know fully the client’s
reality and invariably will make mistakes. The consequences of these mistakes,
the unexpected and surprising reactions, are important data that must be used
in the ongoing development of the relationship.
- When in doubt, share the problem. The default intervention in a helping
relationship is to model openness by sharing the dilemma of what to do next.
Group Process
Process consultation deals primarily with the interpersonal and group processes that
describe how organization members interact with each other. Group process includes:
1. Communications
2. The functional roles of group members
3. Group problem solving and decision making
4. Group norms
5. The use of leadership and authority
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Basic process interventions

- Individual interventions → Johari window
Individual interventions encourage people to be more open with others and to disclose
their views, opinions, concerns, and emotions, thus reducing the size of the hidden
window. Further, the consultant can help individuals give feedback to others, thus
reducing the size of the blind window. Reducing the size of these two windows helps
improve the communication process by enlarging the open window, the “self” that is
open to both the individual and others.
- Group interventions: These interventions are aimed at the process, content,

or structure of the group. Process interventions sensitize the group to its own
internal processes and generate interest in analyzing them. Interventions
include comments, questions, or observations about relationships between and
among group members; problem solving and decision making; and the identity
and purpose of the group.
- Content interventions help the group determine what it works on.
- Structural interventions help the group examine the stable and recurring
methods it uses to accomplish tasks and deal with external issues.
- Third-party interventions: Third-party interventions focus on conflicts arising

between two or more people within the same organization. Conflict is inherent
in groups and organizations and can arise from various sources, including
differences in personality, task orientation, goal interdependence, and
perceptions among group members, as well as competition for scarce
resources.
An episodic model of conflict

Interpersonal conflict often occurs in iterative, cyclical stages known as “episodes.”
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The episodic model identifies four strategies for conflict resolution. The first three
attempt to control the conflict, and only the last approach tries to change the basic
issues underlying it.
1. The first strategy is to prevent the ignition of conflict by arriving at a clear
understanding of the triggering factors and thereafter avoiding or blunting them
when the symptoms occur.
2. The second control strategy is to set limits on the form of the conflict. Conflict
can be constrained by informal gatherings before a formal meeting or by
exploration of other options. It also can be limited by setting rules and
procedures specifying the conditions under which the parties can interact.
3. The third control strategy is to help the parties cope differently with the
consequences of the conflict. The third-party consultant may work with the
people involved to devise coping techniques, such as reducing their
dependence on the relationship, ventilating their feelings to friends, and
developing additional sources of emotional support. These methods can reduce
the costs of the conflict without resolving the underlying issues.
4. The fourth method is an attempt to eliminate or to resolve the basic issues
causing the conflict.
Facilitating the conflict resolution process

- mutual motivation to resolve the conflict
- equality of power between the parties
- coordinated attempts to confront the conflict
- relevant phasing of the stages of identifying differences and of searching for
integrative solutions
- open and clear forms of communication
- productive levels of tension and stress
Team building
Team building refers to a broad range of planned activities that help groups improve
the way they accomplish tasks, help members enhance their interpersonal and
problem solving skills, and increase team performance.
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Team-building activities
A team is a group of interdependent people who share a common purpose, have
common work methods, and hold each other accountable (temporary groups, virtual
teams etc.). Several factors can affect the outcomes of any specific team-building
activity:
- the length of time allocated to the activity
- the team’s willingness to look at its processes
- the length of time the team has been working together
- the team’s permanence
Activities relevant to one or more individuals

Developmental activities that address one or more members of the group include
coaching, 360-degree feedback, and assistance with conflict. These interventions
attempt to alter the group’s ongoing processes by focusing on the behaviors and
attitudes of individual members.
Activities Oriented to the Group’s Operation and Behavior

Developmental activities aim to improve the group’s process and functioning. This
includes role clarification, improving goal clarity and member commitment, modifying
the decision making or problem-solving process, changing norms, increasing risk
taking and trust, and improving communication.
Activities Affecting the Group’s Relationship with the Rest of the Organization
Developmental activities involve actions that improve or modify the group’s
contribution to the organization, how it acquires resources, or alters its outputs in terms
of cost, quality, and quantity.
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The Manager’s Role in Team Building

Ultimately, the manager is responsible for team functioning, although this responsibility
obviously must be shared by the group itself. Therefore, it is management’s task to
develop a work group that can regularly analyze and diagnose its own effectiveness
and work process.
The role of the OD consultant is to work closely with the manager (and members of
the team) to a point at which the manager is capable of engaging in team development
activities as a regular and ongoing part of overall managerial responsibilities.
Summary chapter 10:

In this chapter, we presented human process interventions aimed at interpersonal
relations and group dynamics. Among the earliest interventions in OD, these change
programs help people gain interpersonal competence, work through interpersonal
conflicts, and develop effective groups.
Process consultation is used not only as a way of helping groups become
effective but also as a means whereby groups learn to diagnose and solve their own
problems and continue to develop their competence and maturity. Important areas of
activity include communications, roles of group members, difficulties with problem-
solving and decision-making norms, and leadership and authority. The basic
difference between process consultation and third-party intervention is that the latter
focuses on interpersonal dysfunctions in social relationships between two or more
individuals within the same organization and is targeted toward resolving direct conflict
between those individuals.
Team building is directed toward improving group effectiveness and the ways
in which members of teams work together. Teams may be permanent or temporary or
traditional or virtual, but their members have either common organizational aims or
work activities. The general process of team building, like process consultation, tries
to equip a team to handle its own ongoing problem solving.
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Chapter 11: Organization process approaches

- Understand the diagnostic issues associated with organization-wide process
interventions
- Demonstrate the organization confrontation meeting
- Compare the intergroup relations interventions of microcosm groups and
intergroup conflict
- Describe and evaluate the effectiveness of large-group interventions
Organization confrontation meeting

The confrontation meeting is an intervention designed to mobilize the resources of the
entire organization to identify problems, set priorities and action targets, and begin
working on identified problems. Originally developed by Beckhard, the intervention can
be used at any time but is particularly useful when the organization is under stress and
when there is a gap between the top and the rest of the organization (such as when a
new top manager joins the organization).
Application Stages
The organization confrontation meeting typically involves the following steps:
1. A group meeting of all those involved is scheduled and held in an appropriate
place. Usually the task is to identify problems related to the work environment
and the effectiveness of the organization.
2. Groups are appointed representing all departments of the organization. For
obvious reasons, a subordinate should not be in the same group as his or her
boss, and top management should form its own group. Group size can vary
from five to fifteen members, depending on such factors as the size of the
organization and available meeting places.
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3. The point is stressed that the groups are to be open and honest and to work
hard at identifying problems they see in the organization. No one will be
criticized for bringing up problems and, in fact, the groups will be judged on their
ability to do so.
4. The groups are given an hour or two to identify organization problems.
Generally, an OD practitioner goes from group to group, encouraging openness
and assisting the groups with their tasks.
5. The groups then reconvene in a central meeting place. Each group reports the
problems it has identified and sometimes offers solutions. Because each group
hears the reports of all the others, a maximum amount of information is shared.
6. Either then or later, the master list of problems is broken down into categories.
This can be done by the participants, by the person leading the session, or by
the manager and his or her staff. This process eliminates duplication and
overlap and allows the problems to be separated according to functional or
other appropriate areas.
7. Following problem categorization, participants are divided into problem- solving
groups whose composition may, and usually does, differ from that of the original
problem-identification groups.
8. Each group ranks the problems, develops a tactical action plan, and determines
an appropriate timetable for completing this phase of the process.
9. Each group then periodically reports its list of priorities and tactical plans of
action to management or to the larger group.
10. Schedules for periodic (frequently monthly) follow-up meetings are established.
At these sessions, the team leaders report either to top management, to the
other team leaders, or to the group as a whole regarding their team’s progress
and plans for future action. The formal establishment of such follow-up
meetings ensures both continuing action and the modification of priorities and
timetables as needed.
Intergroup relations interventions

The ability to diagnose and understand intergroup relations is important for OD
practitioners because (1) groups often must work with and through other groups to
accomplish their goals; (2) groups within the organization often create problems and
place demands on each other; and (3) the quality of the relationships between groups
can affect the degree of organizational effectiveness.
- A microcosm group uses members from several groups to help solve
organization wide problems.
- Intergroup conflict resolution helps two groups work out dysfunctional
relationships.
Both interventions are aimed at diagnosing and addressing important organization-
level processes and issues, such as conflicts, coordination of organizational units and
diversity, after which solutions are implemented in the larger organization. Intergroup
relations interventions are designed to help solve a variety of organizational problems
and improve organizational processes.
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Microcosm groups
A microcosm group consists of a small number of individuals who reflect the issue
being addressed. They address organizational design and cultural issues, solve
communication problems, facilitate merger integration, explore diversity issues,
address dysfunctional political processes and smooth the transition to a new structure.
Microcosm groups work through “parallel processes,” which are the unconscious
changes that take place in individuals when two or more groups interact. After groups
interact, members often find that their characteristic patterns of roles and interactions
change to reflect the roles and dynamics of the group with whom they were relating.
The process of using a microcosm group to address organization wide issues involves
the following five steps:
1. Identify an issue. This step involves finding a system wide problem to be
addressed. This may result from an organizational diagnosis or may be an idea
generated by an organization member or task force.
2. Convene the group. Once an issue is identified, the microcosm group can be
formed. The most important convening principle is that group membership
needs to reflect the appropriate mix of stakeholders related to the issue.
Following the initial setup, the group itself becomes responsible for determining
its membership. It will decide whether to add new members and how to fill
vacant positions. Convening the group also draws attention to the issue and
gives the group status. Members need to be perceived as credible
representatives of the problem. This will increase the likelihood that
organization members will listen to and follow the suggestions they make.
3. Provide group training. Once the microcosm group is established, training is
provided in group problem solving and decision making. Team-building
interventions also may be appropriate. Group training focuses on establishing
a group mission or charter, working relationships among members, group
decision-making norms, and definitions of the problem to be addressed.
4. Address the issue. This step involves solving the problem and implementing
solutions. OD practitioners may help the group diagnose, design, implement,
and evaluate changes. A key issue is gaining commitment in the wider
organization to implementing the group’s solutions.
5. Dissolve the group. The microcosm group can be disbanded following
successful implementation of changes. This typically involves writing a final
report or holding a final meeting.
Results of microcosm groups

The microcosm group intervention derives from intergroup relations theory by Alderfer,
which is applied to communications and race-relations problems. A microcosm group
that addressed communication problems improved the way meetings were conducted;
developed promotion programs and conducted new employee orientations. It seems
it has positives affect, but due to the difficulty of measuring parallel processes more
research on the subject is needed.
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Resolving Intergroup Conflict

The intergroup conflict intervention is designed specifically to help two groups or
departments within an organization resolve dysfunctional conflicts. Intergroup conflict
is neither good nor bad in itself, and in some cases, conflict among departments is
necessary and productive for organizations. This applies where there is little
interdependence among departments and conflict or competition among them can
spur higher levels of productivity.
Application Stages
A basic strategy for improving interdepartmental or intergroup relationships is to
change the perceptions (perhaps, more accurately, misperceptions) that the two
groups have of each other. One formal approach for accomplishing this, originally
described by Blake and his associates, consists of a 10-step procedure.
1. A consultant external to the two groups obtains their agreement to work directly
on improving intergroup relationships. (The use of an outside consultant is
highly recommended because without the moderating influence of such a
neutral third party, it is almost impossible for the two groups to interact without
becoming deadlocked and polarized in defensive positions.)
2. A time is set for the two groups to meet—preferably away from their normal
work situations.
3. The consultant, together with the managers of the two groups, describes the
purpose and objectives of the meeting: to develop better mutual relationships,
explore the perceptions the groups have of each other, and formulate plans for
improving the relationship. Then, the two groups are encouraged to establish
norms of openness for feedback and discussion.
4. The two groups are assigned to separate rooms and asked to write their
answers to the three questions. Usually, an outside consultant works with each
group to help the members become more open and to encourage them to
develop lists that accurately reflect their perceptions, both of their own image
and of the other group.
5. After completing their lists, the two groups reconvene. A representative from
each group presents the written statements. Only the two representatives are
allowed to speak.
6. When it is clear that the two groups thoroughly understand the content of the
lists, they separate again. By this point, a great number of misperceptions and
discrepancies have been brought to light.
7. The task of the two groups (almost always with a consultant as a process
observer) is to analyze and review the reasons for the discrepancies. The
emphasis is on solving the problems and reducing the misperceptions.
8. When the two groups have worked through the discrepancies, as well as the
areas of common agreement, they meet to share both the identified
discrepancies and their problem-solving approaches to those discrepancies.
9. The two groups are asked to develop specific plans of action for solving specific
problems and for improving their relationships.
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10. When the two groups have gone as far as possible in formulating action plans,
at least one follow-up meeting is scheduled so that the groups can report on
actions that have been implemented, identify any further problems that have
emerged, and, where necessary, formulate additional action plans.
In addition, there are a number of informal procedures. These different approaches to

resolving intergroup conflict form a continuum from behavioral solutions to attitudinal
change solutions.
Behavioral solutions: are oriented to keeping relevant parties physically separate and
specifying the limited conditions under which interaction will occur. Little is made
attempt to understand or change how members of each group see the other. Most
applicable in situations in which task interdependence between conflicting groups is
relatively low and predictable. Higher management can separate the departments for
example, and schedule/standardize their interaction.
Attitudinal solution: Are aimed at changing how each group perceives the other. Such
interventions typically require considerably more skill and time than behavioral
solutions. Therefore, only use these interventions when behavioral solutions won’t
work. However attitudinal change interventions seem necessary when task
interdependence between the two conflicting groups is high and unpredictable.
Results of intergroup conflict interventions

Positive results in a variety of settings, including union management relations, an
Indian tribal council, government organizations and profit firms. The results
include attitudinal changes (e.g., improved perceptions, increased trust and less
stereotyping) in addition to improved operational results. The technology for improving
intergroup relations is promising. A greater distinction between attitudinal and
behavioral changes needs to be mad in planning effective intergroup interventions. A
greater variety of interventions that address the practical difficulties of bringing two
groups together is also necessary. More research is needed on how culture affects
intergroup conflict and how to adjust interventions to cross-cultural situations. Finally,
more research is needed to identify when conflict needs to be intensified and when it
should be reduced (when does it become dysfunctional?).
Large-group interventions
They focus on issues that affect the whole organization or large segments of it, such
as developing new products or services, responding to environmental change,
redesigning the organization, or introducing new technology. The defining feature of
large-group intervention is the bringing together of large numbers of organization
members and other stakeholders, often more than a hundred, for a two- to four-day
meeting or conference. Here, conference attendees work together to identify and
resolve organization wide problems, to design new approaches to structuring and
managing the firm, or to propose future directions for the organization. The
interventions represent a combination of open-systems thinking, participation and
social construction, and self-management.
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There are four large group meeting assumptions:

- Open-systems thinking assumption: Directs attention to how
organizations interact with and are shaped by their environments.
Proponents of large group interventions suggest that an organization’s
current state is the result of the intentional and unintentional interaction
among many groups and individuals both inside and outside the
organization.
- Social construction assumption: only by developing a shared
understanding of the environment and the organization among these
stakeholders can ‘common ground’ be found and coordinated action be
possible. Without a broad and shared view, conflicts can arise about what
parts of the environment or what actions are most important.
- Participation assumption: a variety of organization stakeholders must be
involved to create an accurate view of the environment and organization.
Organization members’ perceptions must accurately reflect the conditions
of the environment if organizational responses are to be effective.
- Self-management assumption: Large group processes must create
conditions for ownership and commitment. All large group methods attempt
to create a rhythm of large group presentations balanced against small-
group discussions, exercises, tasks and dialogues
Application Stages
Conducting a large-group intervention generally involves preparing for the meeting,
conducting it, and following up on outcomes. These activities are described below.
Preparing for the Large-Group Meeting

A design team comprising OD practitioners and several organization members is
formed to organize the event. The team generally addresses three key ingredients for
successful large-group meetings: a compelling meeting theme, appropriate
participants, and relevant tasks to address the theme.
- Compelling meeting theme. Large-group interventions require a compelling
reason or focal point for change. Although “people problems” can be an
important focus, more powerful reasons for large-group efforts include
managing impending mergers or reorganizations, responding to environmental
threats and opportunities, or proposing radical organizational changes.
Whatever the focal point for change, senior leaders need to make clear to
others the purpose of the large-group meeting. Ambiguity about the reason for
the intervention can dissipate participants’ energy and commitment to change.
- Appropriate participants. A fundamental goal of large-group interventions is
to “get the whole system in the room.” This involves inviting as many people as
possible who have a stake in the conference theme and who are energized and
committed to conceiving and initiating change. Senior managers, suppliers,
union leaders, internal and external customers, trade-group representatives,
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government and regulatory officials, and organization members from a variety

of jobs, genders, races, and ages are potential participants.
- Relevant tasks to address the conference theme. As described below, these
tasks typically are assigned to several subgroups responsible for examining the
theme and drawing conclusions for action. Generally, participants rely on their
own experience and expertise to address systemwide issues, rather than
drawing on resources from outside of the large-group meeting. This ensures
that the meeting can be completed within the allotted time and that members
can participate fully as important sources of information.
- Post meeting follow-through. Abundant evidence suggests that without a
clear plan for taking the outputs, action-plans and recommendations from a
large group intervention, the meeting will just be an event. Change will not
occur. Given the high expectations that are often generated by this intervention,
it is imperative that the design team specify how the outputs from the meeting
will be used – this can include clarifying how leaders will make decisions about
which recommendations to support and fund, how action plans from the
conference will be integrated or how changes will be implemented.
Conducting the Meeting

The flow of events in a large-group meeting can vary greatly, depending on its purpose
and the framework adopted. Most large-group processes, however, fit within three
primary frameworks: open-systems methods, open space methods, and positive
methods. These various methods reflect different strategies for dealing with the four
key dilemmas of large-group interventions:
- The dilemma of voice refers to the problem of encouraging participation on
the one hand and being overwhelmed if each individual wants to speak. Even
when a large-group event is relatively small in terms of participants, time would
quickly run out if everyone wanted to speak up in the large group.
- The dilemma of structure refers to how tightly or loosely the meeting should
be organized. Some methods, like the open-systems processes described
below, can be tightly controlled while others, like the open-space methods, are
almost unstructured. The dilemma is not knowing how much structure a
particular group prefers, how much they want, or how much anxiety they are
experiencing.
- The egocentric dilemma refers to the problem of people holding on to their
own personal views of right or wrong, better or worse. When individuals hold
on too tightly, it makes large-group decision making difficult. When a large-
group event overly represents one stakeholder group, that group can dominate
the conversation and be less open to alternative points of view.
- The dilemma of emotional contagion refers to a group dynamic where many
people take on the frustrations or excitement of others. When emotional
contagion happens, people unconsciously give up their ownership of a problem,
action, or solution and get swept up in the moment. It represents a large-group
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version of “groupthink” and can result in solutions that people, upon reflection,
cannot support.
Open-Systems Methods
A variety of large-group approaches, such as search conferences, open-systems
planning, decision accelerators, and real-time strategic change, have their basis in
open-systems methods and are among the more structured large group processes.
These approaches help organizations assess their environments systematically and
develop strategic responses to them. They help organization members develop a
strategic mission for relating to the environment and influencing it in favorable
directions. Open-systems methods begin with a diagnosis of the existing environment
and how the organization relates to it. They proceed to develop possible future
environments and action plans to bring them about. These steps are described below.
1. Map the current environment surrounding the organization. In this step,
the different domains or parts of the environment are identified and prioritized.
This involves listing all external groups directly interacting with the organization,
such as customers, suppliers, or government agencies, and ranking them in
importance. Participants then are asked to describe each domain’s
expectations for the organization’s behavior.
2. Assess the organization’s responses to environmental expectations. This
step asks participants to describe how the organization currently addresses the
environmental expectations identified in step 1.
3. Identify the core mission of the organization. This step helps to identify the
underlying purpose or core mission of the organization, as derived from how it
responds to external demands. Attention is directed at discovering the mission
as it is revealed in the organization’s behavior, not as it is pronounced in the
organization’s official statement of purpose. This is accomplished by examining
the organization and environment transactions identified in steps 1 and 2 and
then assessing the values that seem to underlie those interactions. These
values provide clues about the actual identity or mission of the organization.
4. Create a realistic future scenario of environmental expectations and
organization responses. This step asks members to project the organization
and its environment into the near future, assuming no real changes in the
organization. It asks participants to address the question: “What will happen if
the organization continues to operate as it does at present?” Participant
responses are combined to develop a likely organization future under the
assumption of no change.
5. Create an ideal future scenario of environmental expectations and
organization responses. Members are asked to create alternative, desirable
futures. This involves going back to steps 1, 2, and 3 and asking what members
ideally would like to see happen in the near future in both the environment and
the organization. Compare the present with the ideal future and prepare an
action plan for reducing the discrepancy. Planning for appropriate interventions
typically occurs in three timeframes: tomorrow, six months from now, and two
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years from now. Participants also decide on a follow up schedule for sharing
the flow of actions and updating the planning process.
6. Compare the present with the ideal future and prepare an action plan for
reducing the discrepancy: This last step identifies specific actions that will
move both the environment and the organization toward the desired future.
Planning for appropriate interventions typically occurs in three time frames:
tomorrow, six months from now and 2 years from now. Participants also decide
on a follow up schedule for sharing the flow of actions and updating the planning
process.
There are a number of variations on this basic model, each follows a similar pattern of
creating common ground, discussing the issues, and devising and agenda for change.
Open-Space Methods
The second approach to large-group interventions attempts to address the four
dilemmas by imposing a minimal level of formal structure. Open space methods
temporarily restructure or “self-organize” participants around interests and topics
associated with the conference theme. They generally follow these steps:
1. Set the conditions for self-organizing. In the first step, the OD practitioner or
manager responsible for the large-group intervention sets the stage by
announcing the theme of the session and the norms that will govern it. In
addition, participants are informed that the meeting will consist of small-group
discussions convened by the participants and addressing any topic they believe
critical to the theme of the conference. Two sets of norms govern how open-
space methods are applied, and although the norms may sound ambiguous,
they are critical to establishing the conditions for a successful meeting.
a. The first set of norms concerns the “Law of Two Feet.” It encourages
people to take responsibility for their own behavior—to go to meetings
and discussions where they are learning, contributing, or in some way
remaining interested. Moving from group to group is legitimized by the
roles of “butterflies” and “bumblebees.” Butterflies attract others into
spontaneous conversations and, in fact, may never attend a formal
meeting. Bumblebees go from group to group and sprinkle knowledge,
information, or new ideas into different meetings.
b. The second set of norms is labeled the “Four Principles.”
i. The first principle is “whoever comes is the right people.” It is
intended to free people to begin conversations with anyone at any
time. It also signals that the quality of a conversation is what’s
most important, not who’s involved.
ii. The second principle, “Whatever happens is the only thing that
could have,” infuses the group with responsibility, encourages
participants to be flexible, and prepares them to be surprised.
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iii. “Whenever it starts is the right time” is the third principle and is
aimed at encouraging creativity and following the natural energy
in the group.
iv. The final principle, “When it is over, it is over,” allows people to
move on and not feel like they have to meet for a certain time
period or satisfy someone else’s requirements.
2. Create the agenda. The second step in open-space interventions is to develop
a road map for the remainder of the conference. This is accomplished by asking
participants to describe a topic related to the conference theme that they have
passion for and interest in discussing. This process continues until everyone
who wants to define a topic has been given the chance to speak. The final
activity in this step asks participants to sign up for as many of the sessions as
they have interest in. The open-space meeting begins with the first scheduled
sessions.
3. Coordinate activity through information. During an open-space session,
there are two ways to coordinate activities.
a. First, each morning and evening a community meeting is held to
announce new topics that have emerged for which meeting dates and
times have been assigned, or to share observations and learnings.
b. Second, as the different meetings occur, the conveners produce one-
page summaries of what happened, who attended, what subjects were
discussed, and what recommendations or actions were proposed.
Positive Methods
The final large-group intervention represents a hybrid approach to the four dilemmas.
It is distinguished from the other two methods by its use of the positive approach to
change described in Chapter 2. These methods can increase members’ energy for
change and build a broad consensus toward a new future. Like other large-group
methods, these approaches can help look at a variety of organizational issues;
however, their distinguishing feature is the “appreciative” framing of issues and the
leveraging of the organization’s positive core attributes. The Appreciative Inquiry (AI)
Summit approach suggests that human organizing and change should be a relational
process of inquiry, grounded in affirmation and appreciation. The four-steps in an AI
summit are as follows:
1. Discover the organization’s positive core. With respect to the purpose of the
summit, participants first pair up with another person and conduct an
appreciative interview. Following the interviews, the pairs join up with three
other pairs to discuss their answers to the questions. These small-group
conversations are then aggregated to create a broad and inclusive list of
success factors and other themes associated with these successful
experiences.
2. Dream about and envision a more desired and fulfilling future. In this step,
participants use the themes and success factors from the first activity to develop
compelling images of the future. Unlike open system or open space methods,
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there is very little prioritizing or culling out of the best or more compelling
themes. The positive approach believes that breadth and inclusiveness are the
most important way to galvanize organization change.
3. Design the structural and systems arrangements that will best reflect and
support the vision or dream. Members of the summit identify the design
features (strategies, structures, systems, processes) that will need to be in
place to make the vision a reality. This step allows participants to articulate the
dream in concrete terms.
4. Create the specific action plans that will fulfill the organization’s destiny.
The primary task of destiny step is to identify the projects, initiatives, and action
plans required to implement the design criteria. Task forces are formed, teams
volunteer to take on projects, and any governance mechanisms needed to
coordinate the effort are created.
Following up on Meeting Outcomes

Follow-up efforts are vital to implementing the action plans from large-scale
interventions. These efforts involve communicating the results of the meeting to the
rest of the organization, gaining wider commitment to the changes, and structuring the
change process. In those cases where all the members of the organization were
involved in the large-group meeting, implementation can proceed immediately
according to the timetable included in the action plans.
Results of large group interventions

The number of case studies describing the methods and results of large group
intervention has increased dramatically. However, despite the proliferation of practice,
empirical research is severely lacking. Data that is available tends to be anecdotal or
single case studies from practitioners and consultants who have commercial stake in
promoting their own methods. As a reaction to this problem more research was done
with the following results:
Group composition or getting the whole system in the room affected group process,
but the data showed that it was balanced representation that was important. When the
decision accelerators were populated with relatively equal numbers of organization
members, the large group process was more likely to consider the views of the
different stakeholders and consider a wider variety of strategy, vision and change
options.
Characteristics of the group’s process had important influences on the decision

accelerator outcomes. The more intense the debate and discussion of different issues
in the meeting, the more comprehensive, aggressive and innovative was the strategy
and vision as described by the participants.
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Summary chapter 11:

This chapter described three types of system wide process interventions: confrontation
meetings, intergroup interventions, and large-group interventions. The organization
confrontation meeting is a way of mobilizing resources for organizational problem
solving and seems especially relevant for organizations undergoing stress. The
intergroup relations approaches are designed to help solve a variety of organizational
problems. Microcosm groups can be formed to address particular issues and use
parallel processes to diffuse group solutions to the organization. The intergroup
conflict resolution approach involves a method for mitigating dysfunctional conflicts
between groups or departments. Conflict can be dysfunctional in situations in which
groups must work together. It may, however, promote organizational effectiveness
when departments are relatively independent of each other. Large-group interventions
are designed to focus the energy and attention of a “whole system” around
organizational processes such as a vision, strategy, organization design, or culture. It
is best used when the organization is about to begin a large-scale change effort or is
facing a new situation. These three process interventions represent important, time-
honored, and successful methods of introducing change in organizations.
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Chapter 12: Restructuring Organizations

Learning objectives
- Describe the most common organization structures used today and understand
their strengths and weaknesses.
- Present the process of downsizing.
- Describe and evaluate the reengineering intervention.
The structure of an organization describes how the overall work of the organization is
divided into subunits and how these subunits are coordinated for task completion.
Organizational structures should fit with the environment, organization size,
technology and organization strategy. Change programs focuses on the technology
and structure of organizations.
Increasing global competition and rapid technological and environmental changes are
forcing organizations to restructure themselves from rigid bureaucracies to leaner,
more flexible designs (highly adaptive, innovative, fewer managers, streamlined work
flows that break down functional barriers à requires more sophisticated managerial
capabilities).
Division between more traditional ways of dividing the organization's overall work,
such as functional, divisional and matrix structures, to more integrative and flexible
forms, such as process, consumer centric and network structures.
Diagnostic guidelines help determine which structure is appropriate for particular

organization environments, technologies and conditions.
Two interventions:
1. Downsizing seeks to reduce costs and bureaucracy by decreasing the size of
the organization à can be accomplished through layoffs, organizational
redesign and outsourcing. Successful downsizing is closely aligned with the
organization strategy.
2. Reengineering radically redesigns the organization core work processes to
give tighter linkage and coordination among the different tasks. Results in
faster, more responsive task performance, and is often accomplished with new
information technology that permits employees to control and coordinate work
processes.
Structural Design
Organization structures describe how the overall work of the organization is divided
into subunits and how these subunits are coordinated for task completion.
Organization structures should be designed to fit at least the environment,
organization size, technology and organization strategy. Organization effectiveness
depends on the extent to which its structures are responsive to these contingencies.
Organizations traditionally have structured themselves into one of the three basic
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forms, but faced with accelerating changes in competitive environments and

technologies, they increasingly have redesigned their structures into more integrative
and flexible forms.
Several basic structures dominate organizations such as:
The Functional structure
This is the most widely used Organizational structure. It is usually divided into
functional units such as marketing, operations, R&D, HRM and finance. This structure
is based on early management theories regarding specialization, line and staff
relations, span of control, authority and responsibility. The major functional units are
staffed by specialists from those functions. It is considered easier to manage
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specialists if they are grouped together under the same head and if the head of the
department has been trained and has experience in that particular function.
The Divisional structure

Fundamentally different way of organizing. Also known as a product or self-contained-
unit structure. Oriented to specific products, services, customers or regions: division
based on products. All/ most functions necessary to accomplish specific objectives are
set up as a division headed by a product or division manager. There is a functional
structure within the unit. Each manager reports to a particular division or product,
rather than to a manufacturing one. It is useful for unstable/ uncertain environments
(because each unit is designed to fit a particular niche), large size companies (to
support duplication of resources assigned to units) with technological interdependence
across functions and goals of product specialization and innovation. Large
organizations set up smaller (sometimes temporary) special purpose organizations
(each geared to a specific product/service, customer or region). Often used to expand
globally.
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The matrix structure

This structure combines the functional specialization and the self-containment: a
lateral structure that focuses on product or project coordination on a vertical functional
structure. Focusing on lateral relationships between highly specialized functions to
develop a flexible and adaptable system or resources and procedures and to achieve
project objectives. Set up in order to maximize the strengths and minimize the
weaknesses of functional and divisional structures. Every matrix organization contains
three unique and critical roles:
- Top manager (e.g. president or general manager), who heads and balances
the dual chains of command.
- The matrix bosses (functional and product or program VP), who share
subordinates.
- Two-boss managers, who report to two different matrix leaders and mange
workers deployed to the specific product or program.
Moreover, it must be reinforced by matrix performance management systems to get
input from both functional and project bosses, by matrix leadership behavior that
operates comfortably with lateral decision making, and by a matrix culture that fosters
open conflict management and a balance of power.
This structure is appropriate under three conditions (likely to fail when one of the
conditions is not met).
1. There must be outside pressures for a dual focus on unique product demands
from many customers and technical specialization/sophistication (both
functional and product orientations are important)
2. When there is pressure for high information-processing capacity (e.g., when
environmental demands change unpredictably and relevant technologies
evolve quickly) à so, there is complexity in decision making and pressure on
communication and coordination systems
3. Pressure for shared resources (e.g., when customer demands vary and
technological requirements are strict, valuable human and physical resources
are likely to be scarce)  then, matrix facilitates sharing of scarce resources.
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The Process Structure

Design subunits/multidisciplinary teams around the organizations core work
processes, such as product development, order fulfillment and customer support:
typically referred to as horizontal, team-based or boundary-less organizations. This
structure emphasizes lateral rather than vertical relationships, and it eliminates many
of both hierarchical and departmental boundaries that can impede task coordination
and slow decision making and task performance (reduce costs of managing across
departments). Only a few hierarchical levels, and the senior executive team is
relatively small, typically consisting of the CEO, COO and heads of few key support
services as strategic planning, HR and finance. All functions necessary to produce a
product or service are placed in a common unit managed by a ‘process owner’ 
division in processes. Focus most of resources on serving customers.
Features that characterize this structure:

- Processes drive structure: organized around three to five key processes that
define the work of organizations. Rather than products or functions, processes
define the structure and are governed by process owner. Each process has
clear performance goals that drive task execution;
- Work adds value: work is simplified by eliminating nonessential tasks and
reducing layers of management, and it is enriched by combining tasks so that
teams perform whole processes;
- Teams are fundamental: teams are the key organizing feature in this structure.
They manage everything from task execution to strategic planning, are self-
managing and are responsible for goal achievement;
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- Customers define performance: customer satisfaction is the primary goal of any

team. Defining customer expectations and designing team functions to meet
those expectations command much of teams’ attention. The organization must
value this orientation as the primary path to financial performance.
- Teams are rewarded for performance: appraisal focus on measuring team
performance against customer satisfaction and other goals à team- based
rewards over individual recognition;
- Teams are linked tightly to supplies and customers: teams have timely and
direct relationships with vendors and customers to understand and respond to
emerging concerns;
- Team members are well informed and trained: team members need to work
with a broad range of information, including customer and market data financial
info and personnel and policy matters. Team members also need problem-
solving and decision-making skills and abilities to address and implement
solutions.
This kind of structure is useful in unstable environments, where customer demands

and market conditions are changing rapidly, for medium to large size companies, with
no routine and highly interdependent technologies and work flows, having several
products or projects, found in both domestic and global organizations, and customer
oriented goals.
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The customer-centric structure

Focus attention and resources on specific customers or customer segments: closely
related to process-based structure. Subunits focused on the creation of solutions and
the satisfaction of key customers or customer groups. The customer or market-facing
units are supported by other units that develop new products and services,
manufacture components and products, and manage the supply chain. Those complex
structures are implemented by front-back organizations (e.g., IBM): front – customer
teams, back - support (e.g., product development and services). The customer needs
to be at the top of the organization agenda. The organization develops the best
solution for the customer by offering a customized bundle of products, services,
support and education  market-facing units organized around customers or
customer segment teams that attempt to maximize customer profit and loss. Not
product-focused, like functional and divisional structure. Globalization, e-commerce
and the desire for solutions have enhanced power of the consumer to demand
organization structures that service their needs. Most organizations have deeply
rooted assumptions in product-centric approach  difficult to change.
It is useful for highly complex and uncertain environments, large organizations (where
there are strong and powerful customer forces in the industry) with goals of customer
focus and solutions orientation with highly uncertain technologies and markets.
Organization has to have a certain amount of maturity (since they need to have strong
lateral capabilities).
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Comparing Product Centric with Customer Centric Structures
The network Structure

Link the organization to other, independent organizations: this structure manages the
diverse, complex and dynamic relationships among multiple organizations or units,
each specializing in a particular business function or task. Links separate business
units to facilitate task interaction. This redraws organizations boundaries. (E.g. a firm
that is good at selling products might outsource manufacturing to other organization
that perform that task better than they do) Network organizations use strategic
alliances, joint ventures, subsidiaries, research and development consortia, licensing
agreements to design, manufacture, and market advanced products, enter new
international markets, and develop new technologies. It is useful for highly complex
and uncertain environments (where multiple competencies and flexible resources are
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needed), companies of all sizes (who deal with complex tasks or problems involving
high interdependencies across org.), which focus on organizational specialization and
innovation with highly uncertain technologies.
Some confusion over the definition of a network can be clarified by a typology

describing the four basic types of networks:
1. Internal market network: exists when a single organization establishes each
subunit as an independent profit center that is allowed to trade in services and
resources with each other as well as with the external market à single
organization.
2. Vertical market network: composed of multiple organizations linked to a focal
organization that coordinates movement of resources from raw materials to end
consumer (e.g., Nike).
3. Intermarket network: represents alliances among a variety of organizations in
different markets/industries (e.g., media and publishing).
4. Opportunity network: most advanced network form. Temporary constellation of
organization brought together to pursue a single purpose and once
accomplished, the network disbands.
Network structures typically have the following characteristics:

- Vertical disaggregation: refers to breaking up of the organizations business
functions, such as production and marketing, into separate organizations
performing specialized work. (E.g., the film industry, there are separate
organizations for transportation, special effects, set design, music, actors etc.,
who all work under a broker organization (the studio)). The particular
organization making up the opportunity network, represent an important factor
in determining its success. Increasingly, disintermediation or the replacement
of whole steps in the value chain by information technology (specifically the
Internet), has fueled the development and numbers of network structures à
subunits can execute whole processes.
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- Brokers: networks are often managed by broker organizations that locate and
assemble member organizations. The broker or ‘process orchestrator’ plays a
central role and subcontract for needed products/services or it may specialize
in linking equal partners into a network. In the construction industry, the general
contractor typically assembles and manages drywall, mechanical, electrical,
plumbing, and other specialties to erect a building.
- Coordinating mechanisms: network organizations are not controlled by
hierarchical arrangements of plans. Coordination of work in a network falls in 3
categories:
o Informal relationships (trust, reciprocity) - interpersonal relationships and
reciprocal arrangements  parties have to make compromises in their
partnership, respect.
o (Formal) contracts (ownership control, licensing, purchase agreements
etc.)
o Market mechanisms (such as performance accountability, technology
standards, information systems to ensure that all parties are aware of
each other’s activities and can communicate).
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Two restructuring interventions: downsizing and reengineering.
Downsizing
Interventions aimed at reducing the size of the organization (+ costs and bureaucracy)
through workforce reduction, organization units’ reduction, managerial levels reduction
or organizational redesign. Not a goal in itself, but a restructuring process for achieving
strategic objectives  members need to be reminded that restructuring is part of a
plan to improve the organizational performance. Successful downsizing is closely
aligned with the organizations strategy. An important consequence of downsizing has
been the rise of the contingent work force. It is generally associated with layoffs,
reducing number of units, outsourcing, attrition (not replacing employees that leave
through retirement or resignation), delaying (reduce size of business hierarchy,
especially in management. This creates a flatter organizational structure). Downsizing
is generally a response to at least four major conditions:
1. Associated increasingly with mergers and acquisitions (e.g. integration of two
organizations) as redundant jobs are eliminated to gain labor efficiencies.
2. Result from organizational decline caused by loss of revenues and market
share and technological and industrial change (e.g., fuel oil prices and terrorism
reduced workforce in airline industry).
3. When organizations implement new organization structures (e.g. network
structure requires outsourcing of work that is not essential to organizations core
competence).
4. Result from beliefs and social pressures that smaller is better (to become more
lean and flexible), but have to be careful for symptom ‘corporate anorexia’ à
organizations may downsize for own sake and not think about future growth
(e.g. lose key employees for success, cutting in core competencies and
become mistrusted by employees).
Three downsizing Tactics
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Application stages
- Clarify the organization’s strategy (and communicate clearly how downsizing
relates to it)
- Assess downsizing options and make relevant choices: Choices can create
fear, therefore helpful to involve members in decision-making.
- Implement the changes: successful implementation is characterized by:
o top down control;
o specific areas of inefficiency and high costs need to be identified and
targeted;
o specific actions should be linked to organizations’ strategy;
o Communicate frequently using variety of media (lowers anxiety).
- Address the needs of survivors and those who leave: support employees who
remain in the organization and those who leave. Generally, those who stay are
asked to take additional responsibilities and to learn new jobs with (out)
compensation. This added workload can be stressful, and when combined with
anxiety over past layoffs and possible future ones, it can lead to ‘survivor
syndrome’ à are preoccupied with whether additional layoffs will occur, with guilt
over receiving pay and benefits while coworkers are struggling with termination,
and with the uncertainty over career advancement. These survivor concerns
can be addressed with communication processes that increase amount and
frequency of info provided→ linkage employee’s performance and strategic
success is emphasized, so that remaining members feel they are valued. Or
provide training and development activities (to prepare them for extra
workload), and involve members in decision making to reinforce message that
they are important. Also help and assist those who leave (e.g., outplacement or
family and personal counseling, severance packages, office support for job
searches, relocation services, and job retraining).
- Follow through with growth plans: implementing an organization renewal and
growth process. Organizations must ensure that employees understand the
renewed strategy and new roles in it. Employees need credible expectations
that, although the organization has been through a tough period, their renewed
efforts can move it forward. Failure to move quickly to implement growth plans
is a key determinant of ineffective downsizing.
Results of downsizing
Research on downsizing is often negative, for example lead to failure (companies
need to hire new of the same terminated employees, less increased profits and
satisfactory improvements in shareholder ROI), and consequence on individual level
(stress and illness, loss of self-esteem, reduced trust and loyalty, marriage and family
disruptions). Also negative results on financial improvement. However, research is
mostly based on:
- HR specialists (who might see downsizing in negative light)
- Downsizing alone is unlikely to improve financial performance if organization
is poorly managed.
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- Function of the way downsizing was implemented.

Success of downsizing efforts depends on the appropriateness of the OD intervention
that is chosen and applied strategies, size of the layoffs and amount of delaying.
Reengineering
Involves the fundamental rethinking and radical redesign of business processes to
achieve dramatic improvements in performance. It seeks to transform how
organizations traditionally produce and deliver goods and services. Radically
redesigns the organization core work processes to give tighter linkage and
coordination among different tasks. The shift from functional to process- based
structures and work design. It breaks down traditional ways of thinking and specializes
units in new ways of working and integrated, cross-functional processes that deliver
value to customers  this workflow integration results in streamlined work processes,
which increases efficiency with faster cycle times and better info handling capabilities
Reengineering often is accomplished with information technology that permits

employees to control and coordinate work processes more effectively.  Key to
reengineered organizations is its commitment to and development of an integrated
info system. But this is often difficult, because traditional systems do not link
departments etc.
Reengineering is associated with downsizing, since it can result in reduction and

delivery processes that require fewer people and layers of management. Conversely,
downsizing may require subsequent reengineering interventions. When downsizing
occurs without fundamental changes in how work is performed, the same tasks are
simply being performed with fewer people. Thus, expected cost savings may not be
realized because lower salaries and fewer benefits are offset by lower productivity.
Reengineering also can be linked to transformation of organization structures and

work design. Focus on work processes helps to break down vertical orientation of
functional and divisional organizations. Reengineering identifies and assesses core
business processes and redesigns work to account for key task interdependencies
running through them (results in new jobs/teams that emphasize multifunctional tasks,
result-oriented feedback and employee empowerment characteristics).
Application stages (typical reengineering process, but order may change in some
situations  early reengineering efforts emphasized identifying which business
processes to reengineer and technically assessing the work flow, but recent efforts
extended to address issues of managing change  deal with resistance, manage
transition to new work processes):
- Prepare the organization

Clarification and assessment of the organization context. Establish and
communicate the need for reengineering and the strategic direction of the
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process.  Specify the organization’s strategy and objectives (assessment

of organization context, environment, strategy, objectives.) Communicate
clearly why reengineering is necessary.
- Specify the organization’s strategy and objectives
- Fundamentally rethink the way work gets done (performed by a cross-
functional design team that is given considerable time/resources to
accomplish them).
- Identify and analyze core business processes: that are essential to strategic
success (e.g. by assigning costs to processes or assess in terms of value-
added activities. They include activities that transform inputs into valued
outputs. Typically assessed through process map that identifies the three to
five core activities.
Analysis of core business processes can include:
1. Assigning costs to each of the major phases of the workflow to help identify
costs that may be hidden in the activities of the production process 
activity based accounting systems (e.g. shows rework, errors and delays
that are sources of unnecessary costs).
2. Value-added activities - the amount of value contributed to a product/service
by a particular step in the process. Conversely, organizations often engage
in a variety of process activities that have little or no added value.
- Define performance objectives: Challenging goals are set. The highest
possible level of performance for any particular process is identified, and
dramatic goals are set for speed, quality, cost or other performance
measures. These standards can derive from customer requirements or from
benchmarks of the best practices of industry leaders.
- Design new processes: to achieve breakthrough goals. They ask
themselves the question: What is the most effective and efficient way to
deliver the product or service? Each essential process is then designed
according to several guidelines (e.g., begin and end the process with the
needs and wants of the customer; simplify the current process by combining
and eliminating steps; do not be constrained by past practice; listen to
people who do the work). An important activity in reengineering effort is
implementing early wins or quick hits (analyses of existing processes often
reveal obvious redundancies and inefficiencies for which appropriate
changes may be authorized immediately), which can help generate and
sustain momentum in the reengineering effort.
- Restructure the organization around the new business processes: Changes
the organization structure to support the new business processes (typically
results in process-based structures).
A Reengineered organization typically has the following characteristics:

- Work units change from functional departments to process teams;
- Jobs change from simple tasks to multidimensional work;
- People’s roles change from controlled to empowered;
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- Focus of performance measures and compensation shifts from activities to

results;
- Organization structures change from hierarchical to flat;
- Managers change from supervisors to coaches; executives change from
scorekeepers to leaders
The key to a reengineered organization is often its commitment to and development

of an integrated information system of the transformation of work (e.g. integrating an
electronical medical record system in nearly every step of the patient care process).
Results from reengineering

Results from reengineering vary widely. On the one hand, dramatic business
outcomes attributable to reengineering. On the other hand, 70% of the efforts failed to
meet their cost, cycle time, or productivity objectives. Overall, affects total business
unit costs positively when reengineering broad added value processes; reengineering
narrow business processes did not. Performance improvements in particular
processes were strongly associated with changes in six key levers of behavior,
including structure, skills, information-systems, roles, incentives and shared values.
Successful reengineering cases are characterized by: a clear vision of the future;
specific goals for change; use of information technology; top management’s
involvement and commitment; clear milestones and measurements; training of
participants in the process analysis and teamwork.
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Summary chapter 12:

This chapter presented interventions aimed at restructuring organizations. Several
basic structures, such as the functional, divisional, and matrix structures, dominate
most organizations. Three newer forms, process-based, customer-centric, and
network-based structures, were also described. Each of these structures has
corresponding strengths and weaknesses, and supportive conditions must be
assessed when determining which structure is an appropriate fit with the organization’s
environment, strategy, technology and size.
Two restructuring interventions were described: downsizing and reengineering.
Downsizing decreases the size of the organization through workforce reduction or
organizational redesign. It generally is associated with layoffs where a certain number
or class of organization member are no longer employed by the organization.
Downsizing can contribute to organization development by focusing on the
organization’s strategy, using a variety of downsizing tactics, addressing the needs of
all organization members, and following through with growth plans. Reengineering
involves the fundamental rethinking and radical redesign of business processes to
achieve dramatic improvements in performance. It seeks to transform how
organizations traditionally produce and deliver goods and services. A typical
reengineering project prepares the organization, rethinks the way work gets done, and
restructures the organization around the newly designed core processes.
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Chapter 13: Employee involvement

- Define the principles of employee involvement and describe its relationship to
performance.
- Compare three employee involvement interventions: parallel structures, total
quality management, and high-involvement organizations.
This chapter describes employee involvement interventions. These techno-structural

change programs are aimed at moving organization decision making downward to
improve responsiveness, performance and to increase member flexibility, commitment
and satisfaction. Employee involvement is a broad term for diverse approaches to gain
greater participation in relevant workplace decisions. It has been referred to as
empowerment, participative management, engagement, work design and high
involvement. Different approaches to employee involvement can be described by the
extent to which power, information, rewards and knowledge & skills (PIRK) are shared
with employees. Employee involvement seeks to increase members’ input into
decisions that affect organization performance and employee well-being
Faced with competitive demands for lower costs, high performance, and greater
flexibility, organizations are increasingly using employee involvement (EI) to enhance
the participation, commitment, and productivity of their members. Employee
involvement (EI) is the broad term for diverse approaches to gain greater participation
in relevant workplace decisions. OD interventions aimed at moving decision making
downward in the organization, closer to where actual work takes place. This increased
EI can lead to quicker, more responsive decisions, continuous performance
improvements, and greater employee flexibility, commitment and satisfaction.
Employee Involvement: what is it?

It seeks to increase members’ input into decisions that affect organizational
performance and employee well-being. Gain greater participation in relevant
workplace decisions. Engagement refers to an employee’s work experience à
engaged employees are motivated, committed and interested in their work.
It can be described in terms of four key elements that promote worker involvement:
1. Power: Extent to which influence and authority are pushed down into the
organization/ providing people with enough authority to make work-related
decisions.
2. Information: Extent to which relevant information is shared with members
3. Knowledge and Skills: Extent to which members have relevant skills and
knowledge and opportunities to gain them (e.g., by providing training and
development programs).
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4. Rewards: Extent to which opportunities for internal and external rewards are
tied to effectiveness
These components combine to exert powerful effects on productivity and employee

well-being. These elements (PIRK) are interdependent, thus must change together to
obtain positive results in Employee involvement. All four elements contribute to
employee involvement success by determining how much employee participation in
decision making is possible in organizations. To the extent that all four elements are
made available throughout, and especially in the lower levels of, the organization, the
greater the employee involvement.
Diffusion of EI practices
Internationally, employee involvement may be considered a set of processes directed
at changing the structure of the work situation within a particular economic and cultural
environment and under the influence of particular values and philosophies. Can be
driven by pragmatic approach to increase productivity, or driven by socialist values.
Although many organizations are using employee involvement practices, there is
considerable room for their diffusion across organizations and throughout the
workforce.
How Employee involvement affects productivity

Growing body of research found a relation between employee involvement practices
and measures as productivity, financial performance, customer satisfaction, labor
hours, and waste rates. These linkages followed the basic idea that involvement
causes job satisfaction and therefore productivity measures. However, this is too
simplistic and sometimes wrong. Employee involvement practices (such as
participation in workplace decisions) can improve productivity in three ways:
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1. They can improve communication and coordination among employees and

organization departments and help integrate different jobs or departments that
contribute to an overall task;
2. They can improve employee motivation, especially when satisfying important
personal needs: translated into improved performance when people have
necessary skills /knowledge to perform well, and technology/work situation that
allows people to affect productivity;
3. They can improve capabilities of employees: enabling them to perform better.
E.g., attempts to improve participation in decision making generally include skill
training in group problem solving and communication.
Employee intervention practices can also influence productivity by secondary effects

of increased employee well-being:
Employee involvement practices can increase employee wellbeing and satisfaction by

providing a better work environment and more fulfilling jobs.
Improved productivity can also increase satisfaction, especially when that leads to
greater rewards. Increased satisfaction, deriving from employee involvement
interventions and increased productivity, ultimately can have a greater impact on
productivity by attracting talented employees to join and remain with the organization.
An additional path for performance effects of employee involvement is organizational

citizenship behavior = OCB involves a broad set of discretionary work behaviors that
sustain and enhance the functioning of the org., such as helping coworkers, sharing
tacit task knowledge, and going beyond the call of duty to help customers. Not
prescribed by the organization but occur voluntarily at employees’ discretion. Growing
evidence that employee involvement practices promote OCB, and in turn, OCB
increases organizational performance.
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In sum: Employee involvement interventions are expected to increase productivity by

improving communication and coordination, employee motivation and individual
capabilities. They can also influence productivity by means of secondary effects of
increased wellbeing and satisfaction. But considerable debate over strength of the
association between employee involvement and productivity.
Employee Involvement Interventions

Major employee involvement interventions (that vary in the amounts of power,
information, knowledge and skills and rewards that are moved downward through the
organization):
Parallel structures:
Involving employees in resolving poorly defined complex problems and build
adaptability into bureaucratic organizations. Provide members with an alternative
setting in which to address problems and to propose innovative solutions free from the
existing, formal organization structure and culture. Parallel structures facilitate problem
solving and change, by providing time and resources for members to think, talk and
act in completely new ways. Consequently, norms and procedures in parallel
structures are entirely different from those of the formal organization, but operate in
conjunction with the formal organization. E.g., periodic offsite meetings to explore new
ways to improve quality in the work area of a temporal project.
Two most common parallel structures, both at the lower end of employee involvement,
only offering suggestions etc. Most appropriate for organizations with little or no history
of employee participation, top-down management, and bureaucratic cultures. Member
participation and influence are restricted to making proposals and offering suggestions
for change because subsequent decisions about implementing the proposals are
reserved for management. Membership also tends to be limited, primarily to volunteers
and to numbers of employees for which there are adequate resources. Management
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controls the amount of authority that members have in making recommendations, the
amount of info that is shared with them, the amount of training they receive to increase
their knowledge/skills and the amount of monetary rewards for participation.
- cooperative union management projects
- quality circle interventions
Application stages parallel structures.

Describes the steps associated with the two most common parallel structures that fall
at the lower end of the employee involvement scale:
- Define the parallel structure’s purpose and scope: and initial expectations about
how it will function.
- Form a steering committee: composed of acknowledged leaders of the various
functions within the formal organization (representatives). This committee
performs the following tasks:
o Refining the scope and purpose of the parallel structure
o Develop a vision for the effort
o Guiding the creating and implementation of the structure
o Establishing the linkage mechanisms between the parallel structure and
the formal organization.
o Creating problem solving groups and activities
o Ensuring senior management support.
ODPs can help form the committee, group norms, create vision/objectives  first, help
establish team and select members. Second, establish norms of learning and
innovation, which set the tone for problem solving throughout the parallel structure.
They can also help the committee create a vision statement that refines the structure's
purpose and promotes ownership of it. Finally, they can help committee members
develop and specify objectives and strategies, organization expectations and required
resources, and potential rewards.  Involve them in developing parallel structure to
create ownership.
- Communicate with organization members: effectiveness of parallel structures
depends on a high level of involvement from organization members.
Communicate purpose, procedures, and rewards with organization members
and promote involvement. Employee participation can increase ownership and
demonstrate new ways of working.
- Form employee problem-solving groups: appropriate hierarchical levels,
expertise, functions relevant to the problem, training needed. Forums are the
primary means of accomplishing the purpose of the parallel learning structure.
This allows the parallel structure to identify and communicate with the formal
structure. Most common forum is employee problem solving group: Its
formation involves selecting and training group members, identifying problems
for the group to work on, and providing appropriate facilitation.
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Ad hoc committees: when workers and managers initiate action to address an issue
of interest to the parallel organization. Ad hoc teams are typically charged with a
particular task and have a limited lifetime. Tasks include discussions about vision of
the parallel structure, the specific problems to be addressed, and the way those
problems will be solved.
Large group intervention is also an example of a forum  Search conferences and

appreciative inquiry (AI) summits (gathering of diverse people from organization; AI is
a model for analysis, decision-making and the creation of strategic change) are
designed to generate a variety of ideas for change, innovation, and problem solving.
Another key resource for parallel structures is facilitation support. Can yield important
benefits in problem-solving efficiency and quality. Small groups are asked to form
quickly and to solve problems by cutting through traditional hierarchical and functional
boundaries. Must be designed and facilitated well if they are to produce relevant
results. Facilitation support can help charter and build team and pay special attention
to processes that encourage productivity.
- Address the problems and issues: solve problems by using an action research
process. Facilitated when groups and steering committee relate effectively to
each other. Parallel structure groups diagnose specific problems, plan
appropriate solutions, and, if empowered to do so, implement and evaluate
them. Steering committee needs to direct problem-solving efforts, acquire
necessary resources and support, and approve action plans. This ensures that
the solutions and changes are linked appropriately to the formal organization.
- Implement and evaluate the changes: information and feedback about the
effects of changes.
Results of Parallel structure approaches.

Large body of literature, for many cases increased work satisfaction and task
effectiveness. Mixed results for attitudinal changes, but a stronger relationship
between employee participation and direct performance outcomes, such as:
productivity, quality and speed, customer satisfaction, profitability, and employee
satisfaction.
Court rulings in 1990s challenged the legality of some employee involvement

approaches, because management creates a team and might dominate labor
organizations. For many people, especially lower-level employees, this opportunity to
influence the formal organization leads to increased work satisfaction and task
effectiveness.
In early research almost no support for relationship employee participation and

productivity, but more recent research has found stronger effects. It found that
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systematically implemented programs often improve productivity and almost always

increase investment in employee skills and knowledge.
Total quality management: emphasis on continuous quality improvement. A more

comprehensive approach to employee involvement than parallel structures are. Also
seen as lean or continuous process improvement, six-sigma. Traditionally, focus on
quantity over quality. Total Quality Management grew out of manufacturing emphasis
on quality control and represents a long-term effort to orient all of organizations
activities around quality. Total Quality Management can be implemented without
employee involvement, but employee involvement in change process increases the
likelihood of sustaining the results. Today, continuous quality improvement capability
is essential in global competitiveness. It increases workers’ knowledge and skills
through training, provides relevant information, pushes decision-making power
downward in organizations and ties rewards to performance. Quality is achieved when
organization processes reliably produce products and services meet or exceed
customer expectations. When implemented, it has to be successfully aligned with the
firm’s overall business strategy and attempts to direct the entire organization towards
continuous quality improvement. Also quality awards for organizations that achieve
quality/that are highly efficient. They provide greater opportunities for involvement than
parallel structures.
Examples:
- ‘plan-do-check-adjust’ approach: to identify and improve manufacturing
processes that affect product quality.
- Deming’s quality guidelines and seven deadly sins of quality.
- Quality control handbook: two sources of quality problems:
o Unavoidable
o Avoidable costs.
Avoidable costs included hours spent reworking defective products, processing
complaints, and scrapping otherwise useful materials. Unavoidable costs included
work associated with inspection and other preventive measures. Suggested that when
org. focused on unavoidable costs to main quality, an important opportunity was being
missed, and advocates that an organization focus on avoidable costs that could be
found in any process or activity, not just in manufacturing.  Improved quality can
lower overall costs, dispelling the popular belief that high quality means higher total
costs for the organization. With fewer parts reworked, less material wasted and less
time spent inspecting, finished goods, the organization's total costs actually can
decline. Total Quality Management is growing industry, with consulting firms,
university courses, training programs, and professional associations related to quality
improvement diffusing rapidly across industrialized nations.
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Total quality management application stages:

These steps can occur simultaneously, except for the first step:
- Gain long-term senior management commitment: Managers often belief that

workers are solely responsible for quality, thus help senior executives
understand importance of long-term commitment to total quality management.
Senior managers’ role in total quality management implementation is giving
direction and support throughout the change process (e.g., new orientation,
finance, resources). Only senior executives have the authority and larger
perspective to address the organization-wide, cross-functional issues that hold
the greatest promise for total quality management’s success.  Thus, long-
term commitment is needed. Senior managers need to clarify and communicate
throughout the organization a totally new orientation to producing and delivering
products/services. Also need to confront the more difficult parts of
implementation in the organization support systems (e.g. finance, customer
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service) that are frozen in place by old policies, and create new ones that
support total quality management.
- Train members in quality methods: Total Quality Management implementation
requires extensive training in principles and tools of quality improvement (e.g.,
problem solving techniques, Statistical Process Control techniques, and
training for internal consultant - specialized in Total Quality Management; green
and black belt roles) to guide project members through program of process
improvement. Statistical Process Control techniques: used to understand
variations in organizational processes, to identify sources of avoidable costs, to
select and prioritize quality improvement projects, and to monitor the effects of
changes on product and service quality.
Green and black belt roles: internal consultants with specialized knowledge, skills, and
experience in Total Quality Management methods that guide project team members
through a specific program of process improvement.
- Start quality improvement projects: Identifying output variations is a key aspect

of Total Quality Management. Individuals and work groups apply the quality
methods to identify few projects that hold promise for largest improvements in
organizational processes. Repeat quality improvement cycle indefinitely
(identify - intervene to minimize deviations from quality standards - monitor
improvement). Groups analyze causes of variations statistically. Identify output
variations (in the quality of finished products/service - deviations from quality
standards; deviations in the steps of a process) is a key aspect of Total Quality
Management. Then, determine which of the possible causes is most
responsible, and, using that info, run experiments and pilot programs to
determine which adjustments will cause the variations to drop and quality to
improve. The quality process is constantly monitored to verify improvement and
begin the problem solving process again for continuous improvement.
- Measure progress: Against quality standards. The implied goal is to meet or
exceed a competitor’s benchmark. Knowing and analyzing competition’s
performance is essential for Total Quality Management to set minimum
standards and ensure organizations position in industry. Short term, it sets
minimum standards of quality, cost and service and ensures the organization's
position in the industry. Long term, such analytical efforts concentrate on
identifying world-class performance, regardless of industry, and creating stretch
targets, also known as benchmarks (the best in organization achievements and
practices for different processes and generally are accepted as world class) 
Disney is world class in customer service. Understanding benchmarks from
other industries challenges an organizational thinking about what is possible
and promotes what is referred to as out of the box thinking. Thus, innovative
ideas come from benchmarking or out-of-the-box thinking.
- Rewarding accomplishment: Links rewards to quality improvements. Total
Quality Management rewards members for process-oriented improvements,
such as increased on-time delivery, customer satisfaction, and reduction in
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cycle time. Rewards are usually designed initially to promote finding solutions
to organizational key problems. Linking rewards and process-oriented
improvements reinforces the belief that continuous improvements are important
in the new organization culture. Total Quality Management does not monitor
and reward outcomes that are normally tracked by traditional rewards systems,
such as the number of units produced. Such measures do not necessarily
reflect product quality and can be difficult to replace because they are ingrained
in the organization's traditional way of doing business. (More process-oriented
improvements)
Results of Total Quality Management

There are variations in how it is applied across organizations. About 75% of Fortune
500 implemented a form of Total Quality Management. Total Quality Management is
positively associated with performance outcomes, (e.g. productivity, customer service,
product/service quality, profitability, and human outcomes (quality of work life, and
employee satisfaction)).
Much evidence is anecdotal though. Lean manufacturing is an example of Total

Quality Management: seeks to identify and eliminate wastes and inefficiencies from
production process. Shown that as organizations enact process improvements, they
may need to make supporting changes in reward systems and work design. The
source of performance advantage in Total Quality Management lies in the culture,
empowerment and commitment that comes from successful implementation à
organizations that acquire those tacit resources, and not just Total Quality
Management tools and techniques, can outperform competitors without the
accompanying Total Quality Management ideology.
High-involvement Organizations
Aimed at stimulating the participation of employees. Create organizational conditions
that support high level of employee participation. Unlike parallel structures that do not
alter the formal organization or Total Quality Management interventions that tend to
focus on particular processes, High Involvement Organizations have a comprehensive
nature of design process and address almost all features of an organizational design.
Structure, work design, info and control systems, physical layout, personnel policies
and reward systems are designed jointly by management and workers to promote high
levels of involvement and performance.
Features of High involvement organizations

High involvement organizations are designed with features congruent with one
another. E.g., in High involvement organizations employees have influence over
decisions. To support such decentralized philosophy, members receive extensive
training in problem-solving techniques, plant operation, and policies. In addition, both
operational and issue- oriented information is shared widely and is obtained easily by
employees. Finally, rewards are tied closely to unit performance, as well as knowledge
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and skill levels. These aspects are mutually reinforcing and form a coherent pattern
that contributes to employee involvement.
- Flat, lean organization structures: contribute to involvement by pushing the

scheduling, planning and controlling functions typically performed by
management towards the shop floor. Similarly, mini-enterprise, team-based
structures oriented to a common purpose or outcome, help focus employee
participation on a shared objective. Participative structures (e.g., work councils)
create conditions in which workers can influence direction and policy. The aims
of the mini-enterprise are to gain a sense of understanding for the roles of
different people working in business, to consider the challenges, demands and
constraints involved when trying to run a business and to work effectively in a
team to product a quality end product.
- Enriched job designs: that provide employees with high levels of discretion, task
variety, and meaningful feedback can enhance involvement. Self-managed
teams encourage employee responsibility by providing cross-training and job
rotation (learn about different functions). Job design enables workers to
influence day to day workplace decisions and to receive intrinsic satisfaction by
performing under enriched conditions
- Open information systems: that are tied to jobs or work teams provide
necessary information for employees to participate meaningfully in decision
making. Set goals and standards participative, to create commitment and
motivation for achieving those goals.
- Sophisticated selection systems: of employees for High involvement
organizations through realistic job preview. Team member involvement in
selection process oriented to potential and process skills of recruits.
- Sophisticated career systems: that provide different tracks for advancement
and counseling to help people choose appropriate paths, can help employees
plan/prepare long- term development in organization
- Extensive training programs: skills and knowledge for employees to participate
effectively in decision making. Education, as well as interpersonal skill
development. Peer training is emphasized as a valuable adjunct to formal,
expert training.
- Advanced reward systems: contribute to employee involvement, when
information about them is open and rewards are based on acquiring new skills,
improve performance etc. Participation is enhanced when people can choose
among different benefits and when reward distinctions among people from
different hierarchical levels are minimized.
- Participatively designed personnel practices: encourage stability of
employment and provide employees with a strong sense of commitment to the
organization. People need to feel that the policies are reasonable and that the
firm is committed to their long term development.
- Conducive physical layouts: physical designs that support team structures and
reduce status differences among employees can reinforce egalitarian climate
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needed for participation. Safe and pleasant working conditions provide a

physical environment conducive to participation.
These features/conditions all send the message to people that they are important,
respected, valued, capable of growing and trusted and that their understanding of and
involvement in the organization is desirable and expected. Moreover, these design
features tend to motivate and focus organizational behavior in a strategic direction,
and thus can lead to superior effectiveness and competitive advantage.
High Involvement Application factors

No universally accepted approach to implement the features; it is specific to the
situation. Characterizations/distinct factors of how high involvement organizations are
implemented:
- An explicit statement of values, strongly held and widely shared by
organization members, guides implementation. Provide energy,
commitment and direction.
- Implementation is participative with managers and employees taking active
roles in choosing and implementing the design features. Helped by ODP,
but locus of control within the organization
Results of High Involvement Organizations

Generally, positive results. Support for high- involvement model: better performance
on quality of work life, customer service, productivity, quality and grievance rates, and
sales per employee.
Also positive human effects: enhanced well-being, as measured by job satisfaction,

fatigue, and job stress. Warning: the positive human effects might not be realized if
High involvement organization interventions lead to work intensification with greater
pressures to work harder and longer. Often used in combination with other employee
involvement interventions.
Levels of high involvement adoption

1. Managers use top-down approach, and emphasize direction of the workforce;
2. Managers use top-down approach, but employees are asked to provide input
concerning business issues that are outside their immediate assignments;
3. Managers use participative approach that engages employees in thinking
through options, recommending actions, and assessing accomplishment. But
managers take decisions eventually;
4. Managers delegates decision-making authority to work teams that are
empowered to manage their assigned goals and are involved in every aspect
of business management and operations;
5. Management defines itself as partners with employees on one team dedicated
to defining and achieving business goals.
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Summary chapter 13:

This chapter described employee involvement interventions. These technostructural
change programs are aimed at moving organization decision making downward to
improve responsiveness and performance and to increase member flexibility,
commitment, and satisfaction. Different approaches to EI can be described by the
extent to which power, information, knowledge and skills, and rewards are shared with
employees.
The relationship between EI and productivity can be oversimplified. Productivity
can be increased through improved employee communication, motivation, and skills
and abilities. It also can be affected through increased worker satisfaction, which in
turn results in productive employees joining and remaining with the organization.
Major EI interventions are parallel structures, including cooperative union-
management projects and quality circles, TQM, and high-involvement organizations.
The results of these approaches generally are positive, and the quality of research
supporting these interventions is increasing.
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Chapter 14: Work design

- Describe the engineering approach to work design.
- Explore and evaluate the motivational approach to work design.
- Discuss and apply the principles of socio-technical systems work design.
- Learn how to design work to meet technical and personal needs.
Work design = creating jobs and work groups that generate high levels of employee
fulfillment and productivity. A techno-structural intervention that can be a part of a
larger employee involvement program or it can be an independent change program
on its own.
Significant job restructuring

Recently, organizations combine work design with formal structure, supporting
changes in goal setting, reward systems, work environment, and other performance
management practices
Three approaches to work design:

The engineering Approach: Traditional jobs and groups
a. High specification and routinization
b. Low task variety and autonomy
The oldest and most prevalent approach to designing work. It is less an organization
development intervention than a benchmark in history.  The most efficient work
designs can be determined by clearly specifying the tasks to be performed, the work
methods to be used, and the workflow among individuals. (Based on Taylorism). It
discovers those procedures that produce maximum output, but minimum input of
energies and resources (gives high level of specialization and specification).
Benefits:
- Allow workers to learn tasks rapidly
- Permit short work cycles, so performance can take place with little or no mental
effort
- Low selection and training costs (low-skilled people - low wages)
- Efficiency can be measured readily
- Easily implemented and managed
- High productivity and high levels of control.
Produces two types of work design:

1. Traditional jobs (1 person): simplified with routine and repetitive tasks, having
clear specifications concerning time and motions. (e.g., call center operators).
Traditional jobs achieve high productivity and worker satisfaction in situations
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characterized by low technical uncertainty and interdependence and low growth

and social needs.
2. Traditional work groups (coordination among people): members perform

relatively routine, yet related tasks. Group task is broken into simpler, discrete
parts. Member interactions are controlled externally, usually through
supervisors, schedules and rigid workflows (e.g. on assembly lines).
Critics:
- Ignores workers’ social and psychological needs (suggest more enriched jobs)
- Work designed with employee in mind is more humanly fulfilling.
- Current competitive climate requires more committed and involved workforce.
The rising educational level of the workforce and the substitution of automation
for menial labor tasks point to the need for more enriched forms of work in which
people have greater discretion and are more challenged.
The Motivational Approach: Enriched jobs

- High task variety and autonomy
- Feedback of results
The effectiveness of organizational activities is primarily a function of member needs

and satisfaction, and seeks to improve employee performance and satisfaction by
enriching jobs. Opportunities for:
- Autonomy
- Responsibility
- Closure (doing a complete job)
- Performance feedback.
Job enrichment involves designing jobs with high levels of meaning, discretion, and
knowledge of results.
Motivational approach is usually associated with Herzberg two factor theory of

motivation: certain attributes of work (meaningfulness, responsibility and recognition)
serve as motivators to increase job-satisfaction and performance, while other
attributes (hygiene factors - e.g., company policies, working conditions, pay,
supervision) do not motivate people, but rather prevent them from being dissatisfied
with work (validity of the two factors has been challenged based on the way Herzberg
measured them).
Furthermore, important worker characteristics that affect how people will receive job
enrichment were not included in the theory. Finally, Herzberg failed to involve
employees in the job enrichment process itself, which does not suit most OD practices
today.  More scientifically acceptable theory of job enrichment comes from Hackman
and Oldham.
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The core dimensions of jobs

New approach by Hackman and Oldham: model of job design. Five core dimensions
of work affect three critical psychological states, which in turn produce personal and
job outcomes. These outcomes include high internal work motivation, high quality work
performance, satisfaction with the work, and low absenteeism and turnover.
- Skill Variety: extent to which multiple skills are used. (e.g., job rotation is a form
of enrichment including this factor > moving person from one job to another)
- Task Identity: extent to which an individual works on a “whole” task (‘closure’,
e.g. produces total product)
- Task Significance: impact of the work on others
Experienced meaningfulness is an average of the three dimensions. Thus, although it

is advantageous to have high amounts of all three, a strong emphasis on any of the
three can make up for deficiencies in the other two.
* Example: job enlargement as form of enrichment combines increases in skill variety

with task identity - blends several narrow jobs into one larger, expanded job. The
higher these factors, the higher the experienced meaningfulness of work.
- Autonomy: amount of discretion, independence and freedom in the work (high

autonomy will make the employee experience responsibility for the outcomes)
- Feedback from the Work Itself: extent to which work provides information on
effectiveness
Individual differences
Not all people react similar to job enrichment interventions. Individual differences, e.g.,
knowledge and skill levels, growth needs, strength, and satisfaction with contextual
factors, moderate the relationship among core dimensions, psychological states and
outcomes.
For example, if worker lacks appropriate skills, skill variety will not improve
meaningfulness; lack of intrinsic motivation to grow/develop might resist increased
autonomy; unhappy with work context may not enrich the work successfully (work
context = e.g., reward systems, supervisory style and coworker satisfaction). When
the employee is unhappy with the contextual factors, attempts to enrich the work itself
may not be successful.
Job Enrichment Application stages

- Perform a thorough diagnosis: Before implementing changes. Most popular
method for diagnosing is Job Diagnostic Survey, of which an important outcome
is the Motivating Potential Score (function of experienced autonomy,
meaningfulness, and feedback). Survey is used to profile jobs (e.g., determine
motivation and satisfaction; will people accept change?) and isolate specific job
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aspects that cause difficulties. If there is high dissatisfaction with one or more
of these areas, other interventions might be more helpful prior to work redesign.
- Form natural work units: Interrelated task activities should be grouped together.
Basic question is how to increase ownership of the task à ensure accountability
and make team members responsible for completing work. Forming natural
units increases task identity and task significance; contributing to
meaningfulness of work.
- Combine tasks: Increases task identity and allows a worker to use a greater
variety of skills (e.g. self-inspection; leading to greater task significance,
autonomy and feedback from the job (internal satisfaction).
- Establish client relationships: When jobs are split up, the typical worker has little
or no contact with, or knowledge of, the ultimate user of the product.
Establishing relationships may increase feedback, skill variety, and probably
autonomy.
Steps to create client relationship:
- identify client
- (direct) contact between worker and client
- Criteria and procedures by which client can judge quality of product
and give feedback.
Because of the need to develop interpersonal skills in maintaining the client
relationship, skill variety may increase. If the worker is given personal responsibility for
deciding how to manage relationships with clients, autonomy is increased.
- Vertical loading: The intent of vertical loading is to decrease the gap between
doing the job and controlling the job. May be most crucial of job- design
principles. Loss of vertical loading usually occurs when someone made a
mistake (and supervisor steps in). A vertically loaded job has responsibilities
and controls that formerly were reserved for management. Leads to greater
feelings of personal accountability and responsibility for the work outcomes.
- Opening feedback channels: Help people learn whether their performance is
constant, improving or deteriorating. Direct, immediate feedback has a
motivating impact. The most advantageous feedback occurs when a worker
learns about performance as the job is performed  providing performance
info.
Barriers to Job Enrichment

Most of these barriers exist in the organizational context within which the job design is
executed. Other organizational systems and practices, whether technical, managerial
or personnel, can affect both the implementation of job enrichment and the lifespan of
whatever changes are made.
Four organizational systems can constrain the implementation of job enrichment:

1. The technical system: Technology can limit enrichment by constraining the
number of ways jobs can be changed. When technology leads to high
standardization, employee discretion, autonomy is limited. And some types of
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work (continuous-process production systems) naturally enrich jobs (no need

for intervention program).
Enrichment ceiling = some types of work may be naturally enriched so there is little
more that can be gained from an intervention.
2. The Human resource system: Limiting by creating formalized, rigid job
descriptions that constrain flexibility in changing people’s job duties 
renegotiation between management and unions is needed first, before job can
be enriched).
3. The control system: Budgets, production reports and accounting practices can
limit the complexity and challenge of jobs within the system (e.g., strict quality
control procedures - low discretion).
4. The supervisory system: the supervisor determines the amount of feedback and
autonomy that subordinates experience. To the extent that supervisors use
autocratic methods and control work-related feedback, jobs will be difficult to
enrich.
Once these constraints have been overcome, other factors determine whether the
effects of job enrichment are strong and lasting. Consistent with the contingency
approach to OD, the staying power of job enrichment depends largely on how well it
fits and is supported by other organizational practices (e.g. training, supervision and
compensation). These need to be congruent with reinforcing job discretion, skill
variety, and feedback.
Results of Job Enrichment

Research JDS:
- Employees whose jobs were high on core dimensions were more satisfied and
motivated.
- Core dimensions also relate to absenteeism and performance (not a strong
relationship).
- Responses were more positive for people with high growth needs.
- Enriched jobs strongly correlated with mental ability.
- Enriching jobs of workers with low growth needs or with low knowledge and
skills is more likely to produce frustration than satisfaction.
Now also extensions on JDS:

- Supported the relationships between job characteristics and outcomes,
including moderating effects of growth needs, knowledge and skills, and context
satisfaction.
- However, also modest support for overall model of Hackman and Oldham.
Enriched jobs achieve good results when the technology is uncertain but does not
require high levels of coordination and when employees have high growth needs and
low social needs.
The Socio-technical Systems Approach: Self managing teams

- Control over total task
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- Multi-skilled, flexible, and self-regulating
Sociotechnical systems (STS) theory is based on two basic ideas:
1. An organization or work unit is a combined, social-plus-technical system

(sociotechnical). So there is a social part that includes people that have
relationships and perform tasks and the technical part that includes tools
techniques and methods for task performance. They are independent, but
related. The key issue is how to design the relationship between the two parts
so that both outcomes are positive (referred to as joint optimization) - produce
high levels of both product and human satisfaction. Contrast with engineering
(solely focus on technical component) and motivation approach (solely focus
on human fulfillment).
2. The system is open in relation to their environment and must interact with their
environments to survive and develop. Open system= environment provides
STS with inputs of energy, raw materials and info, while STS provides
environment with products/services). The system must effectively manage the
boundary separating and relate them to the environment. Environment
interaction is needed to survive and develop, while protecting themselves from
external disruptions.  Key issue is how to design the interface between the
STS and its environment so that the system has sufficient freedom to function
while exchanging effectively with the environment.
STS practitioners must structure environmental relationships to protect the system

from external disruptions and to facilitate the exchange of necessary resources and
info. This enables the STS to adapt to changing conditions and to influence the
environment in favorable directions.
Socio-technical systems diagnosis

- Define the Work System
- Conduct an Environmental Analysis
- Conduct a Technical Analysis
- Conduct a Social Analysis
In summary, STS theory suggests that effective work systems jointly optimize the
relationship between their social and technical parts. Moreover, such systems
effectively manage the boundary separating and relating them to the environment.
Thus, goals are joint optimization and boundary management.
● Can work system be designed to better with the environment?
● Can work system be designed to better operate conversion process and control
variances?
● Can work system be designed to better satisfy members’ needs?
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Self-managed work teams

Self-managed work teams is the most prevalent application of STS
Also called self-regulating, self-directed, high-performance work teams. Those work
designs are composed of members performing interrelated tasks. Members are given
the multiple skills, autonomy and information necessary to control their own task
behavior and make decisions about task assignments/work methods with relatively
little external control. They are typically responsible for a complete product or service,
or major part of larger processes. Team sets own production goals within broader
organizational guides and may be responsible for support services, such as
maintenance, purchasing and quality control. Team members are generally expected
to learn many, if not all of the jobs within the team’s control. Team rather than individual
performance as the standard.
Many Organization Development Practitioners argue that self- managed teams
represent the work of the 2000’s because high levels of technical uncertainty and
interdependence characterize today’s workplaces and because today’s workers often
have high growth and social needs.
Model of self-managed work teams:

Team performance and member satisfaction follow directly from how well the team
functions: how well members communicate and coordinate with each other, resolve
conflicts and problems, and make and implement task-relevant decisions. Team
functioning is influenced by team task design, team process interventions, and
organization support systems. These three inputs affect how well team’s function and
perform, therefore they are key intervention targets for designing and implementing
self-managed work teams:
1. Team task design: self-managed work teams are responsible for performing
particular tasks; consequently, how the team is designed for task performance
can have a powerful influence on how well it functions. Typically task design
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follows from team’s mission and goals (direction of the team - purpose). When
a team's mission and goals are closely aligned with business strategy and
objectives, members can see how team performance contributes to
organizational success  increases energy and commitment to goals. Team
task design links members’ behaviors to task requirements and to each other.
It structures member interactions and performances. Three task design
elements are necessary for creating self-managed work teams:
a. Task differentiation: extent to which team task is autonomous and forms
a relatively self-completing whole  high differentiation leads to high
team responsibility.
b. Boundary control: extent to which team members influence transactions
with their task environment (types and rates of inputs and outputs).
Adequate boundary control includes:
i. Group responsibility for boundary control decisions (e.g., quality
assurance, which reduces dependence on external boundary
regulators (inspector).
ii. Well defined work area
iii. Members sufficiently trained to perform tasks without relying
heavily on external resources  Makes members flexible and
adaptable to changing conditions. Also reduces the need for
costly overhead because members can perform many of the tasks
typically assigned to staff experts (e.g., quality control, planning)
c. Task control: degree to which team members can regulate their own
behavior to provide services or to produce finished products. (E.g.,
freedom to choose methods, schedule activities, and how to influence
goals to match environmental and task demands, power & authority to
manage equipment, materials and other resources needed for task
performance).  Essential if members are to take responsibility for
getting the work accomplished.
Task control also requires that the team needs accurate and timely information about
team performance to enable the team members to detect problems and make
adjustments  enables to observe and control technical variances (deviations from
specific goals/standards, abnormalities in work flow) as quickly and as close to their
source as possible. Also reduces the amount of staff overhead needed, since teams
have the freedom, skills and information needed to control technical variances online
and can timely respond to production problems.
So:
- Whole and interdependent tasks
- Common mission and goals
- Requisite multi-skills
- Task and boundary control
- Feedback of results
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- Minimum specification design

- Develop from narrow to broad boundaries for discretion
2. Team process interventions: can resolve problems by helping members

address process problems (e.g., poor communication, dysfunctional
roles/norms, decision making) and moving the team to more mature stage of
development. Because self-managed teams are self-reliant, members often
acquire own team process skills by training or on the job. ODP occasionally
comes in when problems cannot be resolved. Members generally acquire own
team process skills by attending appropriate training programs/workshops or
learn on the job by working with Organization Development Practitioners to
conduct process interventions on their own team.
So:
- Promoting healthy interpersonal relationships
- Coordinating efforts
- Weighting member inputs and sharing knowledge
- Making good decisions
- Confronting and resolving conflicts
3. Organization support systems: the extent to which the larger organization is

designed to support self-managed work teams. An organic structure with
flexibility among units, relatively few formal rules/procedures and decentralized
authority, is likely to support and enhance teamwork and development and
responsible self-management. A particular important support system for self-
management work teams is the external leadership: with the role of working
with and developing team members, and assisting the team in managing its
boundaries. Working with and developing team members is a difficult process
and requires a different style of managing than in traditional systems. Team
leader (team facilitator) helps team members organize themselves in a way that
allows them to become independent and responsible. Team leader must be
familiar with team building approaches and assist members in learning the skills
to perform their jobs. Also help to manage team boundaries à act as buffer to
reduce environmental uncertainty (mediating and negotiating with other
organization units).
Thus, leaders need considerable knowledge and skills of socio-technical principles

and group dynamics, understand task environment and team’s technology, ability to
intervene, to counsel and facilitate communication. Experienced problems of
managers trying to fulfil the complex demands of leading self-managed teams are:
- Ambiguity about responsibilities and authority
- Lack of personal and technical skills and organization support
- Insufficient attention from higher management
- Feelings of frustration in supervisory job.
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Attempts to overcome these problems have been made in the following areas:
1. Recruitment and selection: select leaders with balanced mixture of
technical/social skills.
2. Training: extensive formal and on the job training in human relations, group
dynamics and leadership styles  aimed at giving leaders concepts for
understanding their roles and experience in human process interventions.
3. Evaluation and reward systems: the leader’s rewards to achievements in team
development. Team leaders set measurable benchmarks for progress.
Performance appraisals of leaders are conducted within a group format, with
feedback supplied by team members, peers and higher-level management.
4. Leadership support systems: encourage leader to develop peer support group
(share of thoughts). Team leaders can meet offsite to share experiences and
to address issues of personal and general concern.
5. Use of freed-up time: provide leaders with a mixture of strategies to apply their
talents beyond the immediate work team. A leader has more time when the
team has been matured and taken on many managerial functions. In those
cases, team leaders have been encouraged to become involved in such areas
as higher-level planning and budgeting, company-wide training and
development, and individual career development.
Self-managed work teams Application stages

STS designs implemented in variety of settings need specific implementation
strategies that are tailored to the situation. A common method of change underlies
many applications and generally involves higher worker participation in work design
and implementation. Such participative work designs allow employees to translate
their special knowledge of the work situation into relevant designs. Employees with
ownership over design process are likely to be committed to the outcomes.
- Sanction the design effort: Workers receive protection and support to diagnose
their work system and create appropriate work design / explore new ways of
working. (E.g., top management and union officials jointly agree to temporarily
suspend the existing work rules and job classifications, so that employees have
the freedom to explore new ways of working.
o Normal production demands may be reduced.
o Job and wage security, so that workers feel free to try new designs
without fear of losing job or money.
- Diagnose the work system: Analyzing the work system to discover how it is
operating, which is the basis for creating new design (analyze systems
technical and social parts, and assess how they fit). Get knowledge of existing
operations (or intended ones)  use diagnostic models. Also analyze the task
environment to see how well it is meeting external demands, such as customer
quality requirements.
- Generate appropriate designs: Based on the diagnosis, the work system is
redesigned to fit the situation.
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Two STS principles guide the design process:

1. Compatibility (the process of designing work should fit the values and objectives
underlying the STS approach (joint optimization and boundary management).
How well the compatibility guideline is adhered to, can determine how well the
work design subsequently is implemented.
2. Minimum critical specification (STS designers should specify only those critical
features needed to implement the work design). Minimal critical specification
identifies what has to be done, not how it will be accomplished. This allows
employees to choose work methods, task allocations and job assignments to
match changing conditions. Output of this step specifies the new work design.
In case of self-managed teams, this includes team’s mission and goals, ideal
work flow, skills/knowledge of members, a plan for training members to meet
those requirements, and a list of the decisions the team will make now as well
as the ones it should make over time as members develop greater skills and
knowledge.
- Specify support systems: organization support systems may need to be

changed to support the new design. (E.g., when self-managed teams are
designed, the basis for pay and measurement systems may need to change
from individual to team performance to facilitate necessary task interaction
among workers).
- Implement and evaluate the work design: Making necessary changes to
implement the work design and evaluating results. For self-managing teams
this requires often much training for workers to gain necessary technical and
social skills. Evaluation is necessary to guide the implementation process and
to assess overall effectiveness of the design. Also may entail developing the
team through various team-building and process- consultation activities, and
training to perform multiple tasks and control task behaviors. Organization
Development Practitioners help team members carry out these tasks and gain
competence in this area.
- Continual change and improvement: STS designing is never complete, it
continues as new things are learned and new conditions are encountered.
Members need the ability to design and redesign work (modify work continually
to fit changing conditions and make improvements). Thus, STS designing rarely
results in a stable work design but instead provides a process for modifying
work continually to fit changing conditions and to make performance
improvements.
Results of self-managed teams

Extensive research, mostly show favorable results of self-managing teams, such as
productivity, costs (economic gains), quality improvement, job satisfaction, improved
attitudes, growth need satisfaction, social needs satisfaction, group satisfaction,
reduction in employee turnover and absenteeism rates.
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However, mixed results were also found: self-managed groups have no effect on job
motivation, work performance, organizational commitment, mental health and
voluntary turnover, and they create a threat for personal control and autonomy of
individual employees.
Major benefits are economic, deriving from need for less supervision. Changes in other
organization components may be needed to support the teams. Only when other
organization features, such as reward systems, info systems and performance
appraisal systems, changed simultaneously, was the probability of positive results
increased.
Other finding suggests that the team or coordination aspect of self-managed teams
may contribute more to performance than the self- control part. Drawback: group
leaders can focus on the concerns of younger, inexperienced employees and ignore
older workers' requests. Then, older employees feel that the groups undermined their
individual discretion autonomy and initiative. Thus, individual member's autonomy and
motivation can be constrained.
Designing Work for Technical and Personal needs

Tradeoffs and conflicts among approaches:
- Engineering approach: produces traditional jobs and work groups and focuses
on efficient performance. It downplays employee needs and emphasizes
economic outcomes.
- Motivational approach: designs jobs that are stimulating and demanding and
highlights the importance of employee need satisfaction. However, increased
satisfaction may not generate improvements in productivity.
- STS approach: integrates social and technical aspects, but may not be practical
in all situations.
The three approaches can be integrated by providing a contingency framework based
on personal and technical factors in the workplace that suggests that any of the
approaches can be effective when applied in the appropriate circumstances. Achieving
employee satisfaction and productivity depends on designing work to match specific
factors operating in the work setting, factors that involve the technology for producing
goods and services, and the personal needs of employees. When work is designed to
fit all of these factors, it is both humanly satisfying and productive. The technical and
personal factors affecting work design success, provide a contingency framework for
choosing among the four different kinds of work designs discussed:
- traditional jobs
- traditional work groups
- enriched jobs
- self-managed teams
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Technical factors
Technical interdependence
The extent to which cooperation among workers is required to produce a
product/service. In general, the degree of interdependence determines whether work
should be designed for individual jobs or work groups (low and little need for
cooperation - individual job/ high and cooperation needed - groups).
Technical uncertainty
The amount of information processing and decision-making among workers is
necessary to do the work. It determines whether work should be designed for external
forms of control (e.g., supervision, scheduling or standardization) or worker self-
control. When technical uncertainty is low and little information has to be processed,
work can be designed for external control (repetitive work forms)/ if technical
uncertainty is high and more information needs to be processed and decisions have
to be made, then work can be designed for self-control.
Recently, the nature of interdependence and uncertainty is likely to change, as work

becomes more knowledge intense, info driven and service oriented. Two emergent
perspectives that can help to extend work design to account for these changes in
technology:
- Relational perspective: embeds work design in a social context and expands

technical interdependence to include interactions across organizations’
different forms of interdependence, and different methods for managing it.
- Proactive perspective: grounds work design in opportunities for personal
autonomy and initiative in change work design. It expands uncertainty to include
conditions that stimulate employees to proactively alter work design to meet
changing conditions.
Personal needs factor
Social needs
The desire for significant social relationships. In general, degree of social needs
determines whether work should be designed for individual jobs or work groups.
People with low needs are likely to be more satisfied with individualized jobs and vice
versa.
Growth needs
The desire for personal accomplishment, learning and development. It determines
whether work designs should be routine and repetitive or complex and challenging.
People with low growth needs generally are not attracted to enriched jobs.
Often difficult for Organization development practitioners to accept low social and
growth needs (since those are values of OD).
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People can change their needs through personal growth and experience. Organization
development practitioners must be sensitive to individual differences and careful not
to force their own values on others. Many consultants, eager to be seen on the cutting
edge of practice, recommend self-managed teams in all situations, without attention
for personal considerations.
Meeting both Technical and personal needs

Likely to only occur in limited circumstances. When technical conditions are
compatible with personal needs, the work designs satisfy both. When incompatible
(e.g., when organization has quadrant 1 technology (low interdependence and high
uncertainty) and quadrant 4 worker needs (high social needs and low growth needs) -
there are two strategies to design work that satisfies both technical and human
requirements:
1. Change technology or people to bring them more into line with each other.
2. Leave the two components unchanged and create compromise work designs
that only partially fulfill the demands of either component.
The key issue is to decide to what extent one contingency will be satisfied at the
expense of the other. Careful assessment of those contingencies and of the cost-
benefit tradeoffs is necessary.
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Summary chapter 14:
In this chapter, we discussed three different approaches to work design and described
a contingency framework to determine the approach most likely to result in high
productivity and worker satisfaction. The contingency framework reconciles the
strengths and weaknesses of each approach. The engineering approach produces
traditional jobs and traditional work groups. Traditional jobs are highly simplified and
involve routine and repetitive forms of work, rather than coordination among people to
produce a product or service. Traditional jobs achieve high productivity and worker
satisfaction in situations characterized by low technical uncertainty and
interdependence and low growth and social needs.
Traditional work groups are composed of members who perform routine yet
interrelated tasks. Member interactions are controlled externally, usually supervisors,
schedules, and rigid work flows. Traditional work groups are best suited to conditions
of low technical uncertainty but high technical interdependence. They fit people with
low growth needs but high social needs.
The motivational approach produces enriched jobs involving high levels of skill
variety, task identity, task significance, autonomy, and feedback from the work itself.
Enriched jobs achieve good results when the technology is uncertain but does not
require high levels of coordination and when employees have high growth needs and
low social needs.
Finally, the STS approach is associated with self-managed teams. These groups are
composed of members performing interrelated tasks. Members are given the multiple
skills, autonomy, and information necessary to control their own task behaviors with
relatively little external control. Many OD practitioners argue that self-managed teams
represent the work design of the 2000s because high levels of technical uncertainty
and interdependence are prevalent in today’s workplaces and because today’s
workers often have high growth and social needs.
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Chapter 15: Performance management

- Understand the components of a performance management system
- Describe and evaluate the effectiveness of goal setting interventions in
organizations
- Understand the application of performance appraisal interventions
- Discuss how reward systems interventions can be applied in organizations
A model of performance management

Performance management is an integrated process of defining, assessing, and
reinforcing employee work behaviors and outcomes. As shown in Figure 17.1,
performance management includes practices and methods for goal setting,
performance appraisal, and reward systems. These practices jointly influence the
performance of individuals and work groups.
Goal setting specifies the kinds of performances that are desired;

- performance appraisal assesses those outcomes;
- training and development systems build the competencies required;
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- Reward systems provide the reinforcers to ensure that desired outcomes are
repeated.
Because performance management occurs in a larger organizational context, at least
three contextual factors determine how these practices affect work performance:
- Business strategy: defines the goals and objectives, policies, and intended
relationships between the organization and its environment to compete
successfully, and performance management focuses, assesses, and reinforces
member work behaviors toward those objectives and intentions. This ensures
that work behaviors are strategically driven.
- Workplace technology: affects whether performance management practices
should be based on the individual or the group. When technology is low in
interdependence and work is designed for individual jobs, goal setting,
performance appraisal, and reward systems should be aimed at individual work
behaviors. Conversely, when technology is highly interdependent and work is
designed for groups, performance management should be aimed at group
behaviors.
- Employee involvement: should determine the nature of performance
management practices. When organizations are highly bureaucratic, with low
levels of participation, then goal setting, performance appraisal, and reward
systems should be formalized and administered by management and staff
personnel. In high-involvement situations, on the other hand, performance
management should be heavily participative, with both managers and
employees setting goals and appraising and rewarding performance.
Goal setting
Goal setting involves managers and subordinates in jointly establishing and clarifying
employee goals. In some cases, such as management by objectives, it also can
facilitate employee counseling and support. In other cases, such as the balanced
scorecard, it generates goals in several defined categories, at different organizational
levels, to establish clear linkages with business strategy.
Establishing challenging goals

Establishing goals that are perceived as challenging but realistic and to which there is
a high level of commitment. This can be accomplished by varying the goal difficulty
and the level of employee participation in the goal-setting process.
- Increasing the difficulty of employee goals, also known as stretch goals, can
increase their perceived challenge and enhance the amount of effort expended
to achieve them.
- An important method for increasing the acceptance of a challenging goal is to
collect benchmarks or best-practice referents. When employees see that other
people, groups, or organizations have achieved a specified level of
performance, they are more motivated to achieve that level themselves.
- Vary the amount of participation in the goal-setting process. Having employees
participate can increase motivation and performance, but only to the extent that
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members set higher goals than those typically assigned to them. Participation
also can convince employees that the goals are achievable and can increase
their commitment to achieving them.
1. There must be a clear “line of sight” between the business strategy goals and
the goals established for individuals or groups.
2. Employee participation in goal setting is more likely to be effective if employee
involvement policies in the organization support it.
3. When tasks are highly interdependent and work is designed for groups, group-
oriented participative goal setting tends to increase commitment.
Clarifying goal measurement

Specific goals reduce ambiguity about expectations and focus the search for
appropriate behaviors.
- To clarify goal measurement, objectives should be operationally defined.
- Clarifying goal measurement also requires that employees and supervisors
negotiate the resources necessary to achieve the goals—for example, time,
equipment, raw materials, and access to information.
- Contextual factors also play an important role in the clarifying process. Goal
specification and clarity can be difficult in high-technology settings where the
work often is uncertain and highly interdependent. Increasing employee
participation in clarifying goal measurement can give employees ownership of
a nonspecific but challenging goal.
- Employee involvement policies also can impact the way goals are clarified. The
entire goal-setting process can be managed by employees and work teams
when employee involvement policies and work designs favor it.
- The process of specifying and clarifying goals is extremely difficult if the
business strategy is unclear. Under such conditions, attempting to gain
consensus on the measurement and importance of goals can lead to frustration
and resistance to change.
Application stages
1. Diagnosis. The first step is a thorough diagnosis of the job or work group, of
employee needs, and of the three context factors, business strategy, workplace
technology, and level of employee involvement. This provides information about
the nature and difficulty of specific goals, the appropriate types and levels of
participation, and the necessary support systems.
2. Preparation for Goal Setting. This step prepares managers and employees
to engage in goal setting, typically by increasing interaction and communication
between managers and employees, and offering formal training in goal-setting
methods. Specific action plans for implementing the program also are made at
this time.
3. Setting of Goals. In this step challenging goals are established and methods
for goal measurement are clarified. Employees participate in the process to the
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extent that contextual factors support such involvement and to the extent that
they are likely to set higher goals than those assigned by management.
4. Review. At this final step the goal-setting process is assessed so that
modifications can be made, if necessary. The goal attributes are evaluated to
see whether the goals are energizing and challenging and whether they support
the business strategy and can be influenced by the employees.
Management by objectives
MBO: align personal goals with business strategy by increasing communications and
shared perceptions between the manager and subordinates, either individually or as
a group, and by reconciling conflict where it exists. MBO is characterized by systematic
and periodic manager–subordinate meetings designed to accomplish organizational
goals by joint planning of the work, periodic reviewing of accomplishments, and mutual
solving of problems that arise in the course of getting the job done.
There are six basic steps in implementing an MBO process:

1. Work-group involvement. In the first step of MBO, the members of the primary
work group define overall group and individual goals and establish action plans
for achieving them. If this step is omitted or if organizational goals and strategies
are unclear, the effectiveness of an MBO approach may be greatly reduced
over time.
2. Joint manager–subordinate goal setting. Once the work group’s overall
goals and responsibilities have been determined, attention is given to the job
duties and responsibilities of the individual role incumbents. Roles are carefully
examined in light of their interdependence with the roles of others outside the
work group.
3. Establishment of action plans for goals. The subordinate develops action
plans for goal accomplishment, either in a group meeting or in a meeting with
the immediate manager. The action plans reflect the individual style of the
subordinate, not that of the supervisor.
4. Establishment of criteria, or yardsticks, of success. At this point, the
manager and the subordinate agree on the success criteria for the goals that
have been established—criteria that are not limited to easily measurable or
quantifiable data. A more important reason for jointly developing the success
criteria is to ensure that the manager and the subordinate have a common
understanding of the task and what is expected of the subordinate. Frequently,
the parties involved discover that they have not reached a mutual
understanding. The subordinate and the manager may have agreed on a
certain task, but in discussing how to measure its success, they find that they
have not been communicating clearly. Arriving at a joint understanding and
agreement on success criteria is the most important step in the entire MBO
process.
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5. Review and recycle. Periodically, the manager reviews work progress, either
in the larger group or with the subordinate. There are three stages in this review
process.
a. First, the subordinate takes the lead, reviewing progress and discussing
achievements and the obstacles faced.
b. Next, the manager discusses work plans and objectives for the future.
c. Last, after the action plans have been made, a more general discussion
covers the subordinate’s future ambitions and other factors of concern.
In this final phase, a great deal of coaching and counseling usually takes
place.
6. Maintenance of records. In many MBO programs, the working documents of
the goals, criteria, yardsticks, priorities, and due dates are forwarded to a third
party. Although the evidence is indirect, it is likely that the MBO program, as an
OD effort, suffers when the working papers are reviewed regularly by a third
party, such as higher management or the personnel department. Experience
shows that when the working papers routinely are passed on, they are less
likely to reflect open, honest communication within the supervisor–subordinate
pair or the work group. Often they represent instead an effort to impress the
third party or to comply with institutionalized rules and procedures.
Performance appraisal
Performance appraisal is a feedback system that involves the direct evaluation of
individual or work-group performance by a supervisor, manager, or peers.
Actively involving all relevant participants can increase the chances that the purpose
of the appraisal will be correctly identified and understood and that the appropriate
appraisal methods will be applied.
360- Degree feedback

The new methods tend to expand the appraiser role beyond managers to include
multiple raters, such as the appraisee, peers or coworkers, and direct reports and
others having direct exposure to the manager’s or employee’s performance. This
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broader approach is used more for member development than for compensation
purposes.
Performance measurement is typically the source of many problems in appraisal

because it is seen as subjective. This concern for validity stems largely from legal tests
of performance appraisal systems and leads organizations to develop measurement
approaches, such as the behaviorally anchored rating scale (BARS) and its variants.
Although it may not be practical to increase the number of formal appraisals, the
frequency of informal feedback can increase, especially when strategic objectives
change or when the technology is highly uncertain. In those situations, frequent
performance feedback is necessary for appropriate adaptations in work behavior. The
newer approaches to appraisal increase the timeliness of feedback and give
employees more control over their work.
Application stages:
1. Select the Right People. For political and legal reasons, the design process
needs to include human resources staff, legal representatives, senior
management, and system users. Failure to recognize performance appraisal
as part of a complex performance management system is the single most
important reason for design problems. Members representing a variety of
functions need to be involved in the design process so that the essential
strategic and organizational issues are addressed.
2. Diagnose the Current Situation. A clear picture of the current appraisal
process is essential to designing a new one. Diagnosis involves assessing the
contextual factors (business strategy, workplace technology, and employee
involvement), current appraisal practices and satisfaction with them, work
design, and the current goal-setting and reward system practices. This
information is used to define the current system’s strengths and weaknesses.
3. Establish the System’s Purposes and Objectives. The ultimate purpose of
an appraisal system is to help the organization achieve better performance.
Managers, staff, and employees can have more specific views about how the
appraisal process can be used. Potential purposes can include serving as a
basis for rewards, career planning, human resources planning, and
performance improvement or simply giving performance feedback.
4. Design the Performance Appraisal System. Given the agreed-upon
purposes of the system and the contextual factors, the appropriate elements of
an appraisal system can be established. These should include choices about
who performs the appraisal, who is involved in determining performance, how
performance is measured, and how often feedback is given. Criteria for
designing an effective performance appraisal system include
a. Timeliness: Individuals and work groups need to get performance
information before evaluation or review. When the information precedes
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performance evaluation, it can be used to engage in problem-solving

behavior that improves performance and satisfaction.
b. Accuracy: Inaccurate data prevent employees from determining whether
their performance is above or below the goal targets and discourage
problem-solving behavior.
c. Acceptance: the performance feedback must be accepted and owned by
the people who use it.
d. Understanding: information contained in the appraisal system needs to
be understood if it is to have problem-solving value.
e. Focus on critical control points: The information received by employees
must be aligned with important elements of the business strategy,
employee performance, and reward system.
f. Economic feasibility: an appraisal system should meet a simple cost–
benefit test. If the costs associated with collecting and feeding back
performance information exceed the benefits derived from using the
information, then a simpler system should be installed.
5. Experiment with Implementation. The complexity and potential problems
associated with performance appraisal processes strongly suggest using a pilot
test of the new process to spot, gauge, and correct any flaws in the design
before it is implemented systemwide.
6. Evaluate and Monitor the System. Although the experimentation step may
have uncovered many initial design flaws, ongoing evaluation of the system
once it is implemented is important. User satisfaction from human resources
staff, manager, and employee viewpoints is an essential input. In addition, the
legal defensibility of the system should be tracked by noting the distribution of
appraisal scores against age, sex, and ethnic categories.
Reward systems
Organizational rewards are powerful incentives for improving employee and
workgroup performance. OD traditionally has relied on intrinsic rewards, such as
enriched jobs and opportunities for decision making, to motivate employee
performance. More recently, OD practitioners have expanded their focus to include
extrinsic rewards: pay; various incentives, such as stock options, bonuses, and gain
sharing; promotions; and benefits. They have discovered that both intrinsic and
extrinsic rewards can enhance performance and satisfaction.
- Rewards should be congruent with other organizational systems and practices,
such as the organization’s structure, top management’s human relations
philosophy, and work designs.
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Person/job based vs. performance based

- Job-based system. Job descriptions are created for each position in the
organization and a value is attached to the work performed. Pay is based on
that valuation process.
- Person-based system. The value brought by the person's skills and knowledge.
Skill-based pay and knowledge-based pay are important examples of this
system.
- Performance based system. Pay is contingent on the outcomes produced.
Individual vs. Group Rewards

When work is complex and the performance of one task depends on prior tasks, the
appropriate work design is team based because successfully adding value requires
tight coordination. This tight coordination is reinforced by reward systems that
recognize group-level outputs. When work tasks are independent, individual reward
systems incent individual behavior.
Internal and External Equity

Member satisfaction and motivation can be influenced by design features that ensure
that the organization’s pay policies are equitable or fair.
- Internal equity involves whether similar rewards are given to people holding
similar jobs or performing similarly in the organization.
- External equity involves comparing the organization’s rewards with those of
other organizations in the same labor market.
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Hierarchy
Although not often a formal policy, many organizations offer different types of rewards
based on a position’s level in the organization structure. The recent concerns over
CEO pay reflect the increasing prevalence of hierarchical reward systems. In
hierarchical systems, senior managers have access to a variety of perquisites, such
as reserved parking, corporate transportation, financial aid, or health benefits that
others do not.
Rewards Mix
This design feature involves specifying the extent to which different types of rewards
are included in the overall reward strategy. These rewards can include pay in various
forms, including base salary, bonuses, commissions, and stock; benefits, such as
health care, insurance, child care, leaves, and education; and perquisites, including
preferred office space, cell phones, cars, or health club memberships.
Security
Organizations, such as IBM and AT&T, once offered organization members lifetime
employment as a formal policy. Today, the rapid expansion and contraction of markets
and the realities of downsizing have dramatically altered the psychological
employment contract. Instead of job security, a more instrumental relationship has
emerged. However, organizations can and do make commitments to people and job
security and this remains an important feature of reward systems.
Seniority
Many reward systems include an implicit or explicit policy concerning the value of
longevity. Organizations, especially unionized companies covered by a collective
bargaining agreement, often have built-in rewards for increasing lengths of service.
Value expectancy theory

The value expectancy model posits that employees will expend effort to achieve
performance goals that they believe will lead to outcomes that they value. This effort
will result in the desired performance goals if the goals are realistic, if employees fully
understand what is expected of them, and if they have the necessary skills and
resources. Ongoing motivation depends on the extent to which attaining the desired
performance goals actually results in valued outcomes. Consequently, key objectives
of reward systems interventions are to identify the intrinsic and extrinsic outcomes
(rewards) that are highly valued and to link them to the achievement of desired
performance goals.
Based on value expectancy theory, the ability of rewards to motivate desired behavior
depends on these five factors:
1. Availability. For rewards to reinforce desired performance, they must be not
only desired but also available.
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2. Timeliness. Like effective performance feedback, rewards should be given in

a timely manner. A reward’s motivating potential is reduced to the extent that it
is separated in time from the performance it is intended to reinforce.
3. Performance contingency. Rewards should be closely linked with particular
performances. If the goal is met, the reward is given; if the target is missed, the
reward is reduced or not given. The clearer the linkage between performance
and rewards, the better able rewards are to motivate desired behavior.
4. Durability. Some rewards last longer than others. Intrinsic rewards, such as
increased autonomy and pride in workmanship, tend to last longer than extrinsic
rewards.
5. Visibility. To leverage a reward system, it must be visible. Organization
members must be able to see who is getting the rewards. Visible rewards, such
as placement on a high-status project, promotion to a new job, and increased
authority, send signals to employees that rewards are available, timely, and
performance contingent.
Skill- and Knowledge-Based Pay Systems

Skill-based pay systems must first establish the skills needed for effective operations,
identify the optimal skill profile and number of employees needed with each skill, price
each skill and skill set, develop rules to sequence and acquire skills, and develop
methods to measure member skill acquisition. Typically, employees are paid
according to the number of different jobs that they can perform.
Skill-based pay systems have a number of benefits.

- They contribute to organizational effectiveness by providing a more flexible
workforce and by giving employees a broad perspective on how the entire plant
operates.
- This flexibility can result in leaner staffing and fewer problems with
absenteeism, turnover, and work disruptions.
- Skill-based pay can lead to durable employee satisfaction by reinforcing
individual development and by producing an equitable wage rate.
The three major drawbacks of skill-based pay schemes are:

- The tendency to “top out,”: Top-out occurs when employees learn all the skills
there are to learn and then run up against the top end of the pay scale, with no
higher levels to attain.
- The expense: Skill-based pay systems also require a heavy investment in
training, as well as a measurement system capable of indicating when
employees have learned the new jobs. These systems typically increase direct
labor costs, as employees are paid highly for learning multiple tasks.
- The lack of performance contingency: Because pay is based on skill and not
performance, the workforce could be highly paid and flexible but not productive.
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Performance-Based Pay Systems

Pay-for-performance plans tend to vary along three dimensions:
(1) the organizational unit by which performance is measured for reward
purposes—an individual, group, or organization basis;
(2) the way performance is measured—the subjective measures used in
supervisors’ ratings or objective measures of productivity, costs, or profits;
(3) What rewards are given for good performance—salary increases, stock, or
cash bonuses.
- In terms of linking pay to performance, individual pay plans are rated highest,
followed by group plans and then organization plans. At the group and
organization levels, an individual’s pay is influenced by the behavior of others
and by external market conditions.
- Stock and bonus plans tie pay to performance better than do salary plans. The
amount of awarded stock may vary sharply from year to year, whereas salary
increases tend to be more stable because organizations seldom cut employees’
salaries.
- Objective measures of performance score higher than subjective measures.
Objective measures, such as profit or costs, are more credible, and people are
more likely to see the link between pay and objective measures.
Most of the pay plans do not produce negative side effects, such as workers falsifying
data and restricting performance. The major exceptions are individual bonus plans.
These plans, such as piece-rate systems, tend to result in negative effects, particularly
when trust in the plan is low.
From an employee’s perspective, the least acceptable pay plans are individual bonus
programs. Employees tend to dislike such plans because they encourage competition
among individuals and because they are difficult to administer fairly. Such plans may
be inappropriate in some technical contexts.
No one pay-for-performance plan scores highest on all criteria. Rather, each plan has
certain strengths and weaknesses that depend on a variety of contingencies. As
business strategies, organization performance, and other contingencies change, the
pay-for-performance system also must change.
Gain-sharing systems
Gain sharing involves paying employees a bonus based on improvements in the
operating results of an organization. Gain sharing increasingly has been included in
comprehensive employee involvement projects. Developing a gain-sharing plan
requires making choices about the following design elements:
- Process of design. The success of a gain-sharing system depends on
employee acceptance and cooperation. Recommended is a participative
approach that involves a cross section of employees to design the plan and be
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trained in gain-sharing concepts and practice. The task force should include
people who are credible and represent both management and non-
management interests.
- Organizational unit covered. The size of the unit included in the plan can vary
widely, from departments or plants with less than 50 employees to companies
with several thousand people. A plan covering the entire plant would be ideal
in situations where there is a freestanding plant with good performance
measures and an employee size of less than 500. When the number of
employees exceeds 500, multiple plans may be installed, each covering a
relatively discrete part of the company.
- Bonus formula. Gain-sharing plans are based on a formula that generates a
bonus pool, which is divided among those covered by the plan. Although most
plans are custom-designed, there are two general considerations about the
nature of the bonus formula.
- First, a standard of performance must be developed that can be used as
a baseline for calculating improvements or losses. Some plans use past
performance to form a historical standard, whereas others use
engineered or estimated standards. When available, historical data
provide a relatively fair standard of performance; engineer-determined
data can work, however, if there is a high level of trust in the standard
and how it is set.
- Second, the costs included in arriving at the bonus must be chosen. The
key is to focus on those costs that are most controllable by employees.
Some plans use labor costs as a proportion of total sales; others include
a wider range of controllable costs, such as those for materials and
utilities.
- Sharing process. Once the bonus formula is determined, it is necessary to
decide how to share gains when they are obtained. This decision includes
choices about what percentage of the bonus pool should go to the company
and what percentage to employees. In general, the company should take a
percentage low enough to ensure that the plan generates a realistic bonus for
employees. Other decisions about dividing the bonus pool include who will
share in the bonus and how the money will be divided among employees.
Typically, all employees included in the organizational unit covered by the plan
share in the bonus. Most plans divide the money on the basis of a straight
percentage of total salary payments.
- Frequency of bonus. Most plans calculate a bonus monthly. This typically fits
with organizational recording needs and is frequent enough to spur employee
motivation. Longer payout periods generally are used in seasonal businesses
or where there is a long production or billing cycle for a product or service.
- Change management. Organizational changes, such as new technology and
product mixes, can disrupt the bonus formula. Many plans include a steering
committee to review the plan and to make necessary adjustments, especially
in light of significant organizational changes.
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- The participative system. Many gain-sharing plans include a participative

system that helps to gather, assess, and implement employee suggestions and
improvements. These systems generally include a procedure for formalizing
suggestions and different levels of committees for assessing and implementing
them.
Although gain-sharing plans are tailored to each situation, three major plans are used
most often:
1. The Scanlon plan: The incentive part of the Scanlon plan generally includes a
bonus formula based on a ratio measure comparing total sales volume to total
payroll expenses. This measure of labor cost efficiency is relatively responsive
to employee behaviors and is used to construct a historical base rate at the
beginning of the plan. Savings resulting from improvements over this base
make up the bonus pool. The bonus is often split equally between the company
and the employees, with all members of the organization receiving bonuses of
a percentage of their salaries.
2. The Rucker plan
3. Improshare
The Rucker plan and Improshare use different bonus formulas and place less
emphasis on worker participation than does the Scanlon plan.
Goal-sharing
Goal- sharing plans pay bonuses when performance exceeds a standard, but differ in
that goal sharing plans are not based on historical and well-understood performance
measures. Rather, goal-sharing plans use changing strategic objectives as the primary
standard of performance. Thus, goal sharing is a more flexible reward system than
gain sharing.
When does gain-sharing work?

Gain-sharing plans tie the goals of workers to the organization’s goals. It is to the
financial advantage of employees to work harder, to cooperate with each other, to
make suggestions, and to implement improvements.
In general, gain sharing seems suited to small organizations with a good market,
simple measures of historical performance, and production costs controllable by
employees. Product and market demand should be relatively stable, and employee–
management relations should be open and based on trust. Top management should
support the plan, and support services should be willing and able to respond to
increased demands. The workforce should be interested in and knowledgeable about
gain sharing and should be technically proficient in its tasks.
Promotion systems
Many decisions about promotions and job movements in organizations are made in a
top-down, closed manner: Higher-level managers decide whether lower-level
employees will be promoted.
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- This process can be secretive, with people often not knowing that a position is
open, that they are being considered for promotion, or the reasons why some
people are promoted but others are not. Without such information, capable
people who might be interested in a new job may be overlooked.
- Furthermore, because employees may fail to see the connection between good
performance and promotions, the motivational potential of promotions is
reduced.
- Finally, emphasizing promotions as a reward focuses attention on
advancement instead of developing new skills and knowledge and can lead to
reduced flexibility in the workforce.
Solutions:
- Openly posting the availability of new jobs and inviting people to nominate
themselves. Open posting also can increase employee motivation by showing
that a valued reward is available and contingent on performance.
- Including peers and subordinates in the decision-making process. Peer and
subordinate judgments about a person’s performance and promotability help
bring all relevant data to bear on promotion decisions. Evidence from high-
involvement plants suggests that participation in selecting new members can
lead to greater group cohesiveness and task effectiveness.
Reward-system process issues

Process refers to how pay and other rewards typically are administered in the
organization. At least two process issues affect employees’ perceptions of the reward
system: who should be involved in designing and administering the reward system,
and what kind of communication should exist with respect to rewards.
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Summary chapter 15:
This chapter presented three types of human resources management interventions:

goal setting, performance appraisal, and reward systems. Although all three change
programs are relatively new to organization development, they offer powerful methods
for managing employee and work-group performance. They also help enhance worker
satisfaction and support work design, business strategy, and employee involvement
practices.
Principles contributing to the success of goal setting include establishing
challenging goals and clarifying measurement. These are accomplished by setting
difficult but feasible goals, managing participation in the goal-setting process, and
being sure that the goals can be measured and influenced by the employee or work
group. The most common form of goal setting—management by objectives—depends
on top-management support and participative planning to be effective.
Performance appraisals represent an important link between goal setting and
reward systems. As part of an organization’s feedback and control system, they
provide employees and work groups with information they can use to improve work
outcomes. Appraisals are becoming more participative and developmental. An
increasing number of people are involved in collecting performance data, evaluating
an employee’s performance, and determining how the appraisee can improve.
Reward systems interventions elicit, reinforce, and maintain desired
performance. They can be oriented to individual jobs, work groups, or organizations
and affect both performance and employee well-being. In addition to traditional job-
based compensation systems, the major reward systems interventions in use today
are skill-based pay, pay for performance, gain sharing, and promotions. Each of the
plans has strengths and weaknesses when measured against criteria of performance
contingency, equity, availability, timeliness, durability, and visibility. The critical
process of implementing a reward system involves decisions about who should be
involved in designing and administering it and how much information about pay should
be communicated.
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Chapter 16: Talent management

- Examine and evaluate the coaching and mentoring intervention
- Describe the process of implementing management and leadership
development interventions
- Understand how career planning and development interventions improve the
individual’s personal competencies and enhance traditional human resource
approaches
Coaching and mentoring

Coaching involves working with organizational members, typically managers and
executives, on a regular basis to help them clarify their goals, deal with potential
stumbling blocks, and improve their performance.
Similar to coaching, mentoring involves establishing a relationship between a manager

or someone more experienced and another organization member who is less
experienced. Unlike coaching, mentoring is often more directive, with the mentor
intentionally transferring specific knowledge and skill and guiding the client’s activities,
perhaps as part of a career development process.
What are the goals?

Coaching typically addresses one or more of the following goals: assisting an
executive to more effectively execute some transition, such as a merger integration or
downsizing; addressing a performance problem; or developing new behavioral skills
as part of a leadership development program.
Application Stages
The coaching process closely follows the process of planned change outlined in
Chapter 2, including entry and contracting, assessment, debriefing (feedback), action
planning, intervention, and assessment. The mentoring process is similar except that
the assessment is generally presumed and the process moves straight to action
planning interventions.
1. Establish the principles of the relationship. The initial phases of a coaching
intervention involve establishing the goals of the engagement; the parameters
of the relationship, such as schedules, resources, and compensation; and
ethical considerations, such as confidentiality and boundary issues.
2. Conduct an assessment. This process can be personal or systemic.
a. In a personal assessment, the client is guided through an assessment
framework. It can involve a set of interview questions that elicit
development opportunities or a more formal personal-style instrument,
such as the Myers–Briggs Type Indicator, the FIRO-B, or DISC profile.
Other instruments, including the Hogan’s battery of tests, the Minnesota
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Multiphasic Personality Inventory (MMPI), or the “Big 5” instrument, can

also be used, but they require extensive training and certification. OD
practitioners should carefully consider the ethics of using different
instruments and their qualifications for administering and interpreting the
results.
b. In a systemic assessment, the client’s team, peers, and relevant others
are engaged in the process. The most common form of systemic
assessment involves a 360-degree feedback process.
3. Debrief the results. The coach and client review the assessment data and
agree on a diagnosis. The principles of data feedback outlined in Chapter 8
apply here. The purpose of the feedback session is to get the client to move to
action. In light of the assessment data, intervention goals can be further refined
and revised if necessary.
4. Develop an action plan. The specific activities the client and coach will engage
in are outlined. These can include new actions that will lead to goal
achievement, learning opportunities that build knowledge and skill, or projects
to demonstrate competence. Developing an action plan can be the most difficult
part of the process because the client must own the results of the assessment
and begin to see new possibilities for action. The action plan should also include
methods and milestones to monitor progress and to evaluate the effectiveness
of the coaching process.
5. Implement the action plan. In addition to the elements of the action plan listed
above, much of the coaching process involves one-on-one meetings between
the coach and the client. In these sessions, the coach supports and encourages
the client to act on her/his intentions. A considerable amount of skill is required
to confront, challenge, and facilitate learning.
6. Assess the results. At appropriate intervals, the coach and client review and
evaluate the results of implementation. Based on this information, the goals or
action plans can be revised, or the process can be terminated.
Management and leadership development interventions

Management and leadership development programs are one of the most popular OD
interventions aimed at developing talent and increasing employee retention. These
programs build an individual’s skills, socialize leaders in corporate values, and prepare
executives for strategic leadership roles.
Management and leadership development interventions can be differentiated from

career development. In management and leadership development, the focus is on
developing the skills and knowledge the organization believes will be necessary to
implement future strategies and manage the business. In career development, the
focus is on building the skills and knowledge the individual believes will best equip
them for the career they prefer.
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What are the goals?

The term training is typically used when the goal is development of the workforce,
while the terms management development or leadership development are normally
applied when the goal is development of the organization’s management and
executive talent.
Application stages
Management and leadership development interventions generally follow a process of
needs assessment, setting instructional objectives and design, delivery, and
evaluation.
1. Perform a needs assessment. A needs assessment typically determines the
competencies believed to characterize effective leaders in the organization.
This can be done by interviewing well-respected executives or reviewing lists
of published leadership competencies. A needs assessment must gather data
on the strategy, the organization, and the individuals who might attend the
leadership program.
a. The strategy assessment involves understanding the knowledge and
experiences future leaders will need to execute the business strategy. It
includes tasks, activities, and decisions that participants should perform
better after training as well as the conceptual frameworks that guide
these activities. This can be done by identifying the top three to five
external and internal leadership challenges facing the business.
b. The organization assessment focuses on the systems that may affect
the ability to transfer learning and developmental experiences back to
the organization. For transfer to occur, a leadership development
program must provide participants with the opportunity and appropriate
conditions to apply their new skills, knowledge, and abilities in the work
situation.
c. Individual assessment aims to understand the existing pool of people
who should be candidates for the program. Such an assessment would
include their current level and ranges of skills, knowledge, and abilities.
2. Develop the objectives and design of the training. Establish outcome
objectives for the development intervention. These objectives should describe
both the results expected from a competent leader and how those results were
achieved.
3. Deliver the training.
4. Evaluate the training. Assess the training to determine whether it met its
objectives. The four criteria most commonly used to evaluate training
effectiveness are reaction, learning, behavior and results.
Career planning and development interventions

Career planning is concerned with individuals choosing jobs, occupations, and
organizations at each stage of their careers. Career development involves helping
employees attain career objectives. Research suggests that employees progress
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through at least four distinct career stages as they mature and gain experience. Each
stage has unique concerns, needs, and challenges.
1. The establishment stage (ages 21–26). This phase is the outset of a career
when people are generally uncertain and may be stressed about their
competence and potential. They are dependent on others, especially bosses
and more experienced employees, for guidance, support, and feedback. At this
stage, people are making initial choices about committing themselves to a
specific career, organization, and job. They are exploring possibilities while
learning about their own capabilities.
2. The advancement stage (ages 26–40). During this phase, employees become
independent contributors who are concerned with achieving and advancing in
their chosen careers. They have typically learned to perform autonomously and
need less guidance from bosses and closer ties with colleagues. This settling-
down period also is characterized by attempts to clarify the range of long-term
career options.
3. The maintenance stage (ages 40–60). This phase involves leveling off and
holding on to career successes. Many people at this stage have achieved their
greatest advancements and are now concerned with helping less-experienced
subordinates. For those who are dissatisfied with their career progress, this
period can be conflictual and depressing, as characterized by the term “midlife
crisis.” People often reappraise their circumstances, search for alternatives,
and redirect their career efforts. Success in these endeavors can lead to
continuing growth, whereas failure can lead to early decline.
4. The withdrawal stage (age 60 and above). This final stage is concerned with
leaving a career. It involves letting go of organizational attachments and getting
ready for greater leisure time and retirement. The employee’s major
contributions are imparting knowledge and experience to others. For those
people who are generally satisfied with their careers, this period can result in
feelings of fulfillment and a willingness to leave the career behind.
Application Stages
The two primary applications steps are establishing a mechanism for career planning
and assembling an appropriate set of career development processes.
Establish a Career Planning Mechanism: Career planning involves setting individual

career objectives. It is highly personalized and generally includes assessing one’s
interests, capabilities, values, and goals; examining alternative careers; making
decisions that may affect the current job; and planning how to progress in the desired
direction. This process results in people choosing jobs, occupations, and
organizations.
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Career planning resources are used to help the employee address pertinent issues.
Career planning programs include some or all of the following resources:
- Communication about career opportunities and resources available to
employees within the organization
- Workshops to encourage employees to assess their interests, abilities, and job
situations and to formulate career development plans
- Career counseling by managers or human resources personnel
- Self-development materials, such as books, videotapes, and other media,
directed toward identifying life and career issues
- Assessment programs that provide various tests of vocational interests,
aptitudes, and abilities relevant to setting career goals.
Assemble an Appropriate Set of Career Development Processes

Career development interventions help individuals achieve their career objectives.
Career development follows closely from career planning and includes organizational
practices that help employees implement those plans. Career development can be
integrated with people’s career needs by linking it to different career stages.
We present eight interventions that can be mixed and matched to meet the needs of
a diverse workforce:
1. Realistic Job Preview. This intervention provides applicants with credible
expectations about the job during the recruitment process.
2. Assessment centers. An assessment team consisting of experienced
managers and human resources specialists observes the behaviors and
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performance of each candidate. This team arrives at an overall assessment of

each participant’s managerial potential, including a rating on several items
believed to be relevant to managerial success in the organization, and pass the
results to management for use in making promotion decisions. When used for
developmental purposes, assessment centers can provide employees with the
support and direction needed for career development.
3. Job Rotation and Challenging Assignments. The purpose of these
interventions is to provide employees with the experience and visibility needed
for career advancement or with the challenge needed to revitalize a stagnant
career at the maintenance stage.
4. Consultative Roles. This role involves opportunities to apply wisdom and
knowledge to help others develop in their careers and solve organizational
problems, and is most frequently offered to employees in the maintenance and
withdrawal stages. Such roles, which can be structured around specific projects
or problems, involve offering advice and expertise to those responsible for
resolving the issues, thus increasing the organization’s problem-solving
abilities. In contrast to coaching and mentoring, consultative roles are not
necessarily focused directly on guiding or sponsoring younger employees’
careers. They are directed at helping others deal with complex problems or
projects.
5. Developmental Training. Training and development interventions provide new
or existing organization members with the skills and knowledge they need to
perform work. The focus of training interventions has broadened from
classroom methods aimed at hourly workers to varied methods, including
simulations, action learning, computer-based or online training, and case
studies, intended for all levels and types of organization members.
6. Performance Management. One of the most effective interventions during the
establishment and advancement phases is the integration of performance
management systems with career development conversations. Employees
need continual feedback about goal achievement as well as the necessary
support to improve their performances. Feedback and support, in the form of
coaching, developmental training, or management development, are
particularly relevant when employees are establishing careers.
7. Work–Life Balance Interventions. This OD intervention helps employees
better integrate and balance work and home life. Although these interventions
can apply to all career stages, they are especially relevant during advancement.
This is because of the increased number of dual-career households.
8. Phased Retirement. This provides older employees with an effective way of
withdrawing from the organization and establishing a productive leisure life, by
gradually reducing work hours and moving to full retirement.
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Summary chapter 16:

This chapter presented three major human resources interventions: coaching and
mentoring interventions, career planning and development interventions, and
leadership and management development interventions. Although these kinds of
change programs generally are carried out by human resources specialists, OD
practitioners are gaining competence in these areas and are increasingly involved in
these interventions.
Coaching interventions are aimed at helping individuals. Although it can be an
integral part of other OD interventions, it is intended to help individuals clarify their
goals, deal with potential stumbling blocks, learn to lead change, and improve their
performance.
Management and leadership development programs build leadership skills,
often in alignment with a predetermined set of competencies, socialize managers and
leadership in a set of values believed to be important to the success of the
organization, and help execute strategic change agendas. Leadership development is
one of the most popular OD interventions today. Both management and leadership
development and career planning and development interventions are intended to
improve the organization’s ability to develop and retain a valuable workforce. Career
planning involves helping people choose jobs, occupations, and organizations at
different stages of their careers. It is a highly personalized process that includes
assessing one’s interests, values, and capabilities; examining alternative careers; and
making relevant decisions. Career development helps employees achieve career
objectives. Effective efforts in that direction include linking corporate business
objectives, human resources needs, and the personal needs of employees. Different
career development needs and practices exist and are relevant to each of the four
stages of people’s careers.
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Chapter 17: Workforce diversity and wellness

- Examine human resources management interventions related to workforce
diversity.
- Understand and evaluate the effectiveness of employee wellness interventions.
Diversity results from people who bring different resources and perspectives to the
workplace and who have distinctive needs, preferences, expectations, and lifestyles.
Organizations must design human resources systems that account for these
differences if they are to attract and retain a productive workforce and if they want to
turn diversity into a competitive advantage.
Increasing workforce diversity provides a challenging environment for HRM, and an

opportunity for innovation.
Workforce diversity interventions

Diversity results from people who bring different resources and perspectives to the
workplace and who have distinctive needs, preferences, expectations and lifestyles.
HR systems must be designed to account for these differences to attract and retain a
productive workforce and turn diversity into a competitive advantage.
What are the goals?

General framework for managing diversity in organizations. An organization's diversity
approach is a function of:
1. Internal (beliefs, values, attitudes) and external pressures (social norms,
globalization) for and against diversity (e.g., globalization and social norms
support diversity; but people may fear that too many perspectives, beliefs,
values and attitudes dilute concerted action.
2. Management’s perspectives and priorities with respect to diversity can range
from resistance to active learning and from marginal to strategic (e.g.,
organizations can resist diversity by implementing only legally mandated
policies; or a learning and strategic perspective can lead management to view
diversity as a source of competitive advantage - organizations with a diverse
customer base can not only improve perceptions of service quality, but also
embrace diversity by tailoring the range of services to that market and building
systems and processes that are flexible).
3. Within management’s priorities, the organization's strategic responses can
range from reactive to proactive.
4. Organizations’ implementation style can range from episodic to systemic (the
diversity approach will be most effective when the strategic responses and
implementation style fit with management’s intent and internal and external
pressures).
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Due to trends in environment (e.g., increasing number of women in the workforce,

asks for maternity leaves) organizations are increasingly not only adopting learning
perspectives with respect to diversity, but systemically weaving diversity-friendly
values and practices into the cultural fabric of the organization.
A general framework for managing diversity
- The model suggests that an organization's diversity approach is a function of

internal and external pressures.
- Management’s perspective and priorities with respect to diversity can range
from resistance to active learning and from marginal to strategic.
- Within management priorities, the organization's strategic response can range
from reactive to proactive.
- The implementation style can range from episodic to systemic.
Application stages
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Many of the OD interventions can be applied to the strategic responses and

implementation of workforce diversity. There are several internal and external
pressures nowadays facing organizations. Major trends, characteristics of those
dimensions, organization implications, workforce needs, and specific OD interventions
that can address those implications:
- Age: Average is increasing, distribution of age is different. This has implications

for health care, mobility and security. Organizational development interventions
must be adapted to the different age groups and demographic cohorts.
Interventions include wellness programs, job design, career development and
planning, and reward systems. Wellness programs used to address the
physical and mental health of employees from all generations. Career-planning
and development programs will have to recognize the different career stages
of each cohort and offer resources tailored to that stage. Reward system
programs may offer increased health benefits, opportunities to share
knowledge/experiences, time off, and other perks for the older worker, while
using promotion, ownership and pay to attract and motivate the scarcer,
younger workforce.
- Gender: More women in the workforce, dual-income families increasing. This
has implications for childcare, maternity/paternity leaves, and single parents.
Interventions include job design, fringe benefit rewards (e.g., special leaves,
flexible work).
o Job design: e.g. job sharing for working mothers, who pursue both career
and family.
o Fringe benefits: child-care options, flexible working hours.
o Career development: organizations consider the assumptions
embedded in their career development programs to ensure programs
are not biased toward masculine experiences and world views.
- Race/ethnicity: Minorities represent larger segments of workforce and a small
segment of top management. Qualifications and experience of minorities are
often overlooked, which is discrimination. This is an important issue, especially
as organizations globalize and endeavor to increase diversity among top
leadership and board members. Interventions include equal employment
opportunities, mentoring programs and education & training.
o Training: can increase the likelihood that effective diversity management
programs are responsive to data (not perceptions), move beyond
eliminating obvious racism to detect more subtle forms as well, eliminate
vague selection and promotion criteria, link diversity management to
individual performance appraisals, and develop/enforce appropriate
rules.
o Mentoring programs can ensure that minorities in the advancement
stage get the appropriate coaching and those successful minority
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managers and executives get the chance to share their wisdom and
experience with others.
- Sexual orientation: Number of single-sex households are increasing, more liberal
attitudes towards sexual orientation; sexual and affectional orientation (gay,
lesbian, bisexual individuals and couples). Could lead to discrimination (often
misperceived relationship between sexual orientation and AIDS/HIV). While sexual
orientation is not protected under federal equal employment opportunity (EEO),
many cities have this legislation. Most organizations have modified their EEO
statements to address sexual orientation (decision of hiring, promotion etc. not
made with respect to sexual orientation) Often fear that openness will lead to unfair
treatment (discrimination, both overt and unconscious). Interventions include EEO,
fringe benefits, education & training (relatively new in OD). Most frequent
intervention is education and training. Increases member’s awareness of the facts
and decreases likelihood of overt discrimination. HR practices having to do with
EEO and fringe benefits (e.g. health care).
- Disability: More people with disabilities in the workforce. Productivity of disabled
workers often surprise managers; training needed to make them aware of this
opportunity. However, need for healthcare, new workplace layouts, attitudes
towards disabled people etc. Implications for job skills and challenge issues,
physical space design, respect & dignity. Interventions include PM (goal setting,
monitoring and improving performance), job design (adjustments), career planning
and development (make disabled people aware of career opportunities). OD
interventions, including work design, career planning/development and PM can be
used to integrate the disabled into the workforce. (PM interventions, including goal
setting, monitoring and coaching performance, aligned with workforce's
characteristics are important).
- Culture & values: Rising proportion of immigrant and minority-group workers
(globalization); shift in rewards. Organizations will be expected to satisfy both
extrinsic and monetary needs, as well as intrinsic and personal growth needs.
Different cultures represent a variety of values, work ethics, and norms of correct
behavior. Management practices should be aligned with cultural values and
support both career and family orientations. Jobs might be adjusted to English.
Implications include flexible organizational policies, autonomy, affirmation and
respect. Interventions include career planning and development (opportunities that
match culture), employee involvement (adapted to cultural needs for participation),
reward systems (e.g., increasing flexibility to meet personal obligations/religious
and family occasions). Several interventions, including EI in decision-making,
reward systems and career planning/development can be used to adapt to cultural
diversity. Maximize worker productivity by basing amount of power and info
workers have on cultural and value orientations. Reward systems focused on
flexibility (e.g. flexible work hours and flexible benefits such as floating holidays).
Child/older care and dependent care assistance also support different lifestyles (in
some cultures they take care of parents at home) Career planning/development
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programs to find opportunities that math culture. This will increase job satisfaction,
productivity and retention.
Results for diversity interventions
Evidence shows that diversity interventions are growing in popularity however there is
still ambiguity about the depth of organizational commitment to such practices.
Research suggests that diversity interventions are especially prevalent in large
organizations with diversity friendly senior management and HR policies. Diversity
training program lead to positive attitudinal changes. EEOC and survey data resulted
in a division of diversity programs in categories:
1. Structures of responsibility, such as affirmative action plans, diversity
committees and task forces, and diversity managers;
2. Educational programs, such as training and diversity feedback for managers;
3. Networking and mentoring programs.
Structures of responsibility/structural programs (e.g. affirmative action plans, diversity
committees and task forces, and diversity managers) are associated with increases in
managerial diversity. Importantly, the presence of structural interventions improved
the effect of the other two interventions. Educational programs did not. Networking
programs were modest increasing management diversity.
Employee stress and wellness interventions

Organizations have become increasingly aware of the relationship between employee
wellness and productivity (stress leads to absenteeism, turnover, less productivity,
insurance costs). Employee stress and wellness interventions, such as work leaves,
health facilities and Employee Assistance Programs (EAP), recognize this important
link between worker health and productivity. Organizations are more and more
interested in retaining a skilled workforce and are concerned with the welfare of their
employees.
What are the goals?

Individual well-being and wellness comprises the various life/non-work satisfactions
enjoyed by individuals, work and job-related satisfactions, and general health. Health
is a subcomponent of well-being and includes both mental/psychological and
physical/physiological factors. In addition, a person’s work setting, personality traits
and stress coping skills affect overall well-being. In turn, well-being impacts personal
and organizational outcomes. There is a growing concern in organizations about
managing dysfunction caused by stress. Stress has been linked to hypertension, heart
attacks, diabetes, asthma, chronic pain, allergies, headache etc. Can also lead to
alcohol and drug abuse. For organizations these personal effects can result in costly
health benefits, absenteeism, turnover and low performance.
Application stages
1. Diagnosing stress and becoming aware of its causes: Stress is generally
viewed in terms of the fit between someone’s needs, abilities and expectations
with environmental demands, changes and opportunities. It involves both
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physiological and psychological responses to environmental conditions,

causing people to change or adjust their behavior.
a. good person- environment fit results in positive reactions to stress;
b. Poor fit leads to the negative consequences.
Stress is generally positive when it occurs at moderate levels and contributes to
effective motivation, innovation and learning (e.g., promotion can be a stressful event).
But stress becomes dysfunctional when it is excessively high (or low) or persists over
a long period of time (overpower a person’s coping abilities and cause physical and
emotional exhaustion). Too high levels of stress can lead to withdrawal behavior,
exhaustion, ailments (e.g. high blood pressure) and lowered performance. Situations
in which there is a poor fit between employees and organizations produce negative
stress effects.
Research identified specific occupational stressors, potential dysfunctional

consequences and interventions to address stress. People’s individual differences
determine the extent to which the stressors are perceived negatively. Almost any
dimension of the organization including the physical environment, structure, roles, or
relationships, can cause negative stress. Therefore, all of the OD interventions can
play a role in stress management (e.g., team building, EI, reward systems and career
planning/development all can help alleviate stressful working conditions). However,
there are several occupational stressors and stress management techniques that are
unique to the stress field:
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- Workplace stressors:
o physical environment (light, noise, temperature, pollution);
o individual (role conflict/ambiguity, work overload, lack of control,
responsibility);
o group (poor peer, subordinate or boss relationships);
o Organizational (poor structural design, politics, poor HR policies).
Workload: both too much and too little work can have negative consequences. When
workload exceeds or fails to challenge people's abilities, they experience stress
negatively. This may lead to lower self-esteem, job dissatisfaction, nervous symptoms,
increased absenteeism and reduced participation in organizational activities.
Roles; when person does not clearly understand what others expect of him or when
there is role conflict and the employee receives contradictory expectations that cannot
be satisfied at the same time. This results in tension, dissatisfaction, withdrawal and
reduced commitment and trust in others.
Stress management: how the individual perceives occupational stressors (e.g., work
over/under load is negative; when amount of work is in balance with people’s abilities
and knowledge it is positive). Preventing negative stress outcomes either by changing
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the organizational conditions causing the stress or by enhancing employees' abilities

to cope with them.
Potential dysfunctional consequences: subjective (anxiety, apathy); behavioral

(alcoholism, drug abuse, accident proneness); cognitive (poor concentration mental
blocks, burnout); physiological (increased blood pressure and heart rate);
organizational (lower productivity, absenteeism, legal action).
Individual differences: determine the extent to which the stressors are perceived
negatively (e.g., people with strong social support or coping skills may perceive
stressors as less stressful). Two classes of individual differences:
o cognitive/affective (type A or B behavioral pattern, hardiness, social
support, negative affectivity): Type A prone to stress (e.g., put
themselves under time pressure, invest long hours working under tight
deadlines) compared to type B;
o Biological/demographic (age, gender, occupation, race).
Two methods for diagnosing stress:

- Charting stressors involves identifying organizational and personal stressors
operating in a particular situation, with the aid of questionnaires, interviews, and
hard measures (e.g., company records, medical reports etc.). Then, combine
the two sets of data to reveal which stressors contribute to most negative stress
in the particular situation. Also measuring individual differences, such as
hardiness, social support and Type A or B behavioral pattern. Measuring both
perceptions of stress and the negative consequences (e.g. moods,
performance, job satisfaction, blood pressure). This info points to specific
organizational conditions that must be improved to reduce stress and identifies
the kinds of employees that may need special counseling and training in stress
management.
- Health profiling aimed at identifying stress symptoms so that corrective action
can be taken. Starting with a questionnaire about medical history, habits,
current health etc. and physical examination. Based on data, employee’s health
profile that is outlined, including employee’s future health prospects, indicating
a health risk category, and how to reduce risks by making personal and
environmental changes (e.g., exercising). This diagnosis of the current situation
increases employees’ self-awareness of their own stress and its sources.
2. Alleviating and coping with stress to improve wellness: After diagnosing the
presence and causes of stress, the next step in stress management is to do
something about it. OD interventions for reducing negative stress tend to fall
into two groups:
- those aimed at changing the organizational conditions causing stress
- Those directed at helping people to cope better with stress.
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Both strategies are needed for effective stress management, because stress results
from the interaction between people and the environment.
Five such interventions:

1. Role clarification: helping employees better understand the demands of their
work roles. It is a systematic process from revealing others’ expectations and
arriving at a consensus about the activities constituting a particular role.
Several role clarification methods:
- First, the people relevant to defining a particular role are identified and
brought together at a meeting.
- Second, the role holder discusses his or her perceived job
duties/responsibilities, and other participants are encouraged to
comment on and to (dis)agree with the perceptions. An ODP may act as
a process consultant to facilitate interaction and reduce defensiveness.
- Third, when everyone has reached consensus on defining the role, the
role holder is responsible for writing a description of the activities. A copy
of this role description is distributed to all participants to ensure that they
fully understand and agree.
- Fourth, the participants periodically check to see whether the role is
being performed as intended and make necessary modifications.
2. Supportive relationships: aimed at employees cope with stress rather than
changing the stressors themselves. It involves establishing trusting and
genuine positive relationships among employees (e.g., team building,
intergroup relations, EI, work design, goal setting, career
planning/development). A supportive relation is the hallmark of OD. It can buffer
people from stress. When people feel that relevant others really care about
what happens to them and are willing to help, they can cope with stressful
conditions.
3. Work leaves: the potential to affect wellness through work leaves, but also can
offer employee a chance to renew and bring new experiences to the
organization
a. Paid (e.g. vacation, personal days, sabbatical) to avoid burnout and
renewing employee creativity and commitment;
b. Unpaid (leaves of absence - personal growth leaves) offer a chance to
renew and to bring new experiences to the organization, while
guaranteeing a job for them upon their return.
Such a leave is an exchange, offering the employee a chance for time
off, renewal, and pursuit of a given interest, while retaining a valued
employee for the organization.
4. Health facilities: help employees cope with stress (e.g., weight and fitness
programs). Before starting such fitness programs, employees must take an
exercise tolerance test and have the approval of a doctor. Or biofeedback
facilities in which managers take relaxation breaks using biofeedback devices
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to monitor respiration and heart rate. Some companies provide time to

meditate, or promote healthy diets and lifestyles.
5. Employee assistance programs: help individuals directly. EAPs help identify,
refer and treat workers whose personal problems affect their performance.
These programs combat alcoholism, emotional, family, marital, financial
problems and drug abuse. EAPs not only preserve the dignity of the individual,
but also recognize the organization’s right to expect certain work behaviors. An
increasing number of employees need assistance with personal problems. EAP
increases during downsizing and restructuring.
Philosophy: although organization has no right to interfere with private lives of its
employees, it does have a right to impose certain standards of work performance and
to establish sanctions when these are not met.
Results of stress management and wellness interventions

The variety of interventions makes it difficult to provide overall conclusions, but studies
about stress and any particular intervention do add up to a positive recommendation
- Role clarification reduces stress and role ambiguity and increase job
satisfaction.
- Interpersonal relationships among group members improve productivity and
quality. Organization needs to ensure that managers provide support needed
to help subordinates cope with stress.
- Fitness programs reduce stress, and might even decrease absenteeism and
turnover, and improve performance.
- EAP positively affect absenteeism, turnover and performance.
Workforce diversity interventions are designed to adapt HR practices to an

increasingly diverse workforce. OD interventions have to be adapted to a diverse set
of personal needs, preferences and lifestyles. Employee stress and wellness
interventions recognize the link between worker health and organizational productivity.
Stress management involves diagnosing stress and its causes, and alleviating
stressors and helping people to cope with stress.
Nowadays, more complex set of HR demands. OD interventions (e.g. job design,

performance management and EI) have to be adapted to the diverse set of personal
preferences, needs and lifestyles. A model for understanding work-related stress
includes occupational stressors; individual differences, which affect how people
respond to the stressors; stress outcomes; and interventions to increase wellness or
decrease stress.
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Summary Chapter 17
This chapter presented two important human resources interventions: workforce
diversity interventions and employee stress and wellness interventions. Like coaching,
career planning and development, and leadership development presented in Chapter
18, these change programs generally are carried out by human resources specialists
but have become an important part of OD practice.
Workforce diversity interventions are designed to adapt human resources
practices to an increasingly diverse workforce. Age, gender, race, sexual orientation,
disability, and culture and value trends point to a more complex set of human
resources demands. Within such a context, OD interventions (e.g., job design,
performance management, and employee involvement practices) have to be adapted
to a diverse set of personal preferences, needs, and lifestyles.
Employee stress and wellness interventions, such as work leaves and
employee assistance programs, recognize the important link between worker health
and organizational productivity. A model for understanding work-related stress
includes occupational stressors; individual differences, which affect how people
respond to the stressors; stress outcomes; and interventions to increase wellness or
decrease stress. The two main steps in stress management are diagnosing stress and
its causes, and alleviating stressors and helping people to cope with stress. Two
methods for diagnosing stress are charting stressors and health profiling. Techniques
for alleviating stressful conditions include role clarification and supportive
relationships. Means for helping workers cope with stress are developing supportive
relationships and participating in activities at health and fitness facilities. Finally, EAPs
identify, refer, and treat employees and their families for such problems as marital
difficulties, drug and alcohol abuse, emotional disturbances, and financial crises. EAPs
not only preserve the dignity of the individual but also recognize the organization’s
right to expect certain work behaviors.
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Chapter 18: Transformational change

- Describe the characteristics of transformational change
- Explain the organization design intervention for both domestic and worldwide
situations
- Learn about the integrated strategic change intervention and understand how
it represents the revolutionary and systemic characteristics of transformational
change
- Discuss the process and key success factors associated with culture change
Interventions for transforming organization change the basic character of the

organization, including how it is structured and how it relates to its environment. Those
interventions go beyond improving the organization incrementally, focusing instead on
changing the ways it views itself and the environment.
They bring about important alignments between the organization and its competitive
environment and among the organization strategy, design elements and culture.
Transformational change typically happens in response to or in anticipation of

significant environmental, technological, or internal changes. These changes are
associated with revision of firms’ business strategy, which in turn may require
modifying internal structures and processes and its corporate culture to support the
new direction. The change is aimed at competitive advantage. It is initiated by senior
line managers (who have to envision, energize, enable and engage employees in the
change), they involve multiple stakeholders, they are systematic and revolutionary and
they involve a considerable learning to implement a new paradigm. These change
programs are strategic in that they are intended to alter the relationship between an
organization and its environment, and they are intended to affect outcomes at the
organization level, including sales, profitability and culture. These interventions involve
changing the strategy and/or design of a single organization or combining or
orchestrating the activities of multiple organizations. Thus, organization transformation
implies radical changes in how members perceive, think and behave at work.
Characteristics of transformational change

Fundamentally alter the prevailing assumptions about how the organization functions
and relates to its environment - significant shifts in corporate values and norms, and
in the structures and organizational arrangements that shape member’s behaviors.
Not only is the magnitude of change greater, but it can fundamentally alter the
qualitative nature of the organization.
1. Change is triggered by environmental and internal disruptions: In most cases

organizations must experience or anticipate a severe threat to survival before
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they will be motivated to undertake transformational change. (Global warming,

social unrest and the rise of watchdog nongovernmental organizations pushing
firms to implement a variety of corporate social responsibility and sustainability
initiatives). Rapid changes in technology render many organizational practices
obsolete, pushing firms to be innovative and agile. Transformational change
occurs in response to at least three kinds of disruptions (that threaten the
existence of the organization's’ current design and the likelihood of continuing
to perform at high levels):
a. Industry discontinuities: sharp changes in legal, political, economic and
technological conditions that shift the basis for competition within an
industry;
b. Product life cycle shifts: product life cycles changes that require different
business strategies;
c. Internal company dynamics: changes in size, corporate portfolio strategy
or executive turnover.
In turn, organizations question their business strategy and missions, values, structure,
systems and procedures due to these disruptions.
2. Change is initiated by senior executives and line managers: Transformational

change is initiated by senior executives and line managers in all phases of the
change process. They are responsible for:
a. maintaining organizational character and performance; strategic
direction and operation
b. decide when to initiate the large scale change
c. what the change should be
d. how it should be implemented
e. who is responsible for directing it
Because existing executives may lack talent energy or commitment to undertake these
tasks, the organization may recruit outsiders to lead the change. Executive leadership
is critical, especially when change has to happen quickly.
Four key roles of executive leadership during change:

- Envisioning: in periods of change, when anxiety is elevated, people need to
know that everyone in the organization is committed to the new organization
and its purpose (better future). So they create and discussing the organizational
future configuration. A clear and credible vision of the new strategic orientation
is essential.
- Energizing: change is accelerated when organization members see important
and scarce resources being devoted to large-scale change tasks. Executives
need to provide necessary resources and use rewards to reinforce new
behaviors. Demonstrate personal excitement for changes and model behaviors
(e.g., behavioral integrity and credibility).
- Enabling: communication that helps people make sense of transformation.
Communicate examples of early success to mobilize energy for change. By
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showing people how certain accomplishments, results, milestones are working

together to achieve the transformation, leaders help members understand that
change can happen and is happening.
- Engaging: Executives must set new and difficult standards for performance,
and hold people accountable to those new standards. Managers must lay out
the new expectations and incentives. Sending clear signals in conversations
about the values and behaviors that will be supported in the new organization
(and what is not supported). While there must be an appropriate recognition for
past performance, there also must be enthusiastic support for the new strategy.
3. Change involves multiple stakeholders: Transformational change invariably

affects many stakeholders, including owners, managers, employees, vendors,
regulators and customers. An organizations’ current performance is the result
of tacit and explicit coordination among a variety of stakeholders. As
performance declines due to the disruptions described above, these different
stakeholders are likely to have different goals and interests related to the
change process. Must be revealed and reconciled to achieve enthusiastic
support for the change. Creation of a stakeholder map or open systems plan
facilitates this. It helps
a. document the current demands of relevant stakeholder
b. the current organizational responses to each of them
c. how stakeholder’s demands are changing
d. The implication for this change on the organizations’ mission and
strategy.
e. Involving a variety of stakeholders creates an accurate view of the
environment, organization and the change challenges.
4. Change is systemic and revolutionary: Transformational change involves

reshaping the organizational design elements and culture, these changes can
be characterized as systemic and revolutionary because the entire nature of
the organization is altered fundamentally. Change may occur rapidly so that it
does not get mired in politics, individual resistance and other difficulties. The
faster the organization can respond to disruptions, the quicker it can attain the
benefits of operating in a new way - if successful, the shift enables the
organization to experience another long period of smooth functioning until the
next disruption signals the need for drastic change. Re-alignment of the entire
organization in a relatively short period of time. All features (structure, work
design, HR and management processes) need to be changed together to
reinforce their mutual support of a new strategic direction and its desired
behaviors. If not taken into account together, misaligning design elements.
(Many organizations have experienced problems implementing team-based
structures because their existing HR systems emphasize individual based
performance). The elements of the organization architecture need to be
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changed together to support each other and the new cultural

values/assumptions
5. Change involves significant learning and a new paradigm: Organizations

undertaking transformational change are involved in second-order or gamma
types of change.
Gamma change involves discontinuous shifts in mental or organizational frameworks,

and therefore requires much learning and innovation. Members must learn new
behaviors to implement strategic directions (e.g., trying new behaviors, assessing their
consequences and modifying them if necessary). Because members usually must
learn different ways of perceiving, thinking and behaving, the learning process is likely
to be substantial and to involve a considerable amount of ‘unlearning’.
Organizational learning or continuous improvements are often used as metaphors to
help members visualize the new paradigm. Increases in technological change, in
climate patterns, concern for quality, and worker participation have led organizations
to shift their organizational paradigm. This is a transition from a command and control-
based paradigm to a commitment based or sustainability based paradigm.
New paradigm includes

- broader, more inclusive organizational goals
- leaner more flexible structures
- info and decision making pushed down
- decentralized teams and business units accountable for specific
products/customers/services
- Participative management and teamwork.
Well suited to changing conditions. Thus, a compelling vision of the future organization
and the values/norms needed to support also encourage the learning process.
Because the environment itself is likely to change during the change process,
transformational change often has no clear beginning or ending point. It is a
continuous process to keep pace with dynamic environment. Learning how to manage
change continuously - built-in capacity to fit the organization continually to its
environment
Organization design
Configures the organization’s structure, work design, human resource practices and
management processes to guide members’ behavior in a strategic direction. This
intervention typically occurs in response to a major change in the organization’s
strategy that requires fundamentally new ways for the organization to function and
members to behave. It addresses the different elements that comprise the
architecture, and seeks to aligns these components with the organization’s strategy
and fit with each other so they mutually direct and reinforce desired behavior to
execute the strategy.
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Conceptual framework
A key notion in organization design is “fit”, “congruence”, or “alignment” among the

organizational elements. The organization design model highlights the idea that the
organization is designed to support a particular strategy (strategic fit) and that the
different design elements must be aligned with each other and all work together to
guide member’s behavior in that strategic direction (design fit). The better these fits,
the more effective the organization is likely to be.
Design components:
- Business strategy: determines how the organization will use its resources to
gain competitive advantage (e.g. cost-minimization or innovation strategy).
Strategy sets the direction for the organization design by identifying criteria for
making design choices, and organization capabilities needed to make the
strategy happen, and achieve its objectives in the short to medium term).
- Structure: how organization divides tasks, assigns them to departments, and
coordinates across them; chain of command (where formal power and authority
reside and how departments relate to each other). Structures can be highly
formal and promote control and efficiency (e.g., functional structure) or loosely
and flexible and favor change/innovation (matrix, processes, network
structures).
- Work design: specifies how tasks are performed and assigned to jobs or groups
to add value (e.g., enriched jobs and self-managed teams vs. traditional jobs
and groups with standard tasks). That is, work and organization design must
be aware of the underlying processes that transform inputs into valued outputs.
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- HR practices: selecting people and training, developing and rewarding them.

Also involve recruiting. E.g. these methods/practices can be oriented to hiring
and paying people for specific jobs, training where necessary, and rewarding
individual performance; or select people to fit organization culture, continually
develop them, and pay for learning multiple skills and contributing to
organization success.
- Management processes: Describe how goals are set, how decisions are made,
how resources are allocated and how info and knowledge is stored and
communicated (transparent and shared freely or tightly controlled and
centralized). (Use command and control style that relies on hierarchical
authority or utilize participative methods for EI). Info can be tightly controlled
and centralized; or it can be transparent and shared freely throughout the
organization.
Basic design alternatives

These design components can be configured into two radically different organization
designs:
1. Mechanistic (e.g., McDonalds):
a. supporting efficiency and control
b. focused on competing on price
c. functional structure - employees performing similar tasks are grouped
together for maximum efficiency
d. managerial hierarchy that controls and coordinates
e. minimal skill variety and decision making
f. traditional jobs and work groups (standardized)
2. Organic (e.g., Google):
a. promoting innovation and change
b. all design elements are geared to getting employees directly involved in
the innovation process, facilitating interaction among them, developing
and rewarding their knowledge and expertise, and providing them with
relevant and timely information
c. flat, lean structure.
Now, competitive conditions require many organizations to be flexible, fast and
inventive. Thus, organization design is aimed more at creating organic designs, both
in new start-ups as in existing firms that reconfigure mechanistic designs to make them
more organic. Designing new organizations is easier than redesigning existing one in
which multiple sources of slowness and resistance may exist. It is important that the
design elements fit together and reinforce each other to promote a high-performance
organization.
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Worldwide organization design alternatives

Driven by competitive pressures, lowered trade barriers, increased knowledge work,
and advances in info technologies, the number of companies developing or offering
products/services in multiple countries continues to rise.
- Worldwide organizations offer products/services and actively manage direct
investments in more than one country
- They must balance product and functional concerns with geographic issues of
distance, time and culture
- They must carry out coordinated activities across cultural boundaries using
expatriates, short-term and extended business travelers, and local employees.
- They must relate to variety of demands, such as unique product requirements,
tariffs, value-added taxes, governmental and environmental regulations, labor
practices, transportation laws, and trade agreements, and adapt their HR
policies and procedures to fit different cultures - increases organization
complexity.
Two dimensions/success factors are useful in guiding managerial decisions about

choices in arrangement of products/services, organization, and personnel:
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1. Need for global integration: refers to whether or not business success requires
tight coordination of people, plants, equipment, products/service deliverable on
a worldwide basis → flow of goods.
2. Local responsiveness: extent to which business success is dependent on
customizing products/services, support, packaging, and other aspects of
operations to local conditions.
The international design

- Sell existing products/services to non-domestic markets
- Goals of increased foreign revenues
To support this, an international division is given responsibility for marketing, sales and
distribution, although it may be able to set up joint ventures, licensing agreements and
manufacturing plants. Organization retains its original structure and operating
practices. But management processes in division are looser, since the organization
recognizes the newness of the venture and gives the division some time to learn about
operating in a foreign context. Implementing the international orientation:
- OD facilitates extending the existing strategy into the new market
- Cross-cultural training and strategic planning
- Success requires coordination between the parent company and the small
number of foreign sales and marketing offices in chosen countries.
- Similarly, local responsiveness is low because the organization typically
exports the same products/services offered domestically.
Finally, roles in the new international division are staffed with volunteers from the
parent company, often with someone who has appropriate foreign language skills,
experience living overseas, or eagerness for an international assignment. Little
training or orientation for the position is offered, since organization is generally
unaware of the requirements for being successful in international businesses (often
used design for start-ups international).
The global design

Global strategic orientation (high on global integration, low on local
responsiveness):
- Centralized with a global product structure
- Goals of efficiency through volume
- Management processes tend to be formal with local units reporting sales,
costs and other data directly to the CEO/president.
- HR policy integrates people into the organization through ethnocentric
selection and staffing - personnel from the home country in foreign positions.
Implementing the Global Orientation
- OD supports career planning, role clarification, employee involvement, conflict
management and senior management team building to help achieve improved
operational efficiency.
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- OD helps the organization transition to global integration from local

responsiveness.
- Belief that products/services, support, distribution, or marketing activities can
be standardized (thus, worldwide market is homogenous).
- Strategy of marketing standardized products in different countries.
- Appropriate when there is little economic reason to offer products/services with
special features or locally available options (e.g. computer elements,
everywhere the same).
- Close physical proximity of major functional groups and formal control systems
that balance inputs, production, and distribution with worldwide demand
supports global integration.
Goal of efficiency dominates the design choices for this orientation. Production
efficiency is gained through volume sales and a small number of large manufacturing
plants. Managerial efficiency is achieved by centralizing product design and
manufacturing, distribution and marketing decisions. Ethnocentric policies support
global orientation: expatriate managers are more likely than host-country nationals to
recognize and comply with the need to centralize decision making and to standardize
processes, decisions, relations with the parent company.
The multinational design

- Operate a decentralized, global division structure: each region division reports
to headquarters but operates autonomously and controls own resources.
- Goals of local responsiveness through specialization
- Product line that is tailored to local conditions and is best suited to markets that
vary significantly from region to region.
- Differentiated and loosely coordinated corporate structure.
- Operational decisions, such as product design and marketing, are integrated at
the local level.
- Planning decisions are centralized at headquarters to achieve important
efficiencies necessary for worldwide coordination of emerging technologies and
of resource allocation.
- People are integrated in multinational firms through polycentric/region-centric
personnel policies: belief that host-country nationals can understand native
culture most clearly.
Implementing the Multinational Orientation

- OD helps with intergroup relations, local management selection and team
building
- OD facilitates management development, reward systems, and strategic
alliances.
Decision to favor local responsiveness over global integration must support the belief
that worldwide markets are heterogeneous (success requires customized and
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localized products/services, support, distribution, or marketing activities) à strategy

that is different from global strategic orientation.
Distinction polycentric and region-centric selection process:

- polycentric policy: a subsidiary represents only one country
- region-centric policy: the organization takes a slightly broader perspective and
regional citizens (e.g. European instead of Italian or English) fill key positions.
The transnational design

- Tailored products with both efficient and responsive operations.
- Goals of learning and responsiveness through integrations
- Key goal is learning.
- People are integrated into transnational firm through a geocentric selection
policy that staffs key positions with the best people, regardless of nationality.
Implementing the Transnational Orientation

- Extensive selection and rotation
- Acquire cultural knowledge and develop intergroup relations
- Build corporate vision
- Sophisticated info systems are needed, because of the heavy communication
and logistic demands needed to operate these structures.
Reflects the belief that products and services should be developed, produced, or
distributed in the places where it makes the most sense but customized to sell
anywhere. Skills, resources, and knowledge can be moved to regions where they are
needed. Combine the best of global and multinational design and add a third capability
- the ability to transfer resources both within the firm and across national and cultural
boundaries. Organizes themselves into global matrix and network structures
especially suited for moving info and resources to their best use (the network structure
treats each local office, including headquarters, product groups, functions, call centers,
and production facilities, as self-sufficient nodes that coordinate with each other to
move knowledge and resources to their most values place).
Organizational learning practices gather, organize and disseminate the knowledge

and skills of members who are located around the world. Recognizes that the unique
capability of transnational firm is its capacity to optimize resource allocation a
worldwide basis. Recruits at any of the foreign locations are screened not only for
technical qualifications but for personality traits that match the company's cultural
values - hire person that fits strategy (and not trained to fit the strategy in later stages).
Application stages
Applied to whole organization or subpart/unit. Start from a new organization or
reconfigure existing organization design. Steps feeding back on each other
(interactive) and require continual revision as the process unfolds. Organization design
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interventions typically involve a team of ODP's with broad expertise in business

strategy, organization structure, work design, HR practices, and management
processes. Works closely with senior executives who are responsible for strategic
direction and leading the design intervention.
1. Diagnosing the Current Design

- Assess the current performance and alignment of design features and
examine the new strategy and objectives to determine what organization
capabilities are needed to achieve them. For worldwide designs, careful
analysis of the required levels of global integration and local responsiveness
is needed.
- Identify which design elements will receive most attention and the likely
magnitude and time framing of the design process.
2. Designing the Organization
- Describe and configure the organization design components (strategy-
structure-work) to support the business strategy and objectives then specify
the management and human resource practices that supports the new
structure
- Most effective design sequence is to first identify work processes and
designs that will best add value to customers and other stakeholders
according to the strategy. Based on this, alternative structures should be
debated among the design team and executives (ODP's help with this
difficult decision; since no structure is perfect/have certain strengths and
weaknesses).
- Next step is specifying the management processes and HR practices that
will compliment and support the strategy-structure-work designs. These two
are well suited to address weaknesses in the chosen structure. The resulting
design usually falls somewhere along the continuum from mechanistic to
organic. Broader set of organization members participates in these
decisions. Thus, this stage results in an overall design.
3. Implementing the Design
- Puts the new structures, practices and systems into place, draws heavily
leading and managing change methods.
- Interventions can place heavy demands on organization resources and
leadership expertise.
- Members must be motivated to implement the new design; all relevant
stakeholders must support it. Proceed in phases - transition management.
- Organization design interventions often entail significant new work
behaviors and relationships that require extensive and continuous
organization learning.
Transition from domestic to global or multinational designs is an important period in

an organization development. Represents significant shift in strategic breadth. ODP's
can play an important role in making the transition smoother and more productive by
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maintaining focus on the systemic nature of the change and applying the appropriate
human process, techno structural, and HR interventions (apply HR interventions to
train and prepare managers and their families for international assignments and
develop selection methods and reward systems relevant to operating internationally).
But these shifts present a challenge for the ODP because polycentric selection policies
can produce management teams with different cultures at each subsidiary. A program
developed for one subsidiary may not work with another.
From global/multinational to transitional design particularly a very complex strategic

change effort, since it requires the acquisition of two additional capabilities:
- First, global organizations need to learn to trust local management teams,
and multinational organizations need to become better at coordination
(cross-functional info exchange and decision making).
- Second, both types of organization need to acquire the ability to transfer
resources efficiently around the world.
In the transition from global to transnational, the administrative challenge is to

encourage creative over centralized thinking and to let function areas contribute and
operate in a way that best suits the context. OD interventions that can help this
transition include training efforts that increase tolerance for differences in management
practices, control systems, PA, and policies and procedures; reward systems that
encourage entrepreneurship, coordination, and performance at each location; and
structural changes at both corporate office and local levels.
In the transition from multinational to transnational design, products, technologies, and

regulatory constraints can become more homogeneous and require more efficient
operations. The need to balance local responsiveness against the need for
coordination among organizational units is new to multinational firms. They must
create interdependencies among units through:
- the flow of parts, components, and finished goods;
- the flow of funds, skills and other scarce resources;
- The flow of ideas and knowledge.
Integrated strategic change

Is a deliberate coordinated process that leads to gradually or radically systemic re-
alignments between the environment and a firm’s strategic orientation resulting in
improvement in performance and effectiveness. OD intervention that extends
traditional OD processes into the content-oriented discipline of strategic management
and describes how to conduct a systemic and revolutionary change program. It is a
comprehensive intervention aimed at single organization or unit, and suggests that
business strategy and design must be aligned for responding to complex and uncertain
environmental pressures/disruptions. It gives equal weight to the strategic and
organizational factors affecting organization performance and effectiveness. In
addition, these factors are highly integrated during the process of assessing the
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current strategy and organization design, selecting the desired strategic orientation,
developing a strategic change plan and implementing it. A strategic change plan helps
manage transition between current strategic orientation and desired future strategic
orientation.
The predominant paradigm in strategic management - formulation and implementation

– artificially separates strategic thinking from operational and tactical actions; it ignores
the contributions that planned change processes can make to implementation. In a
traditional process, senior managers and strategic planning staff prepare economic
forecasts, competitor analyses and market studies. They rationally align the firm’s
strategic strengths and weaknesses with environmental opportunities and threats to
form organization strategy.
Implementing new strategy (top-down approach), with little understanding of need for
change and little ownership by members of new behaviors required to achieve
announced objectives.
Key features of integrated strategic change (more integrated, comprehensive and

participative than traditional strategic management):
- Strategic Orientation: comprising its strategy and organization design.
Organization business strategy and design features that support it must be
considered as integrated whole.
- Creating the Strategic Plan: gain commitment and support, plan its
implementation and execute it. This strategic change capability is valuable, rare
and difficult to imitate. Thus, strategic change capability represents a
sustainable competitive advantage.
- Integrating Individuals and Groups into the planning and implementation
Process:
o to create a more achievable plan
o to maintain the firm's strategic focus
o to direct attention and resources on the organization’s key competencies
o to improve coordination and integration within the organization
o To create higher levels of shared ownership and commitment.
Application stages
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1. Performing the Strategic Analysis

a. Assess the readiness for change and top management’s ability to carry
out change;
b. Diagnose the Current Strategic Orientation.
c. Actively involves organization members (commitment and ownership).
d. The use of large group conferences, employee focus groups, interviews
with different stakeholders allow a variety of employees and managers
to participate in the diagnosis and increase relevance of the data.
The strategic analysis begins with a diagnosis of the organization’s readiness for
change and its current strategy and organization design. The most important indicator
of readiness is senior management’s willingness and ability to carry out strategic
change. When there is no readiness when it's necessary, team-building and coaching
intervention should be considered to align the commitment of senior management.
The second stage in strategic analysis is to understand the current strategy and
organization design by examining organization industry and its current financial
performance and effectiveness. This info provides necessary context to assess the
current strategic orientation viability. (E.g., Porter's industry attractiveness model and
environmental frameworks should be used to look at both current and likely future
environments).
The organization design is described by the structure, work design, info system and
HR system. Organization objectives, policies and budgets signal which parts of the
environment are important, and allocate and direct resources to particular
environmental relationships. The organization design features should be used to
assess the likely sources of customer dissatisfaction, product/service offering
problems, financial issues, disengagement and other outcomes.
2. Exercising Strategic Choice: This step is the content of the strategic change.
Top management determines the content of the strategic change. Analysis
might reveal misfits among organization environment, strategic orientation and
performance that can be used as inputs for crafting future strategy and design.
Based on analysis, senior management formulates visions and strategies for achieving
those, and develops alternative future scenarios. Senior management defines two or
three alternative sets of strategies and objectives. Other stakeholders are involved,
but top management decides (since they have a general position; when delegated to
lower levels, the risk of focusing too narrowly on product market or technology exists).
The desired strategy defines: - the ideal breadth of products/services and markets;
- the aggressiveness with which these outputs will be pursued
- the differentiators to be employed
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The desired organization design specifies the structures and processes needed to
support the new strategy. Aligning organization design with particular strategy can be
major source of superior performance and competitive advantage.
3. Designing the Strategic Change Plan: Development of a comprehensive

agenda to achieve the change in strategy and design. Represents the process
of strategic change. Change plan describes the types, magnitude and schedule
of activities, as well as costs associated with them. Also specifies how changes
will be implemented, given power and political issues, the nature of organization
culture and the current ability of the organization to implement change.
4. Implementing the Strategic Change Plan: Draws heavily on knowledge of

motivation, group dynamics and change processes (deal with alignment,
adaptability, teamwork and learning). Members must be supported to prepare,
achieve and institutionalize change. Requires senior managers to champion the
different elements of the change plan:
- to effect change quickly
- to hold people accountable to the change objective
- to institutionalize the changes
- to be prepared to solve problems if they arise
However, no strategic change plan can account for all of the contingencies that
emerge. There must be willingness to adjust the plan to address unpredictable events
and take advantage of new opportunities.
Culture change
Transformational change interventions generally include diagnosing the organization’s
culture to assess its fit with current or proposed business strategies. Well-managed
and well-conceived organization culture, closely linked to an effective business
strategy, can make a difference between success and failure in today’s demanding
environments.
Elements of culture
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The meanings attached to these elements help members make sense out of everyday
life in the organization; they signal how work is performed and evaluated, and how
employees are to relate to each other and significant others, such as customers,
suppliers, and government agencies. The cultural pattern describes how the
organization solves problems and teaches newcomers how to behave. Outcome of
prior choices and experiences with strategy and organization design: what really
matters, how we do things around here and what we do when a problem arise.
Diagnosing culture poses three problems:

1. Organization members generally take cultural assumptions for granted and
rarely speak of them directly;
2. values and beliefs come in two forms:
- espoused values (declared openly as important)
- values-in-use (values that actually drive behavior)
Often discrepancy between those two;
3. Assumptions may not be shared widely and differ across groups within the
organization: all relevant groups need to be identified.
A comprehensive approach to describing and diagnosing culture emphasizes all four

elements that guide member behavior and have a powerful impact on the organization
effectiveness. Begins with the most tangible level of awareness and works down to
the deep assumptions.
Defining and Diagnosing Organizational Culture

1. Artifacts: highest level of cultural manifestation; visible symbols of the deeper
levels of organization culture. Includes members’ behaviors, clothing and
language; and organization structures, systems, procedures and physical
aspects (e.g. office space layouts).
Behavioral approach:
- One diagnostic method is asking groups of people to generate lists
of language patterns, clothing norms, office arrangements and
design features - can provide great deal of info about real culture.
The difficulty in their use during cultural analysis is interpretation - an
outsider does not know what artifact represents.
- Second method emphasizes the pattern of behaviors that produce
business results: assesses key behaviors that can be observed.
Observations of how tasks are performed and relationships
managed. These perceptions can reveal number of common
behaviors.
2. Norms and values: a deeper level of diagnosis. Norms guide how people should
behave in a situation. They are unwritten rules of behavior. Norms are inferred
from observing how members behave and interact. Values are about what
ought to be in the organization. Values tell members what is important and what
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deserves their attention. Values are deeper in awareness than norms. Norms
and artifacts support the values.
Competing values approach: Method for values is looking specifically at
how the organization resolve a set of value dilemmas
Two terms of important value pairs (each consisting of contradicting values placed at
opposite ends of continuum)
- internal focus and integration vs. external focus and differentiation
- flexibility and discretion vs. stability and control.
This approach collects data about these conflicting values/demands that organizations
continually struggle to satisfy, with the aid of survey (too much focus on external issues
may neglect internal efficiencies). Provides measures of where an organization’s
existing values fall along each of the dimensions (clan, adhocracy, hierarchical and
market culture).
3. Deep assumptions of culture: deepest level of cultural awareness. Taken-for-

granted assumptions about how organization problems should be solved; they
tell members how to perceive, think and feel. Non-confrontable and non-
debatable assumptions about relating the environment and about human
nature, activity and relationships.
Deep assumptions approach: One method involves an interviewing process
involving both outsiders and insiders, to create jointly a formal description of
assumptions underlying the organization culture. Second method brings
together a group of people for a culture workshop (old and new members,
senior management etc.) - brainstorm about artifacts, norms/values and identify
the assumptions that would explain the constellation of often conflicting norms
and values and artifacts. Basic assumptions are difficult to articulate - great deal
of process consultation skill is required in ODP's to help identifying them.
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In summary: Culture is defined as the pattern of artifacts, norms, values and basic
assumptions about how to solve problems that works well enough to be taught to
others. Culture is a process of social learning; it is the outcome of prior choices about
and experiences with strategy and org design. It is also the foundation of change and
can either facilitate or hinder organizational transformation.
Organization culture is shared by organization members. Culture can affect strategy
formulation and implementation, and firm’s ability to achieve high levels of
performance. Culture change involves helping senior executives and administrators
diagnosing the existing culture and make necessary alterations in the basic
assumptions and values underlying the organizational behaviors
Implementing the culture change process - application stages

Debate about whether changing something as deep-seated as organization culture is
possible. Some argue that unless the deeper values and assumptions are changed,
organizations have not really changed their culture. Those arguing that implementing
culture change is extremely difficult, if not impossible, focus on the deeper elements
of culture, because these elements represent assumptions about organization’s life:
members do not question them and have a difficult time envisioning anything else.
Moreover, members may not want to change their cultural assumptions. Culture
provides strong defense against external uncertainties and threats; so anxiety to
change. People may have developed personal stakes, pride and power in the culture.
And cultures that provide firms with a competitive advantage may be difficult to imitate,
thus making it hard for less successful firms to change their cultures to approximate
the more successful ones.
So, only use this type of change when other, less difficult and costly solutions are ruled
out.
Several stages:
1. Formulate a clear strategic vision: clear vision of firm’s new strategy and of
shared values and behaviors needed. Vision provides purpose and direction for
cultural change. Useful approach is development of a statement of corporate
purpose, listing in straightforward terms the firm's core values.
2. Display top-management commitment: cultural change must be managed from
the top of the organization; they have to be strongly committed to the new
values and need to create constant pressure for change. They must have the
staying power to see changes through. Especially important in key leadership
positions, where people's actions can significantly promote or hinder new
values and behaviors. Also need to socialize newly hired people into the new
culture, since people are most open to organizational influences during the
entry stage.
3. Model culture change at the highest levels: senior executives must
communicate the new culture through their own actions. Their behaviors need
to symbolize the kinds of values and behaviors sought.
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4. Modify the organization to support organizational change: cultural change

generally requires supporting modifications in organization structure, HR
systems, information and control systems, and management styles. These
organization features can help to orient people’s behaviors to the new culture.
They can make people aware and encourage performance of the behavior
required (e.g. CEO meets members to ensure behavior and importance).
5. Select and socialize newcomers and terminate deviants: one of most effective
methods for changing corporate culture is to change organization membership.
Select and terminate people in terms of their fit with new culture.
6. Develop ethical and legal sensitivity: cultural change can raise significant
tensions between organization and individual interests, resulting in ethical and
legal problems for practitioners (e.g. values regarding control equity and job
security).
Summary chapter 18:

In this chapter, interventions were presented for helping organizations initiate and
implement transformational change. Transformational changes typically happen in
response to or in anticipation of significant environmental, technological, or internal
changes; senior line managers initiate them; they involve multiple stakeholders; they
are systemic and revolutionary; and they involve considerable learning to implement
a new paradigm.
Organization design involves the organization’s structure, work design, human
resources practices, and management processes. It aligns these components with the
organization’s strategy and with each other so they mutually direct behavior to execute
the strategy. In domestic settings, this usually results in organization designs that vary
along a continuum from mechanistic to organic depending on the requirements of the
firm’s strategy. In worldwide settings, organization designs need to address the
requirements for global integration and local responsiveness. Organization design
interventions typically start with assessing the organization to clarify the current
design’s fitness and the changes required. Then the design components are
configured to support the organization’s strategy. Finally, implementation involves
putting the new structures, practices, and systems into place using many of the
methods for leading and managing change described in chapter 8.
Integrated strategic change (ISC) is a comprehensive intervention for
responding to complex and uncertain environmental pressures. It gives equal weight
to the strategic and organizational factors affecting organization performance and
effectiveness. In addition, these factors are highly integrated during the process of
assessing the current strategy and organization design, selecting the desired strategic
orientation, developing a strategic change plan, and implementing it.
Transformational change as well as other large scale organizational changes
may require modifications of organization culture. Organization culture includes the
pattern of basic assumptions, values, norms, and artifacts shared by organization
members. It influences how members perceive, think, and behave at work. Culture
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affects whether firms can implement new strategies and whether they can operate at
high levels of excellence. Culture change interventions start with diagnosing the
organization’s existing culture. Changing corporate culture can be extremely difficult
and requires clear strategic vision, top-management commitment, symbolic
leadership, supporting organizational changes, and selection and socialization of
newcomers and termination of deviants.
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Chapter 19: Continuous change

- Compare and contrast four continuous change organization development
interventions
- Describe the elements and processes associated with the dynamic strategy-
making intervention
- Define the demands of turbulent environments and describe the self-design
intervention
- Outline the definition and application of organization learning interventions
- Explain the logic and process of developing built-to-change organizations
Continuous change processes:

- Are aimed at the growing number of organizations facing highly turbulent
environments e.g. technology and entertainment sectors where timing is critical,
technological change is rapid and competitive pressures are unpredictable
- Address the underlying structures and activities for generating new forms of
competitive advantage
- Focus on learning, changing and adapting
- Are all about producing a constant flow of new strategies and designs, not
transforming existing ones
Dynamic capabilities are needed (instead of standard sources of competitive

advantage e.g. strategic positioning and core competencies) enabling the organization
to renew forms of competitive advantage constantly to adapt to changing
environments.
Dynamic strategy making

- Uses a process of “guided involvement” to help organizations implement a
strategic system (made up of a statement of strategic direction and a repeatable
strategic process.
- A deliberate and coordinated process that leads to continuous realignments
between an organization and its environment, creating a continuous strategic
change process to improve performance and effectiveness over time.
Effective strategic change process

1. Speed over delay
- New opportunities and threat require immediate strategic action
2. Breadth over narrowness
- Unpredictable and complex conditions require expansive thinking and
openness to innovative ideas
3. Flexibility over rigidity
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- Organizations must discover new solutions, adjust priorities and reallocate

resources constantly
4. Empowerment over autocracy
- Strategy cannot remain the sole domain of top management
5. Simplicity over complexity
- Strategy needs to be specific enough to be acted on but not so detailed that
members cannot respond and improvise as situations change
6. Unity over fragmentation
- Strategy must promote consistent and integrated action – spreading over
countries, markets and businesses can cause fragmentation, loss of
coordination and deviations from intended strategy
Conceptual framework
- Views strategy as a central concept that permeates the organization rather

than another element to be aligned with other parts.
- The strategic system is the core of dynamic strategy making – it includes
strategy content in the form of strategic direction and a strategic process for
developing and executing the strategy.
- Specific issues addressed in the strategic system come from situational
assessments of the organization and its environment.
- Assessments and data collection have to keep pace with change because
results of strategic analysis in fast-moving environments have a short shelf
life.
Statement of Strategic Direction

- Primary outcome from the situational assessment
- Forms the organization’s competitive logic, goals, design and action plan
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- A written statement such as this avoids future misunderstandings and

provides a clearer way to articulate content with members and stakeholders
Four elements:
Competitive Logic
- A value propositions that connects the firm’s capabilities to market opportunities
- Describes how the firm will compete in the marketplace, its market position and
customer tiebreakers
- Market position – best scenario is having capabilities to deliver value in ways that
cannot be matched by competitors; can use SWOT analysis or resource-based
view to determine
- Customer tiebreakers – differentiators that attract and retain customers e.g. brand
characteristics or after-sales support (must deliver on these for competitive logic to
be effective)
Goals
- Unifying target for achievement
- Separated into financial goals and a single rallying goal
- Financial goals – direct effort and measure progress; a few specific and clear goals
help unify and motivate employees to make the strategy happen
- Single rallying goal – motivates workforce to embrace the strategy, especially when
it involves abstract financial goals; once goals are achieved, these can be dropped
and new ones set and added to the statement
Organization
- Formal organization design which aligns, work, structure, HR practices and
management processes to the competitive logic and goals
- Challenge is to build organizations that are both agile and reliable
- Most important design feature are the ones that realize competitive logic e.g.
structural changes, new departments, new reward system encouraging new
behavior
Action Plan
- Initiatives and specific steps required to implement the strategy
- Sets priorities and spells out what needs to happen over a specific timeframe
- Initiatives that divert energy from key goals or design changes, make accountability
vague or cause employees to lose focus should be eliminated
Strategic Process
- Involves identifying relevant stakeholders to be involved in the strategy-making
process and engaging them in highly interactive conversations and debates about
the organization’s strategic direction and how to move forward
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- In uncertain environments, strategic process must promote both quickness and

participation
Application stages
1. Choosing relevant stakeholders

- Ensures strategic system results in a more realistic formulation of the strategy
and the commitment necessary to support its implementation
- Examples include board of directors, union officials and customers
2. Holding the first retreat
- Purpose – create an initial draft of the statement of strategic direction
- Before the session, participants provide perceptions on strengths,
opportunities, threats and weaknesses through personal interviews – important
because they will be the primary input to strategy conversations
- Three primary discussions based on the data – understanding the data,
formulating competitive logic and goals, and preparing for broader
organizational involvement
3. Engaging stakeholders between the first and second retreats
- Senior managers reflect on their work and perform reality tests on the validity
of assumptions in the statement – primary method is through feedback on the
draft from other stakeholders
- Interim meetings are held to review draft competitive logic and goals
- The reactions from these meetings are incorporated into a redraft by a
designated member of the retreat team
4. Holding the second retreat
- Purpose – review feedback, finalize competitive logic and goal statements, and
complete statement of strategic direction
- Total group reviews and discusses input from stakeholders and builds
consensus regarding competitive logic and goals
- To ensure discussions do not derail and involve organizational politics, best
practice suggests defining the design logic and recommending preferred
alternatives to senior management
- Outcome – an outline and action plan for implementing the new strategy; key
strategic initiatives are outlined
5. Implementing actions
- Several options for moving forward but all involve pursuing the statement of
strategic direction
- Statement of strategic direction must be communicated and built into the
organization’s performance management system
- Dynamic strategy making requires exceptional leadership – must support the
creation, execution and refinement of the organizational strategy, modelling the
behaviors of the strategic statement
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Self-designing organizations
The capability to alter themselves fundamentally and continuously, achieving high

performance in competitive and changing environments.
Creating them is a highly participative process in which multiple stakeholders set
strategic direction, design appropriate structures and processes, and implement them.
This intervention includes considerable innovation and learning as organizations gain
the capacity to design and implement significant changes continually.
Intervention involves cycles of diagnosing, designing and implementing activities that

managers and employees at all levels of the organization can carry out. Focuses on
all features of the organization (e.g. HR practices, work design) and designs them to
support the strategy. This approach is flexible and can be used in both evolutionary
and revolutionary change contexts.
The demands of turbulent environments
To be effective in these environments requires a coordinated organizational response.

Large-scale change needs to occur at multiple levels of the organization if new
strategies are to result in changed behaviors throughout the system. Self-design
processes help members to change the organization systematically – top
management formulate a strategy and clarify a vision, lower levels put this into
operation by creating structures, procedures and behaviors. In turbulent environments
change is constant and the direction of change is unclear – structures must be
continually modified and the change process has to be dynamic and iterative; need to
translate general prescriptions of change into specific structures and behaviors, which
requires on-site innovation and learning by doing. The self-design process suggests
the way the organization thinks about and prepares for change determines whether
the change will be implemented expediently and successfully
The self-design process:
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Application stages
1. Clarifying the strategy

- Makes strategic objectives clear, translates strategy into descriptions of
breadth, aggressiveness and differentiation
- Unclear strategy = unfocused organizational design
2. Laying the foundations
- Provides basic knowledge and info to design team needed to get the change
underway
- Three activities – valuing (determining beliefs and values to guide the
change process), acquiring knowledge (about how the organization’s
function, high performance achievement principles and the self-design
process), and diagnosing (current organization status and what needs to be
changed to enact strategy – look for incongruities between its functioning
and its valued performance and conditions)
3. Creating design criteria
- Developing the principles and standards to guide the new organizational
design
- Design criteria are important milestones and are action orientated, specific
and measurable, future orientated, and linked to creating a strategic
advantage
- Examples – facilitate fast reaction to market changes, optimize resource
leverage and utilization, eliminate redundant work
- Effective and objective standard for evaluating alternative design options
4. Designing
- Alternative organizational designs and innovations generated to reflect
strategy, values and design criteria
- Only broad parameters meaning extent to which strategy is met can be
assessed and allows other groups to tailor the design to local conditions
- This stage results in an overall design for the organization, detailed designs
for the components and preliminary implementation plans for how
everything will fit together
5. Implementing and assessing
- Putting into place the new structures, practices and systems
- Includes an on-going cycle of action learning – changing structures and
behaviors, assessing progress and making necessary modifications
- Info about how well it is working and progressing is collected and used to
make necessary adjustments
Learning organizations
Aimed at helping organizations develop and use knowledge to change and improve
constantly - attention to the cognitive aspects of learning and how members can
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become more effective learners; changes behaviors by changing the way people solve
problems and address opportunities.
Conceptual Framework
Organizational learning (OL) emphasizes the structures and social process that
enable employees to learn and share knowledge - can be a source of strategic
renewal, allowing faster absorption of information than competitors, meaning a
sustained competitive advantage; related to HR function.
Knowledge learning focuses on tools and techniques enabling organizations to
collect, organize and translate info into useful knowledge; related to information
systems function.
Individual or organizational level? - Individuals do learn in originations but that learning

may or may not contribute to OL; learning is organizational if, e.g. it is done to achieve
organizational purposes or is shared among organizational members.
OL interventions address how organizations can be designed to promote effective

learning processes, and how these processes can be improved.
Knowledge management practices operate on the outcomes of learning processes -
on how strategically relevant knowledge can be organized and used through the
organization.
How OL affects performance:
Organization Learning Interventions
Learning organizations - skilled at creating, acquiring, interpreting, transferring, and

retaining knowledge, and at purposefully modifying its behavior to reflect new
knowledge and insights.
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Categories of organizational design that reinforce learning:

● Structure - emphasizes teamwork, fewer layers, strong lateral relationships and
networking across organizational boundaries
● Work design - favor enriched jobs and self-managed teams; support the sharing
of info and continuous competency development.
● HR practices - recruit those with high needs for achievement, change
expectations and ambiguity tolerance; performance appraisal, rewards and
training account for long-term performance and knowledge development;
leaders actively model openness, risk taking, and reflection necessary for
change.
● Management processes - facilitate rapid acquisition of knowledge, processing
and sharing of rich, complex info and enable people to manage knowledge for
competitive advantage.
Organization Learning Processes
OL processes consist of four activities: (1) discovery (errors and gaps identified
between desired and actual conditions), (2) invention (devising solutions to close the
gap), (3) production (implementing solutions) and (4) generalization (drawing
conclusions)
Apply processes by three types of learning:

1. Single-loop or adaptive learning
a. Improving the status quo
b. Most prevalent learning process enabling gaps between desired and
actual conditions to be reduced
c. Can produce incremental change in how organizations function
2. Double-loop or generative learning
a. Changing the status quo
b. Learn how to change existing assumptions and conditions
c. Can lead to transformational change
3. Deutero-learning
a. Learning how to learn
b. Directed at the learning process itself and seeks to improve how
organizations perform single and double-loop learning
Application Stages
1. Discover theories in use and their consequences - techniques involve dialogue

(involves members in exchanges about how they currently address problems and
make decisions and interact with stakeholders), system thinking (set of concepts
and tools for detecting subtle but powerful structures that underlie complex
situations - can help members understand unknown forces and their behavioral
consequences), left-hand, right-hand column (member selects specific situation of
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interaction that produced ineffective results; reveals hidden assumptions that guide
behavior), ladder of inference (aids in understanding how concrete experiences
are connected to the assumptions and beliefs that guide behavior; description of
action producing unintended results and work down the ladder to see the
underlying reasons).
2. Invent and produce more effective theories in use - members learn by doing
but there is a strong tendency for members to revert to habitual behaviors and
modes of learning; barriers of change can be discussed openly with an OD
practitioner and this shared insight can lead to subsequent experimentation which
can produce effective change because the errors that occur when trying new things
can be discussed and corrected
3. Attend to the knowledge management practices that support learning -

organizational knowledge plays a crucial role in linking OL processes to
organizational performance; (1) generating knowledge (understand organizational
strategy and identify knowledge that will create the most value; create mechanisms
for acquiring or creating the knowledge e.g. communities of practice, which are
informal networks among employees of similar roles to share expertise and solve
problems together), (2) organizing knowledge (putting knowledge into a readily
usable form e.g. codification for explicit knowledge and personalization for tacit
knowledge) (3) distributing knowledge (develop mechanisms to gain access to
needed knowledge, making it easy to find and reusable).
4. Continuously monitor and improve the learning process - involves Deutero-

learning; includes assessing OL strategies and the organizational structures that
contribute to them.
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Built to change organizations (B2C)
- Involves intentionally designing an entire organization for change and not stability
- Many change efforts are unsuccessful because most organization design features
assume stability equals effectiveness but in fast-changing environments, ability to
continually change is the most sustainable source of competitive advantage
Design Guidelines
From strategy to strategizing

- Short-term, static environmental scans and industry analyses  long-term,
alternative scenarios and contingency planning
- Pursuit of a sustainable competitive advantage  pursuit of a series of
momentary advantages
From design to designing

- Focus on efficiency over effectiveness  Focus on effectiveness over
efficiency
- What do we do well?  What do we need to learn?
- Alignment as the key to performance  Change as the key to performance
Design guidelines for B2C Organizations:
From traditional principles… To dynamic principles

Strategy Strategizing
- Short-term, static - Lon-term, alternative
environmental scans and scenarios and contingency
industry analyses planning
- Pursuit of a sustainable - Pursuit of a series of
competitive advantage momentary advantages
Design Designing
- Focus on efficiency over - Focus on effectiveness over
effectiveness efficiency
- What do we do well? - What do we need to learn?
- Alignment as the key to - Change as the key to
performance performance
Application stages
1. Reframe culture as a facilitator of change

- Can promote or hinder organizational change depending on whether it
supports change or stability.
- To move to a change-friendly culture requires surfacing existing values and
norms, assessing their relevance to change and making appropriate
adjustments.
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- Attention directed at redefining values that focus behavior on the

organizational environment and help members see change as necessary
and natural.
- To enhance member commitment to a change-friendly culture, the reframed
values are placed in the context of important external pressures facing the
organization.
2. Redefine organizational design components for flexibility

- B2C designs emphasize a flat, lean and flexible organizational structure,
such as process, matrix and network designs – these can be reconfigured
quickly when required.
- Key objective is creating “maximum surface area” i.e. as many roles in the
organization as possible interacting with the external environment.
- B2C HR practices select, develop and manage the right talent for change;
reward systems play a key role by having bonuses tied directly to change
goals, learning new things and performing tasks well – rewards motivate
people to learn new skills, thus keeping pace with change and enhancing
their long-term organizational value.
3. Build an orchestration capability

- An orchestration capability enables the effective implementation of changes
in strategy and execution of design changes over and over again.
- Three activities to build the change capability – (1) change management
skills developed widely in the organization through selection and training,
(2) an organization effectiveness function is created with competencies in
strategic planning, organizational design and change management, (3)
learning by doing: organization members learn how to apply their change
capability by engaging in org changes and reflecting on that experience.
- Important aspect is the redefinition of leadership – shift from individual trait
to organizational capacity providing leadership experience to a broad array
of members and developing a strong cadre of leadership talent; shared
leadership supports continuous change by spreading change expertise and
commitment across the organization.
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Summary chapter 19:

In this chapter, we presented increasingly sophisticated interventions for helping
organizations conduct strategic change. These change processes are particularly
applicable for organizations facing turbulent environments where traditional sources
of competitive advantage erode quickly. Building change capabilities directly into the
organization is essential to constantly renew forms of competitive advantage to keep
pace with a rapidly shifting environment.
Dynamic strategy making involves specifying and implementing the four
elements that comprise the backbone of a new strategic system, thereby charting an
organization’s direction forward. It begins with defining a competitive logic, which
derives from an analysis about how fitting the firm’s capabilities can be used to exploit
environmental opportunities. Then the other three elements – goals, organization, and
action plan – are aligned closely with the competitive logic so as to support its
implementation. They spell out exactly what is to be achieved, how the organization
will be structured to accomplish it, and what steps are needed to make it happen. The
combined effect is to position the firm in the market and tightly link its objectives,
structure, and action to that strategy.
A self-design change strategy helps a firm gain the capacity to design and
implement its own continuous change. Self-design involves multiple levels of the firm
and multiple stakeholders and includes an iterative series of activities: acquiring
knowledge, valuing, diagnosing, designing, implementing, and assessing.
Organization learning interventions help organizations develop and use
knowledge to change and improve themselves continually. Organization learning
interventions address how organizations can be designed to promote effective
learning processes and how those learning processes themselves can be improved.
An organization designed to promote learning can create a continuous stream of
valuable knowledge. Knowledge management focuses on how that knowledge can be
organized and used to improve organization performance.
Built-to-change organizations are designed for change, not stability. They are
based on design guidelines that promote change capability in the firm’s strategy,
design, and leadership. In a rapidly changing environment, this change capability can
help the organization transition from one competitive advantage to another.
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Chapter 20 – Transorganizational Change

Learning goals:
- Explain the rationale and logic behind organization collaboration
- Describe and apply organization development (OD) interventions that
enable mergers and acquisitions
- Discuss and apply the OD process to alliance formation and development
- Describe the process of network formation and transorganizational
development as well as how networks change\
Organizations may merge with or acquire other firms to gain essential capabilities and
resources, to operate at a larger scale and to enter new markets. They may form
strategic alliances with other organizations to share costs and expertise and to
manage exchanges more efficiently. They may join with other organizations to tackle
complex problems and projects that single organizations cannot accomplish
Transorganizational Rationale
Transorganizational strategies can provide additional resources for large-scale

R&D, spread the risk of innovation, apply diverse expertise to complex problems
and tasks, make info and technology available to develop new capabilities, position
the organization to achieve economies of scale or scope, build collaborative
relationships to advance social or environmental issues, and gain access to new
international markets
● In general, these strategies allow organizations to perform tasks that are too
costly and complicated for single organizations to perform
● Tasks such as purchasing raw materials, hiring and compensating
organizational members, and obtaining investment capital
● When a good or service from one of these tasks is exchanged between two
units (individuals, departments or organizations), a transaction occurs
● Transorganizational strategies work best well when (1) transactions occur
frequently and are well understood, and (2) if transactions involve people,
equipment or other assets that are unique to the task
Transorganizational systems (TSs)
A TS is groups of organizations that have joined together for a common purpose.

These systems can make decisions and perform tasks on behalf of their member
organizations, although members maintain their separate organizational identities and
goals – this distinguishes them from M&As.
TSs tend to be under organized – relationships among member organizations are
loosely coupled, leadership and power are dispersed rather than hierarchically
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centralized, and commitment and membership are constantly being assessed to

maintain autonomy whilst jointly performing.
Network interventions can help TSs understand and address difficulties.
Difficulties – (1) potential member organizations may not perceive a need to join
others, (2) concerns with maintaining autonomy, (3) managing relationships and
controlling joint operations and decisions, (4) managing lateral relations among
independent organizations, because used to hierarchical forms of control, (5)
managing different levels of commitment and motivation among members and
sustaining membership
Mergers and Acquisitions
● Combination of two organizations

● Merger = integration of two previously independent organizations into a
completely new organization
● Acquisition = the purchase of one organization by another for integration into
the acquiring organization
● Different from other transorganizational systems because one of the
organizations will cease to exist
● M&As leverage the strengths or shore up the weaknesses of one organization
by combining it with another; preferred method for rapid growth and
strategic change
● Involves integrating many interventions including human process,
technostructural and HR interventions
Reasons – (1) diversification or vertical integration, (2) gaining access to global

markets technology or other resources, (3) achieving operational efficiencies,
improved innovation or resource sharing
Reasons for merger failure – (1) inadequate due diligence processes, (2) lack of a
compelling strategic rationale, (3) unrealistic expectations of synergy, (4) paying too
much for the transaction, (5) conflicting corporate cultures, (6) failure to move quickly
Major phases and activities in Mergers and Acquisitions:
Major M&A Key steps OD and Change Management

phases issues
Precombination Search for and select Ensure that candidates are
candidate screened for cultural as well as
Create M&A team financial, technical, and physical
Establish business case asset criteria
Perform due diligence Define a clear leadership structure
assessment
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Develop merger integration Establish a clear strategic vision,

plans competitive strategy, and systems
integration potential
Specify the desirable organization
design features
Specify an integration action plan
Legal Complete financial
combination negotiations
Close the deal
Announce the combination
Operational Day 1 activities Implement changes quickly
combination Organizational and Communicate
technical integration Solve problems together and
activities focus on the customer
Cultural integration Conduct an evaluation to learn
activities and identify further areas of
integration planning
Application Stages
Precombination Phase – consists of planning activities designed to ensure the

success of the combined organizations
● Search for and select candidate – identifying and narrowing the field of potential
candidate organizations, agreeing on a first-choice, assessing regulatory
compliance, establishing initial contacts, and formulating a letter of intent; OD
practitioner – ensure that candidates are screened for cultural as well as
financial, technical, and physical asset criteria.
● Create an M&A team – a group to manage the following stages; usually

comprising of senior executives and experts; leadership structure of the group
(or who is accountable) is critical; OD practitioner – facilitate formation of team
through team building and process consultation, help define leadership
structure, apply relevant skills and knowledge, and ensure both organizations
are represented appropriately.
● Establish the business case – developing evidence that combining the two
organizations will result in a competitive advantage that exceeds their separate
advantages; includes specifying a strategic vision (description of combined
capabilities synthesizing strengths of the two into a viable new organization),
competitive strategy (how the combined organization will add value in a market
segment, how the value proposition is best performed and how it will be difficult
to imitate) and systems integration potential (how the two organizations will be
combined i.e. how and if they can work together); OD practitioner – facilitate
discussion to ensure each issue is explored fully.
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● Perform a due diligence assessment – evaluating whether the two

organizations have the managerial, technical, and financial resources that each
assumes the other possesses; scope and detail depend on the knowledge of
the candidate’s business, industry complexity, size and risk of transaction, and
available resources; OD practitioner – help organizations carry out cultural due
diligence assessment systematically and objectively, specify the desirable
organizational design features.
● Develop merger integration plans – integration objectives, the scope and timing
of integration activities, organization design criteria, Day 1 requirements, who
does what, where, when; OD practitioner – specifying an integration action plan
including, e.g. tasks to be performed, decision-making authority, and timelines
for achievement.
Legal Combination Phase – involves legal and financial aspects of transaction.
The two organizations:

● Settle on terms of the deal
● Register the transaction with and gain approval from appropriate regulatory
agencies
● Communicate with and gain shareholder approval
● File appropriate legal documents
Operational Combination Phase – involves implementing the merger integration

plan.
● Day 1 activities – communications and actions that officially start the

implementation process e.g. where layoffs will occur, structure of tasks or
location of corporate HQ; sending symbolic messages to organization
stakeholders about the soundness of the merger plans and the critical changes
for accomplishing strategic and operational objectives.
● Operational and technical integration activities – the physical moves, structural

changes, work designs and procedures that will be implemented to accomplish
the strategic objectives and expected cost savings of the M&A.
● Cultural integration activities – aimed at building new values and norms in the
combined organization; successful implementation melds both the technical
and cultural aspects of the combined organization.
Suggestions for managing the operational combination phase:
(1) Merger integration plan should be implemented sooner rather than later.
(2) Integration activities must be communicated clearly and promptly to stakeholders.
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(3) Members from both organizations need to work together to solve implementation
problems and to address customer needs.
(4) Organizations need to assess the implementation process continually to identify
integration problems and needs.
Strategic Alliance Interventions

Formal agreement or collaborative effort between two or more organizations to pursue
a set of private and common goals through the sharing, exchange, or co-development
of resources, including intellectual property, people, capital, technology, capabilities,
or physical assets.
● Include joint ventures (alliance where a 3rd organization, jointly owned or

operated by multiple organizations, is created), franchising and long-term
contracts.
● Relationship between two organizations that believe the benefits of cooperation
outweigh the costs of lowered autonomy and control.
● Each organization in the alliance must understand its goal and strategies in the
partnership, build and leverage trust, and ensure it is receiving expected
benefits.
Application Stages
(1) Alliance strategy formulation – clarifies the business strategy and understands
why an alliance is appropriate; alliance must be seen as a more effective way of
organizing and operating.
(2) Partner selection – develops screening criteria, agreement on candidates,

establishing initial contacts and formulating a letter of intent; good alliance leverages
similarities and differences (source of learning) to create competitive advantage (e.g.
compatible management styles and cultures, but also different technologies and
capabilities).
(3) Alliance structuring and start-up – how to build and leverage trust in the
partnership; appropriate governance structure is chosen e.g. equal equity
partnerships; foster high relational quality through acting with good faith and joint
interests.
(4) Alliance operation and adjustment – full range of OD interventions can now be
applied; each partner in the alliance should have the capabilities, lessons learned and
benefits received clarified; adjustments come from understanding if the environment
has changed to make the transorganizational linkage unnecessary and whether the
alliance is successfully generating outcomes.
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Network Interventions
Transorganizational development = laying out the conceptual boundaries of network

development
● Help a group of organizations (normally three or more) to engage in

relationships that perform tasks or solve problems that are too complex and
multifaceted for a single organization to resolve.
● Include R&D consortia, public-private partnerships and non-profit coalitions.
● Tend to be loosely coupled and non-hierarchical.
● Each organization in the network has goals related to the good of the network
but also those of self-interest.
Characterized by two types of change: (1) creating the initial network

(transorganizational development forming a coherent whole recognizes the under
organized nature) and (2) managing change within existing networks (must account
for relationships among member organizations as a whole system).
Application Stages – Creating the Network
(1) Identification stage – identifying existing and potential member organizations best
suited to achieving collective objectives; judged on skills, knowledge and resources
brought to the network task; stakeholders who affect the network creation and
performance are identified; difficulty at this stage is insufficient leadership and
cohesion among participants.
(2) Convention stage – bringing potential members together to assess whether

formalizing the network is desirable and feasible; establish sufficient levels of
motivation and task consensus; transorganizational structure members’ realization of
the potential power of a network is known as a negotiated order.
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(3) Organization stage – members organize themselves for task performance;

developing structures and mechanisms that promote communication and interaction
among members directing joint efforts to achieve objectives; includes the roles the
organizations will play, the communication and relationships among them, and the
control system to guide decision making and performance monitoring.
(4) Evaluation stage – assessing how the network is performing; members need
feedback to identify and resolve problems; includes info about performance outcomes,
member satisfaction and how well members are jointly interacting.
Managing Network Change
Planned change in existing networks is related to understanding complexity,

catastrophe and chaos.
● Organization networks are viewed to possess the following properties:

1. Network behavior is sensitive to small differences in its initial conditions
2. Networks display emergent properties that cannot be explained through
an analysis of the parts
3. Various expected/unexpected network behaviors and patterns can
emerge from tasks and decisions according to simple rules to which
everyone agreed
Roughly follows Lewin’s model of planned change (Chapter 2):
(1) Create instability in the network – member organization relationships must

become unstable before change can occur; susceptibility to instability depends on
structure vs. agency motivations; structure = organization’s expected role in the
network and represents stability source, agreed upon roles; agency = self-interest
creating instability, maximize own performance in network context; as the ratio of
agency to structure increases, network instability rises enabling change to occur.
(2) Manage the tipping point – instability can cause a new state of performance, its
old condition, or cease to exist; to facilitate network change: (1) the law of the few – a
new idea, practice or other change spreads because of a relatively few but important
roles in the network; connectors (central positions in network with different audiences),
mavens (pursue knowledge passionately, trustworthy, unbiased) and salespeople
(champions of change, influence others) must occupy communication channels as
they create awareness and credibility (2) stickiness (memorability of the message,
through its structure, format, syntax, emotional content and practicality) and (3) the
power of context (message must be meaningful and relevant to network members).
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(3) Rely on self-organization – the feature that refreezes change; network members
seek to reduce environment uncertainty while the network as a whole drives to
establish more order in how it functions.
Summary chapter 20:
In this chapter, we describe merger, alliance, and transorganizational change

interventions that move beyond the single organization. These multi-organizational
change programs enable organizations to extend their boundaries to keep pace with
highly complex and rapidly changing environments. They help organizations create
and sustain multi-organizational linkages. Because transorganizational interventions
transcend a single organization, attention is directed at the strategies, objectives,
structures, and processes of two or more interdependent organizations. This raises
the scope and complexity of change and requires OD practitioners to develop new
concepts, skills, and expertise.
M&As interventions involve combining two or more organizations to achieve
strategic and financial objectives. They generally involve three phases:
precombination, legal combination, and operational combination. The M&A process
has been dominated by financial and technical concerns, but experience and research
strongly support the contribution that OD practitioners can make to MA success.
Strategic alliance interventions help organizations create partnerships with
other organizations to share resources and capabilities for competitive advantage.
They include licensing agreements, franchises, long-term contracts, and joint
ventures. The development of strategic alliances generally follows a process of
strategy formulation, partner selection, alliance structuring and start-up, and alliance
operation and adjustment.
Network interventions must address two types of change. First, because multi-
organizational systems tend to be underorganized, the initial development of the
network follows the stages of planned change relevant to underorganized systems:
identification, convention, organization, and evaluation. Second, the management of
change within a network also must acknowledge the distributed nature of influence
and adopt methods of change that rely on the Law of the Few, the power of context,
and the sickness factor.
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Chapter 21: Organization Development for

Economic, Ecological, and Social Outcomes
Learning objectives
- Describe organization development (OD) interventions that help organizations
balance economic, social, and environmental objectives.
- Describe sustainable management organizations (SMOs) and how OD can
assist in their design and development.
- Describe global social change organizations and how to adopt OD practices to
develop them
This chapter is about two relatively new interventions in OD aimed at enabling

organizations to pursue sustainable effectiveness.
- Sustainable management organizations (SMO’s) - which proposes that the
central purpose of human systems should be sustainable effectiveness.
- Global social change organizations – these engage in activities that increase
the social and environmental outcomes of predominantly economically oriented
organizations.
This requires a new set of ODP skills.
Sustainable Management Organizations

Sustainable Management Organizations (SMOs) are designed to achieve sustainable
effectiveness. They can perform in three areas—people, planet, and profit—and are
agile enough to remain effective over time.
The central purpose of human systems should be sustainable effectiveness. These

organizations are built to change and adapt in the service of positive economic, social,
and environmental results. Sustainability initiatives focus on the environmental impact
of business operations including travel reductions, two sided printing, more
environmentally sensitive product packaging and recycling programs.
Sustainable management organizations ask; how can we develop organizations to

achieve sustainability effectiveness? Two important implications:
1. The organization should generate sustainable outcomes. This has a triple-

bottom- line objective: positive economic, social and ecological results. It is also
a normative value that guides how organizations should minimize harm or
maximize benefits through decisions and actions. They should give social and
ecological outcomes equal standing in economic concerns, consider the needs
of all stakeholders – shareholders, customers, employees, business partners,
governments, the ecology, local communities, and the public.
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2. SMO should be able to sustain effectiveness. Set strategies that support

sustainability, determining sustainable objectives, establishing an organization
identity that is sustainability friendly and creating an agile organization.
Strategies that support Sustainable Effectiveness

- Breadth: Multiple countries, markets, technologies or products and services
increase the complexity of a firm’s carbon footprint and social impact. Breath
makes it difficult to understand the impact of the organization on ecological and
social outcomes. On the other hand, some breadth and diversification makes it
easier to make strategic changes that insure reasonable profits over a long time
frame. SMO’s think hard about this balance.
- Aggressiveness: In general, SMO’s are wary of too much aggressiveness too
often and have growth objectives that are reasonable and reasoned; a
conservative growth approach.
- Differentiation: SMO’s understand why customers make purchasing decisions
and how the organization’s product and service features align with those
choices. SMO’s build features into their offerings that reflect all three outcomes
(financial, social and environmental).
Objectives that support sustainable effectiveness

- Create positive economic outcomes while rejecting the goal of maximizing profit
or shareholder returns. They take a less aggressive approach to growth.
Reasonable and sustainable profit and growth expectations result in SMO’s
never being the best performers in their industries at any particular point in time.
A lower return on immediate financial performance, however a more stable,
long-term profitability with the ability to pursue social and environmental
objectives.
- Create positive ecological outcomes with awareness of carbon footprints and
the planet’s ecology. An initial goal of not destroying the environment. Creating
ecological value with business strategies built around the productive use of
natural resources (to help solve environmental problems) - generate economic
and social value without compromising the natural environment
- Create positive social outcomes that contribute to human and cultural well-
being with a clear perspective on social values and issues. Enhance cultural
diversity instead of homogenization. What role do social issues play in
innovation and long-term adaptability?
Identities that are sustainability friendly
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SMOs’ long-term success derives from their organizational identity, which represents
the central and enduring attributes of an organization that distinguish it from other
organizations and answers the question, who are we as an organization. Identity
emerges from values in use that define the culture, and in turn identity gives meaning
to culture through the stories told to members. Identity flows from and helps to create
an organization’s brand, image and reputation. Identity drives the brand promises and
messages that organizations make to customers and the market. But the image and
reputation that are hold by customers also influence identity.
Agile organization designs that support sustainable effectiveness

The final design guideline for SMOs is the need to create an organization that can
change and adapt to multiple stakeholder demands and changing environments
routinely - built to change/dynamic capability.
Features of an agile organization:
 Work systems: two types of work:
o Core and exploitive: supports the current strategic intent and must be
reliable, predictable, and as efficient as practicable. Must be reliable
enough to support the differentiators, meet demands, and generate
profit. So they have to be exploitive to the current situation, for strategic
intent is subject to change.
o Creative and exploratory: designed to generate new projects, services,
and other disruptive innovations; it can obsolete the currents strategic
intent. Temporary and iterative: based on initiatives and activities not
jobs, non-routine, driven by shared goals, and performed by cross-
functional teams. Innovate processes to develop future opportunities.
 Structures: focus member attention and organization resources on the most
important aspects of getting core and creative work accomplished. The unique
feature of SMO structures is their external focus and ‘maximum surface area’:
with roles that are directly connected to several aspects of the external
environment. They only involve boundary-spanning roles in SMO. It enables
members to experience what happens in professional, business, competitive
and regulatory environments, as well as community and environmental sectors.
 Management processes: SMO’s have flexible decision-making and processes
that leverage information from external sources. Information is moved through
the organization to wherever it is needed, transparency is very important.
 HR systems: SMOs rethink the way that people are attracted, retrained,
developed, motivated and led. There are multiple types of employment
arrangements. Individuality of employees, and development of skills are
important. There needs to be an alignment of financial and non-financial reward
systems that support the triple-bottom-line and change
SMO application stages

SMO interventions tend to involve systematic and revolutionary change processes
driven by senior executives. Radical changes that generally alter every feature of the
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organizational design and challenge many of its long-held assumptions and they
proceed at a quick pace.
 Identifying and Redefining Organization Identity
Probably the biggest distinction between an SMO intervention and other
strategic changes is the development of a new organization identity. Identity
change is both an outcome of the transformation process and a key measure
of the change’s effectiveness. The first step is a cultural diagnosis (with aid of
ODP): assessing how well the organizations values in use and brand
promise/reputation support sustainable effectiveness and agility. The next step
is leveraging organization values and reputational elements that already
support sustained effectiveness rather than trying to fix those values and brand
images that are not aligned with it.
 Repurposing the Board of Directors
SMO boards face more demanding roles, more complicated decision making
and more intense discussions. OD practitioners can help boards address key
issues that invariably arise when moving toward sustainable effectiveness.
o Board may need to assess whether its membership reflects the most
important stakeholders, including investors, representatives of the
community, workforce and environment. This approach differs from the
classic financial accountability-driven membership model. Membership
diversity enables balanced decision-making.
o Board members may need to create new goal-setting processes. These
might include addressing how social and ecological goals can be
integrated with economic objectives.
o Ensure effective decision making skills and clear guidelines to make
tough choices about sustainability. These choices might not always
positively affect financial performance.
 Building Capabilities
Becoming an SMO involves identifying, which existing organization capabilities
support sustainable effectiveness and determining which new abilities need to
be built. There need to be good multi-stakeholder decision making and take into
account diverse perspectives in making choices. Training and development,
teambuilding and learning interventions can help organization members learn
collaborative and systems thinking skills that acknowledge the trade-offs
necessary to meet triple-bottom-line objectives. Also include nontraditional
stakeholders (e.g. community and environmentally related non-governmental
organizations). There is a need to develop change capability; change
management skills (training for managers & employees.
 Sequencing the Changes
Large group interventions are helpful to accelerate the identity transformation
process because they can support the organization’s development of multi-
stakeholder and change capabilities.
o Work systems redesign: assessing how work gets done and designing
them for sustainable effectiveness. This will likely make the biggest
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advance toward becoming an SMO. Ensure that the organization’s future

aspirations are aligned with past and current behaviors.
o Clarifying the Strategy: clarify the goals and explore the implications of
becoming an SMO on its resources and capabilities (with the key
stakeholders). Gaining stakeholder support, determining how the
different stakeholders will work together and clarifying the vision, mission
and values.
o Building an agile design: create a maximum surface area to support
external focus, strong collaboration capabilities, flexible recourse
allocation systems, and transparent decision-making processes. Also
include talent allocation system with goals, performance appraisals and
rewards that promote flexibility and sustainable effectiveness outcomes.
Global social change

Organization development applied to global social change is one of the boldest and
most exciting developments in the field. This form of OD is generally practiced in global
social change organizations (GSCO’s).
Global Social Change Organizations

Global Social Change Organizations (GSCOs) are not-for-profit and nongovernmental
entities that are created at the grassroots level to help communities and societies
address complex and important problems such as unemployment, race relations,
homelessness, hunger, disease, water quality, and political instability.
Global Social Change organizations engage in activities that increase the social and
environmental outcomes of predominantly economically oriented organizations.
ODP’s are using this intervention to facilitate the development of evolving countries,
to change the practices of for non-profit entities, to provide a voice to underrepresented
social classes, and to bridge gap between cultures facing similar social issues. Part of
a social innovation movement to foster the emergence of a global civilization. They
address complex social problems such as overpopulation, ecological degradation, the
increasing concentration of wealth and power, and lack of human rights. GSCO’s are
characterized by:
 Primary task is commitment to creating environmentally and socially
sustainable world futures
 Innovative social-organizational structures that enable cooperation across
previously polarized or constrained boundaries. Their values emphasize the
role of people as both means and ends in the development process.
 Values of empowerment and people- centered forms of action.
 Linked globally and locally in structure, membership or partnership and thereby
exist, at least in identity and practice (maybe not legally), as entities beyond the
nation-state;
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 They are multi-organizational and often cross-sectoral. They can be business,

government, or non-profit organizations. Multi-organizational partnerships to
form new hybrids of business, government and volunteerism.
GSCO’s differ from traditional firms on six dimensions:

1. They advocate a mission of social change, the formation and development of
better societies and communities.
2. The mission is supported by a network structure
3. GSCO’s have strong values and ideologies that justify and motivate
organization behavior.
4. Interact with a broad range of external and conflicting constituencies
5. Managing these diverse external constituencies often creates significant
organizational conflict
6. GSCO membership is often transitory, many members are volunteers, so
turnover can be quite high.
By strengthening local organizations, building horizontal linkages with other like-

minded GSCO’s and developing vertical linkages with policy-making organizations, a
change agent can help GSCO’s become more effective and alter their external
context. To support roles of stewardship and bridging, change agents need
communication, negotiation and networking skills.
Application stages GSCOs

 Building the Local Organization
Although GSCO’s are concerned primarily with changing their environments, a
critical issue in development projects is recognizing the potential problems
inherent in the GSCO itself and build a viable organization.
OD practitioners focus on three activities:
- Values to create vision: broad purposes of GSCO must be clear and closely
aligned with ideologies of its members. Development of a shared vision allows
people in disparate regions and positions to coordinate their activities.
- Recognizing conflict: In working through conflicts between different
stakeholders, the organizational vision can be used as an important rallying
point for discovering how each person’s role contributes to the GSCO’s
purpose. Another way to manage conflict is to prevent its occurrence and the
use of committed listeners to achieve a ‘breakthrough’.
- Problem of success: A number of problems can arise when successful.
o Identity crisis when success of the mission takes away the reason of
existence of the GSCO. During these times, the vital social role that
these organizations play need to be emphasized.
o Additional demands for greater formalization and coordination (e.g. more
control over income and expenditures). The need for more formal
systems often runs counter to ideological principles of autonomy and
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freedom. But involvement of members can encourage commitment to

these changes.
o A GSCO can maintain its autonomy through structural arrangements.
 Creating Horizontal Linkages
Networks of local organizations with similar views and objectives. Multiple
organizations need to interact. The ability of GSCO’s to sustain themselves
depends on establishing linkages with other organizations whose cooperation
is essential to preserving and expanding their efforts.
 Developing Vertical Linkages
Upward communication and influence to governmental and policy-level
decision-making processes. These higher-level decisions often affect the
creation and eventual success of GSCO activities. Can be developed by
building on a strong record of success (creating reputation, recognition and
credibility), or creating relationships with journalists and the local governments
to create visibility.
Change-Agent Roles and Skills

GSCO change agents typically occupy two different roles; stewardship and bridging
roles.
1. Steward role: The steward role derives from the ideological activities, which
asks the change agent to be a co-learner or co-participant in achieving global
social change. Stewardship implies an orientation toward the development of
sustainable solutions to local and global problems. Change agents bring
specific knowledge of problem solving, technologies of empowerment using
socially constructed processes, and organization design to the GSCO settings.
Participants bring local knowledge of political players, history, culture and
ecology. There is a need for a collective reflection process to produce new
ideas, possibilities and insights. When both the agent and participants
contribute to sustainable solutions, the steward role is satisfied.
2. The bridging role is concerned with connecting and integrating diverse
elements of societies and communities toward sustainable change, and with
transferring ideas among individuals, groups, organizations and societies. In
the bridging role, networking skills create conditions that enable diverse
stakeholders to interact and solve common problems or address common
issues. Change agents must find common ground and have the capability to
tap multiple sources of info and perspectives, making linkages among
individual, group, GSCO, and social levels of thought.
These roles require communication, negotiation, and networking skills:

The roles require persuasive articulation of the GSCO’s ideology and purpose at all
times, under many conditions, and to everyone involved. Change agents must be
adept at political compromise and negotiation. Asymmetrical power contexts represent
strong challenges. The change agent needs to understand the elements of the
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ideology that can and cannot be sacrificed. Additionally, networking skills are very
important.
Summary chapter 21:

In this chapter, we presented two interventions designed to help organizations
generate positive social, environmental, and economic outcomes. These change
processes are fundamentally different from other OD interventions that focus
primarily on the achievement of economic objectives.
Sustainable management organization interventions are intended to achieve
sustainable effectiveness. Organizations must be agile enough to sustain high levels
of economic, social, and environmental performance. Achieving these triple-bottom-
line objectives relies on design guidelines that promote capabilities in change and
multistakeholder decision making. The organization’s strategy must be realigned and
clarified to support sustainability and the work systems, structure, management and
information systems, and human resource systems must be oriented appropriately.
Finally, applications of OD to global social change were discussed. Typically
carried out in global social change organizations, these interventions promote the
establishment of a global civilization. Strong ideological positions regarding the fair
and just distribution of wealth, resources, and power fuel this movement. By
strengthening local organizations, building horizontal linkages with other like-minded
GSCOs, and developing vertical linkages with policy-making organizations, a change
agent can help GSCOs become more effective and alter their external context. To
support roles of stewardship and bridging, change agents need communication,
negotiation, and networking skills.
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Chapter 22: Organization development in

nonindustrial settings: health care, school systems,
the public sector, and family-owned
- Understand how organization development (OD) in nonindustrial settings
(health care, school systems, the public sector, and family-owned
businesses) differs from traditional practice contexts
- Describe the changes in the health care industry and how OD is practiced
in this industry.
- Understand how OD can support educational reform
- Explain the role of OD in government organizations
- Discuss the components of family firms and how to apply OD in those
settings
Organization development in health care
Health care is a dynamic and complex industry facing significant growth, regulatory
demands, and change. This section describes the current health care industry in the
United States. Regardless of current trends, the health care industry represents a
challenging context within which to practice OD. Compared to other industries, such
as software development, manufacturing, or retail, health care differs along several
dimensions.
- Though it is beginning to change, consumers are often insulated from the

economic consequences of their major health care decisions, including
lifestyle choices, health habits, which hospital to go to, and where to get
outpatient services.
- The key providers of care are not connected through an employment
agreement. The hospital or other setting where care is delivered does not
typically employ the physician.
- Hospitals, a key component of the health care system, are primarily not-for-
profit and face several challenges related to their ability to create
sustainable revenue to support operations.
- The law requires hospitals to care for all patients regardless of their ability
to pay, prompting the need to grow revenue in other areas.
These factors have resulted in a fragmented industry focused on curing illness and
providing more services to cover the costs, rather than creating efficiency or promoting
wellness. This has created ethical dilemmas and increased complexity.
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Trends in health care

1. Change in the incentives and reimbursement models of health care reform
2. Quality and cost as strategic and regulatory imperatives
3. A blurring of traditional industry segment lines and integration across different
segments of health care
4. The rise of informatics and e-health
5. An aging workforce and changing demographics of patients
Opportunities for organization development practices

Effective OD practitioners in health care will need to possess robust expertise in
managing large-scale change and maintain a keen awareness of the environmental
and industry trends affecting their client organizations. In combination with traditional
OD practices, such as visioning and goal-setting, future search conferences, small-
and large-group facilitation, process improvement, team development, and conflict
mediation, practitioners should support their clients’ needs for comprehensive
approaches that strategically align people, systems, and cultures.
There are five primary areas of opportunity for OD practitioners:
1. Developing strategic, emotionally intelligent leaders and teams.

a. Health care leaders will need to develop competencies of emotional
intelligence (EI). Four key domains: self-awareness, self-management,
social awareness, and relationship management. Emotionally intelligent
leaders and teams tend to be higher functioning.
b. In terms of transparency, leaders must be emphatic about truth-telling.
Leaders should proactively share information with patients and partners.
c. OD practitioners’ expertise in executive leader and team development,
and strategic change has a vital role to play in transforming
organizational health. OD practitioners can also add value by sharing
best practices from industries outside health care that leverage
successful change management and development practices.
2. Shifting organization systems to a new paradigm.
a. Recent legislation mandates a new paradigm of partnership and
adaptability across all ends of the care spectrum, creating a substantial
opportunity for OD practitioners to thoughtfully co-design organizational
structures, management systems, and industry relationships that reflect
this focus on collaboration.
b. Management processes and delivery of care methods between
providers will need to be much more coordinated and open, suggesting
that how organizations are designed and operated needs to reflect a
similar degree of openness and flexibility.
3. Supporting aligned cultures.
a. Create effective cultures that align the new incentive/reward systems,
new roles, and more efficient work processes. These new incentive
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structures will emphasize customer service, collaboration, and

adaptability, so health care organizations whose cultures match those
characteristics will likely see more positive returns in terms of talent
attraction, retention, and performance.
b. Organizations that can effectively cultivate a culture of openness and
learning, as opposed to hierarchy and control, will be most proficient at
addressing the shift in focus to integrated patient care.
c. A more collaborative, cross-functional approach will be critical for the
medical field going forward.
d. OD practitioners can contribute to the intentional creation and
maintenance of such cultures. Organizations that adapt to changing
roles, data systems, and new reward structures will be notably more
successful in creating competitive advantage. Moreover, OD
practitioners can share process improvement and work redesign insights
and methodologies (lean performance management, six sigma).
Operating in a more efficient, connected manner can help ensure that
the entire system reduces costs and achieves highest quality outcomes
for patients.
4. Delivering comprehensive learning programs.
a. OD can build on its traditional role of supporting training and
development functions by addressing organizational learning needs
related to customer service, clinical and technical skills, change
management, lean performance improvement, and leadership training.
i. Incentive/reward system changes to focus on value-based model
(patient satisfaction and quality metrics), all employees must
become adept at serving customer needs.
ii. Education programs will need to develop employees’ knowledge
and skills to support new processes and roles.
iii. Organizations that teach and enforce process improvement
methods throughout all levels will be well-served as they attempt
to meet mandates to reduce cost while improving overall care
quality.
iv. The emerging health care environment requites the adoption of
both management and leadership best practices to ensure that all
health care organization members are applying effective
management processes and emotionally intelligent leadership
behaviors.
5. Creating engaged employees
a. Recent OD research underscores the pertinent value in measuring and
nurturing employee engagement. During times of significant change,
employee engagement is more critical than ever in long-term
performance.
b. OD practitioners with expertise to ensure that health care leaders are
cultivating an organizational environment in which their employees,
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physicians, and other partners feel connected, highly supported, and

eager to shape the future of their companies for the next generation. An
engaged workforce will be the competitive advantage for organizations.
Conclusions
The health care industry offers unprecedented challenges and opportunities. OD
practitioners can influence growth and development by linking their efforts to the
strategies of the organization, demonstrating competence and integrity, and being able
to facilitate the integration of people and processes across traditional departmental
and organizational boundaries.
The practitioner must seek a balance between responsiveness and relevance while
maintaining a commitment to the core values that have defined OD, namely the equal
importance of human needs and the creation of a work environment that allows growth,
fulfillment, and performance.
Organization development in public school systems
This section describes changes taking place in US public schools. The United States
does not have a national school system. Each state’s own laws regulate education,
and standards and curriculum are determined at the state and local levels.
School systems present a uniquely challenging environment for the application of OD.
Schools differ in their structure, purpose, and process from most other organizations.
Schools cannot be characterized simply as organizations or communities.
A number of forces are challenging traditional models of schooling, including the

changing nature of communication and learning, the evolution of the workplace and
required skills, increased diversity, increased competition, and tough economic times.
1. The changing nature of communication and learning

a. Global access to information, collaborative virtual spaces, mobile
technologies, participatory media, and multiplayer online games offer
rich new learning opportunities independent of traditional school
settings.
b. New educational technologies provide a mix of fun and learning in ways
that schoolrooms are unable to match.
c. These learning technologies are student-centric. They can access them
when they are ready and allow them to interact with their peers in
mutually interesting ways.
2. Evolution of the workplace and required skills
a. New skills will be required for the future. New set of competencies reflect
the complexities of today’s workplace (global awareness, creativity and
innovation skills, media literacy, leadership/responsibility)
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b. Expectations for teacher certification have increased, teaching

conditions have become more demanding, and pay has not kept pace
with other professions. Result: more than half of new teachers leaving
the profession within their first three years and raising serious concerns
about teacher quality.
3. Increased diversity
a. Today’s students are more diverse ethnically, culturally, and linguistically
than ever before. Their learning needs, interests, and well-being require
culturally responsive instructional practices and outreach to parents.
b. Educators need to be sophisticated in their understanding of how culture
and language influence identity and learning, well-versed in first and
second language acquisition pedagogy, and equitable in their beliefs
and actions in order to promote high levels of achievement for all
students.
4. Increased competition
a. Various options: public schools, private schools, charter schools, and
home schooling. Some options are not available to families who lack
resources.
b. Cyberspace aided by new collaborative communication tools: serious
games, online museums, and global learning communities.
5. Tough economic times
a. The economic divide between students with resources and those without
is widening. Poverty can impede children’s ability to learn and contribute
to social, emotional, and behavioral problems. It can also contribute to
poor health and mental health.
b. Students in poverty are at great risk of failing and dropping out of school
when they don’t receive the additional resources they need to succeed
academically.
In response to the stress of changing circumstances and increased competition, three

large-scale school reform efforts have been launched over the past 30 years: The
Excellence Movement, the Restructuring Movement, and the High Standards, Testing,
And Accountability Movement. All three have been criticized for focusing on issues
marginal to teaching and learning, and producing few if any positive outcomes.
Understanding these movements can better OD practice and intervention design.
The Excellence Movement

The Excellence Movement offered no new direction. Initiatives associated with this
movement were described as “more of the same”, including longer school days and
longer school years. Within five years it had come and gone.
The Restructuring Movement

Site-based management with meaningful authority over staffing, program, and budget;
shared decision making; staff teams with frequent, shared planning time and shared
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responsibility for student instruction, multiyear instructional or advisory groups; and

heterogeneous grouping in core subjects.
Comprehensive redesign and systemic transformation of the schools. Simplistic,
more-of-the-same approaches were replaced by the mindset that fundamental
changes were necessary if schools were to develop the capacity to successfully
address the significant challenges.
The High Standards, Testing, and Accountability Movement: NCLB and Race to
the top
NCLB: No child left behind act, January 2002 by George W. Bush.
The intent of NCLB was to hold schools and school districts accountable for results
and to ensure that all students were learning. The remedies and sanctions by NCLB
were ineffective and did not result in high standards or high accomplishment.
Race to the top: win grants, but is highly politicized. The tests are inaccurate ways to
measure teachers. High-stakes testing is unreliable.
Reasons for failed reform

Five reasons why these large-scale reform efforts have failed to produce meaningful
change in schools:
1. The complexity of the task: fragmented system of education
2. Misplaced focus: little consensus around goals for improvement
3. Lack of clarity on intended results
4. Failure to appreciate and attend to the change process
5. Lack of perseverance: change needs to be supported with guidance, time,
resources, and opportunity to collaborate, opportunity to problem-solve,
encouragement, celebration, and a plan for sustaining the change over time.
6. Inattention to the features that distinguish schools from other businesses has
also contributed to failed reform efforts. School systems are far more tightly
embedded in larger social systems than businesses.
Considerations for OD practitioners

OD principles can inspire the most promising of school improvement practices – those
that place emphasis on the teacher, the classroom, and the patterns of interaction that
exist among teachers and between administrators in the school. Several of the most
promising applications:
Developing professional learning communities (PLCs)

Team learning in educational context: the idea of school as a learning community,
suggesting a family-like, close-knit connectedness among members. Characteristics
and practices that reflect a learning community: action and results-oriented focus;
continuous improvement; supportive and shared leadership; shared purpose, mission,
vision, values and goals; reflective dialogue and collective inquiry, and shared
responsibility for students’ learning.
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PLCs are built around relationships and shared ideas. Shared values, sentiments, and
beliefs unite people in communities around common causes. Leadership in
communities emerges from moral roots and is servant in nature. Learning communities
are regularly engaged in learning and inquiry with a focus on results and continuous
improvement.
Cultivating trust and learning relationships

An important first step in schools becoming authentic learning communities is the
building of relational trust. OD values (respect, inclusion, collaboration, authenticity,
self-awareness, and empowerment) are aligned with four components of relational
trust associated with PLCs: respect for the importance of person’s role and viewpoint,
competence to administer one’s role, personal regard for others, and integrity in words,
actions, and ethics.
- OD practitioners can help schools identify, acknowledge, and support learning
relationships between peers, family members, and the community by promoting
the values of self-awareness and empowerment.
- OD practices can assist schools in gaining active engagement from family and
community through the building of positive family and community relationships.
Creating a collaborative vision

Four building blocks form the foundations of PLCs: mission, vision, values, and goals.
OD practices can support schools in the development of effective mission and vision
statements. OD practices can also guide school efforts with regard to clarifying values
and goal setting.
- Effective vision statements: promote ownership and unity, are desirable,
feasible, credible, and easy to communicate.
- Set goals: involve OD principle of community involvement.
Improving teaching practice with action research

A founding practice of OD, action research, has recently become an emergent practice
among teachers seeking to improve their professional practice. The overarching goals
of action research are to increase practitioner and community knowledge about the
topic under study and to show results through improvements in education that have
resulted from study.
Participatory action research is based on five principles:
1. Belief in human capacity
2. Unyielding commitment to social justice and equity
3. Value of collaborative work to individual educators and to their schools
4. Norms of professional and public accountability
5. Mutual inquiry as a means to honor others, empower ourselves, and adapt to a
changing educational environment.
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Grounding practice in theory

Social constructivism is the current most widely accepted learning theory. Social
constructivism puts students at the center of learning.
Growing leaders and leadership locally

Traditional leadership models have largely failed public schools because they have
ignored or marginalized the leaders already in the schools. Growing sustainable
leadership capacity requires robust learning communities. Leadership is a group
activity linked to a practice rather than an individual activity linked to a person.
OD practitioners should seek to discover, honor, and empower the local leaders of the
learning community who are far more aware of the issues and solutions but have softer
voices. In addition, they should seek to discover methods for developing that nascent
leadership for the future good of the school and community.
Utilizing technology as catalyst for innovation

Teachers crammed new technology into their existing structure, rather than allowing
the disruptive technology to take root in a new model. Provide a rich set of learner-
centric tools to empower and access to a global content network to engage
communities of learners.
OD practitioners can assist by applying the recent outside innovations and envisioning
new platforms (such as social media, games) that will support learners rather than
enforce teaching and testing.
Conclusions
Education in the US is a complex, diverse, and continually evolving system. Schools
differ in their structure, mission, and process from most other organizations. A number
of forces, including changes in communication and learning, changes in the workplace
and required new skills, increased diversity, increased competition, and tough
economic times, are stressing traditional models of education and prompting change.
Large-scale efforts to reform the system have been disappointing and criticized as
focusing on issues marginal to teaching and learning and producing few if any results.
Failed large-scale reform efforts have given rise to a new strategy for school
improvement – PLCs.
Considerations for OD practitioners with regards to supporting the transformation of

schools to becoming PLCs include: developing trust and learning relationships,
creating a collaborative vision, improving teaching practice through action research,
grounding practice in research, growing leaders and leadership locally, and utilizing
technology as a catalyst for innovation.
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Organization development in the public sector
Public-sector organizations in the United States, such as federal, state, and local
governments, operate in a complex environment of competing political, social, and
economic forces. OD interventions re becoming more common and accepted in
government. OD interventions are helping public-sector organizations transform
themselves into citizen-focused, customer-driven, and results-oriented public-sector
organizations.
The climate and support for OD is complicated by a complex political and operational
environment, the structure of public-sector organizations, and sometimes competing
values.
Comparing public- and private-sector organizations

Public- and private-sector organizations differ along four key dimensions: values and
structure, the multiplicity of decision makers, stakeholder diversity and access, and
the extent of intergovernmental relationships.
1. Values and structures. In private-sector companies, the key values are

profitability and the creation of competitive advantage. The overarching
purpose of public-sector organizations is to govern toward greater public good
and demonstrate responsiveness to public wants and needs.
a. OD practitioners must understand that a public-sector organization’s
primary mission, unlike private-sector organizations, is set by law, and
major changes can only occur through additional legislative action.
b. Many of the interventions used to help private-sector organizations, such
as strategic goal setting, performance management, succession
planning, staff development and organizational learning, culture change,
and team building, can be used successfully in the public sector.
c. Public-sector interventions often require approval and funding from an
elected board. OD practitioners need to be ready to provide evidence of
success for particular interventions in public-sector organizations.
d. OD processes that support elected officials in citizen-focused initiatives
or in enacting policy must consider the public environment in which they
are being conducted. OD practitioners must select processes that create
a constructive environment on the one hand and allow for public
participation and review on the other.
e. The values of the political domain may differ from traditional OD values.
The win-lose dynamics associated with passing legislation, mediating
competing interests and political trade-offs, and balancing scarce
resources can conflict with OD values of collaboration, teamwork, and
efficiency.
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2. Multiplicity of decision makers. The public sector has broader access to the
decision-making process and accountability is more dispersed than in private-
sector organizations, where such access is uncommon and responsibility is
more clear-cut. This multiplicity of decision makers and government
fragmentation results in additional implications for OD interventions.
a. Multiple decision makers make it difficult to determine the identity of the
client and the expected results. The OD practitioner may be unable to
gain the same level of clarity about who is the client, their authority, and
an understanding of their responsibilities that is possible in the private
sector.
b. Support and funding approval for OD interventions may be more difficult
to obtain than in the private sector.
3. Stakeholder access. A stakeholder is any group or individual who is affected by
or who can affect the policies and operations of the public-sector organizations.
The public sector conducts business in open public meetings and involves a
greater variety of individuals and groups with different and often mutually
exclusive sets of interests, reward structures, and values.
a. OD practitioners must recognize that all stakeholders, most of whom
bring different values, goals, or proposed solutions to public issues, have
legitimate entry into the public policy and administrative processes.
b. Anyone may influence the policy-making process. Everyone must be
listened to and no one can be ignored. In the private sector the ability to
influence corporate decisions and activities is much more restricted. In
reality, anybody can make a demand for full disclosure about the OD
initiative and ask to be involved in the process. The likelihood is high that
they have legitimate standing to do so.
c. With regard to collective bargaining, OD practitioners help facilitate the
process in a way where all parties perceive their interests have been
considered and they feel heard. A poor labor relations environment and
poor employee morale will make it difficult, if not impossible, to
implement OD interventions successfully.
4. Intergovernmental relations. In an intergovernmental relations environment
federal, state, and local government share power, responsibility and, in some
cases, resources.
a. Issues of coordination and power may emerge out of the sharing of
responsibility across public-sector organizations. OD practitioners
working on intergovernmental relations projects must utilize a network
perspective that makes explicit these differences with the intention of
reaching agreement about overarching outcomes, responsibility, and
shared resources.
b. Local governments must implement federal and state laws and policies
that often conflict with each other. The OD practitioner could facilitate a
positive result to the negotiation process by getting early agreement
between the organizations on the overarching desired outcomes, and
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how decision making and conflict will be managed. Appreciation for the
mission and power relationships among agencies is critical in designing
effective network development interventions.
Conclusions
OD applications have proven to be effective in public-sector organizations. Faced with
many of the same pressures as private industry and some that are unique to
government, public organizations will continue to use OD applications and
interventions to transform themselves into citizen- and customer-driven, more effective
and responsive, results-oriented organizations. But to be effective, practitioners
helping government must appreciate the differences incumbent in public-sector values
and organization structure; the differences in public and private organizations; and the
mindsets of elected officials and government workers. OD practitioners need to
understand public-sector organizations and tailor interventions to fit highly diverse,
politicized situations where elected officials and bureaucrats struggle with moving
toward a greater emphasis on reorganizing and outsourcing, continuous improvement,
teamwork, customer focus, employee development, and learning. Although public-
sector OD is difficult and challenging, the successes cited in this chapter illustrate that
OD is an invaluable tool in helping public-sector organizations provide top-quality
services.
Organization development in family-owned businesses
It is important to understand the dynamics of human and family relationships in this

context.
The family business system

An organization where ownership and/or management control rests with a family or
families. Family firms have several potential competitive advantages that public- or
private-owned organizations do not. These include higher employee loyalty, the ability
to quickly move in and out of market niches due to their flexible form of organization,
their long-term (versus short-term) orientation and the ability to keep information about
the business out of view of the public and their competitors.
The family business system is composed of three different subsystems: the business,
the owners, and the family with varying boundary strengths.
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A parallel planning process

Viable business strategy is still the outcome, but it is an outcome shaped by the
concerns of the family. The parallel processes lead to the simultaneous development
of a family enterprise plan and a business strategy plan.
Values
At the center of the family business system model is a set of core values held by the
family. Based upon the values a family employs in making decisions about the
business and the family they can be classified as either ‘family first’ or ‘business first’.
- A family first value system will place family above the business and may
suboptimize business opportunity to benefit the family.
- A business first value system is based upon the belief that a well-managed
business will produce the most benefit for the family now and in the future.
The family business system model provides an effective diagnostic tool and helps to
explain some of the reasons why OD in family firms can be difficult.
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Critical issues in family business

The interaction of the family, ownership, and business subsystems, particularly at
generational transition points, can be problematic. Some of the critical change triggers
common to family businesses as they grow and develop:
1. Entering or leaving the business as a family member. There must be clear roles,
recruiting processes, training, and development to give every family member
who chooses to be part of the business a clear sense that they have earned
their place. Most importantly, every family member should feel that they have
the opportunity to “opt out” of the family business, without the risk of losing the
unconditional love of the family.
2. Conflicts and rivalry in the business. Are common in family firms and often the
result of values dilemmas. Family member compensation, roles and
responsibilities, authority, and opportunity are some of the critical issues that
ignite conflict between family members. The complexity of the family business
system requires additional structures, practices, and processes to ensure open
communications, conflict resolution, and business performance.
3. Ownership transfer and estate planning. Owners’ rights and responsibilities
typically include electing directors, creating bylaws, voting on specified major
business decisions, and realizing a fair return on investment. When ownership
transfer issues arise, members of the shareholder group often struggle between
transferring family business stock to members of the entire family versus only
those family members who are active in the business. Another option is
equalizing the total estate.
4. Selecting a new leader. Forward-thinking family business leaders spend the
time to identify the optimum type of leader needed to take the business into the
future. This can only happen after creating a shared business vision and
strategy and then identifying the best leadership candidates (family or non-
family member?)
5. Business growth and family wealth. When the business fails, there is little
chance for the family’s wealth to grow. To grow the business and the family’s
wealth requires careful thought and strategic planning.
OD interventions in family business systems

As a result of the interconnectedness of the family, business, and shareholder
systems, complexity is the norm. The skill set required for a family business advisor is
comprehensive and includes OD competencies (e.g., behavioral sciences, systems
thinking, strategy, and organization design), family systems knowledge (e.g., life cycle
development, birth order issues, family dynamics), conflict resolution skills, and family
meeting facilitation. In addition, the family business consultant should acquire working
knowledge in the areas of estate and financial planning, legal forms of organization,
exit strategies, family philanthropy, family offices, financial analysis, and
multidisciplinary (professional) teaming.
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Perhaps the key to success of a family business consultant is the ability to establish a
trusting, caring relationship with the client system, to accurately surface the issues and
dynamics at the heart of the family business dilemmas, and to effect positive,
sustainable change. Consultants must know their own values, ethics, goals and
personal development areas, including their beliefs about families and families in
business and insight into their own family system issues and dynamics.
Given the many demands and diversity of the family business system, it can be
beneficial to use a team consulting approach in certain cases.
Entering and contracting

The mission of an OD practitioner dictates a systems approach, so any relationships
begun in this phase must integrate family issues around the business issues.
Establishing trust early increases the chance of moving forward successfully.
Diagnosing the organization

Gather data: confidential interviews of a range of stakeholders (most powerful),
individual and business profiles, a genogram (visual representation of the family
history).
Feedback and planning

Providing feedback to family business members often includes a one- to two-day
offsite session to review a “discussion guide” that summarizes key issues, priorities,
and recommendations. Building good communication practices and resolving conflict
are two common starting points for work with family firms.
Most common interventions in family business systems today:

- Strategic. Mission and vision development, capability identification, goal
setting. OD practitioner must continually clarify roles, responsibilities, and
boundaries. Strategic business planning is appropriate only after the family and
shareholder subsystems have aligned on a set of values, goals, and shared
vision for the family business.
- Systems. HR policies and procedures, technical operations, information
management systems, organization culture. Interventions can focus on
communications, education, family succession, compensation, and
philanthropy.
- Structure. Governance structures are necessary so that effective
communications and coordination can occur. The shareholders’ subsystem
requires its own governance structure – a shareholders’ forum. Governance
structure for the family: family council.
- Process. Coaching both the founder/current leader and the next generation
leader, team building, conflict resolution, communications and family meeting
facilitation, and family charter development. The shareholder subsystem
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requires process interventions in the areas of forum development,

communications/boundary management, and conflict resolution.
Implementing and evaluating change

High involvement in the first stages of implementation (meeting regularly).
Once the implementation stage is well underway, six month or annual retreat.
Summary chapter 22:
Traditionally, the published material in OD has focused on applications in industrial

organizations. This chapter presented broad applications of OD in nonindustrial
organizations, such as health care, schools, government agencies, and family firms.
The results of these change programs to date suggest that OD is being applied
successfully but also needs a greater range of customized diagnostic methods and
interventions, and it must be clear about the values in use when it is applied to
nonindustrial settings.
Foster Mobley and his colleagues pointed out how dramatic changes in the
health care industry are affecting the practice of OD in that setting. They noted how
changes in the nature of the health care product and the way it is delivered, how
technology is being adapted, and how health care is paid for are altering fundamentally
the industry’s structure and making it more difficult to identify the target of change. To
be effective under these new conditions, OD practitioners will be under considerable
pressure to demonstrate their competence in areas, such as culture, alliances and
networks, and organization design. Change projects likely will be focused on
integrating a diverse set of previously uncoordinated stakeholders. They will be more
reactive than proactive; more solution-oriented than people-oriented.
Linda Purrington and Paul Sparks described the decline of the traditional model
of education, one that had been based on principles of industrial organization. They
suggested that close public scrutiny from multiple stakeholders and shifts in
technology and society are demanding a new model, one that leverages technology
and shifts the goals of the system to learning. Despite recent failed attempts at reform,
a variety of OD programs hold great promise to shift the focus of education to the
development of learning communities.
Ray Patchett’s section suggested that the public sector is more bureaucratic
and adheres more strongly to bureaucratic norms than does the private sector. Thus,
differences between the two sectors stem largely from differences in underlying value
structures that encourage people to behave in different ways. He indicated that many
of the differences between the public and the private sectors may be a matter of
degree, rather than kind. Further, the public sector has multiple access by multiple
decision makers, which can make it difficult to know who is really at the top of the
organization. Thus, OD interventions in the public sector focus more on
technostructural interventions, such as workflow design and structure, than on
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process-oriented interventions, such as team building or performance management.

Despite these differences, OD interventions in the public sector have an admirable
track record of success, nearly equal to the success rate in industrial settings.
Otis Baskin presented a family business system model to underscore the
important differences between traditional organizations and family businesses. The
family, business, and ownership subsystems hold distinct and often conflicting values
that make diagnosis and intervention in family businesses complex. The model also
served as a diagnostic framework to guide inquiry into a family business. Effective OD
interventions must account for these three subsystems, the relationships among them,
and be sensitive to the family interpersonal dynamics that are likely to pervade the
entire effort.
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Chapter 23: Future directions in organization

development
- Explore the trends occurring within organization development (OD) and the
different futures they suggest for the field’s progress.
- Explore the trends occurring in the larger context within which OD operates and
how they are likely to influence future OD practice.
Trends within organization development

Three trends within OD: traditional, pragmatic, and scholarly.
1. Traditional trend. A return to OD’s traditional values and practices. OD should
be driven by long-established values of human potential, equality, trust, and
collaboration. Traditionalists propose that OD should do what is “right” by
assuring that organizations promote positive social change and corporate
citizenship. Strong focus on process interventions -> organizational processes
are transparent, possess integrity, treat people with dignity, and serve diverse
stakeholders. These processes should lead to greater organization
effectiveness.
2. Pragmatic trend. Increasing attention to professionalization of the field and
emphasis on relevance. OD practitioners should be certified like most other
professionals. OD should require certification of members, create a common
body of knowledge, define minimum levels of competencies, and institute other
regulatory infrastructure. Emphasis on change technologies. Performance
outcomes of OD work is important  relevance. Process interventions are not
seen as ends in themselves but as means for implementing change and
achieving the desired results.
3. Scholarly trend. Focuses on understanding, predicting, and controlling change.
It is less concerned about how OD is defined, what its values are, how it is
practiced, or whether an OD practitioner is involved except as potential
explanations for change success. Unlike traditionalists and pragmatists,
scholars are concerned with creating valid knowledge, and with generalizing
conclusions about how change occurs, how it is triggered, under what
conditions it works well, and so on. Preferred method  action research.
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Implications for OD’s future
OD will continue to experience internal conflicts in the short-term

The traditional and pragmatic trends hold different and often conflicting views of how
the field should evolve.
- Traditionalists fear that OD is becoming too corporate and may unwittingly
collude with powerful stakeholders to promote goals that are inconsistent with
OD’s social responsibility and humanistic values.
- Pragmatists worry that relying too heavily on traditional values will reinforce
ODs “touchy-feely” reputation. Focusing on human potential exclusively will
doom OD to irrelevance in today’s highly competitive organizations.
OD will become more integrated in the long term

There is considerable common ground among the diverse trends within OD, and the
emergence of a more integrated view of the field seems likely in the long term.
- Both the traditional and the pragmatic trends agree that applying behavioral
science to organizations can improve effectiveness, increase member
satisfaction, and build capability.
- Both trends believe that knowledge and skill should be transferred to a client
system, and all three trends believe that a body of theory and practice underlie
the process of change in organizations.
Given OD’s history, it’s long-term future is likely to be some blend of practitioner
values-in-use (traditional trend), professional change practice (pragmatic trend), and
change theory (scholarly trend).
- A pragmatic and research-driven OD would be cold and impersonal
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- A traditional and research-driven field would be naïve and irrelevant to

economic realities
- Traditional and pragmatic-driven OD would be intuitive and noncumulative.
- An integration of the three trends will assure that OD has moral purpose, drives
sustainable bottom lines, and represents a healthy balance of art and science.
OD cannot view systems only as objects with inertia, structure, resistance, and
permanence, but as social processes produced, maintained, and changed through
conversations that are flexible, aspirational, and changeable.
Trends in the context of organization development

Several interrelated trends are affecting the context within which OD will be applied in
the near future.
The economy
The transition to a global economy is for the most part unmanaged and raises
questions about three key issues: cultural diversity, income distribution, and ecological
sustainability.
The workforce
The workforce is becoming more diverse, educated, and contingent.
- Organizations will need to develop policies and operating styles that embrace
the changing cultural, ethnic, gender and age diversity of the workforce.
- A more educated workforce is likely to demand higher wages, more
involvement in de decision-making process, and continued investment in
knowledge and skills.
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- The continued high rate of downsizings, reengineering efforts, and mergers and
acquisitions is forcing the workforce to become more contingent and less loyal.
Technology
At the core of information technology is e-commerce, an economy that knows no
boundaries. Technology is also changing and enabling a variety of organizational
processes. Productivity improvements are a function of both the technology itself but
also the organization adjustments to work skills and the entire sociotechnical system.
Organizations
The increasingly networked and knowledge-based nature of organizations is likely to
shape OD’s future. In an organizational world that is technically enabled, fast-paced,
and networked, there will be a premium placed on learning and knowledge
management. Both organizational members and OD practitioners will be joint learners,
exploring new territory together. New structures and systems will transcend both
internal and external organizational boundaries, remove barriers to learning, and
facilitate how employees acquire, organize, and disseminate knowledge assets.
Implications for OD’s future

OD in the future will support a policy of “responsible progress”. Responsible progress
begins with an economist’s definition of an effective system, integrates traditional OD
and more recent effectiveness values, and promotes a set of practices to actualize
those values. Responsible progress defines a policy that supports economic success
and innovation, promotes efficiency and progress, but incorporates cultural diversity
and ecological sustainability to produce a more balanced view of effectiveness. It
defines a vision, strategy, and future path for OD.
OD will work to shape a global economy populated with flexible, innovative, networked,
and ecologically responsible organizations that thrive on cultural diversity. OD is more
likely to develop interventions that drive effectiveness in a broader range of
organizations, support technological and managerial innovation, and advocate for
ecologically sustainable and socially diverse practices.
OD will be more involved in driving effectiveness in a broader range of

organizations
Traditionally, OD focused on large business organizations, but three other types of
organizations increasingly will become targets of planned change: small
entrepreneurial start-ups, government organizations, and global social change
organizations.
Not only will OD be applied to a broader range of organizations, it will also be more
concerned with effectiveness than in the past  embedding OD skills in managerial
roles, integrate OD interventions into core business processes.
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OD processes will be more involved in supporting technological and managerial

innovation
According to the responsible progress policy, innovation is the primary driver of
economic success. Innovation helps to create new products and services, the
processes to manufacture and distribute them (technological innovation), and the
methods and activities necessary to govern and organize systems toward some goal
(managerial innovation). In the future, OD will be more involved in shaping
technological and managerial innovation according to the principles of responsible
progress.
OD interventions that support innovation need to adapt to current technologies (for
example video conferences, social networking theory etc.) and develop virtual
facilitation skills that recognize these dynamics.
Despite the enablement of increased innovation speed, there are physical,
psychological, cultural, and ecological limits to reductions in the innovation and change
cycle. To fulfill the promise of responsible progress, innovation must not only support
economic success, but must do so in ways that do not standardize or homogenize
world cultures. OD practitioners can help organizations increase their innovative
activity and raise the questions of diversity and ecology as the process unfolds.
OD will become more concerned with social and ecological sustainability

Most sustainability models go beyond ecological concerns to promote a
multidimensional view called the triple bottom line. In line with responsible progress,
the triple bottom line proposes that organization change and globalization should be
guided by the economic, social, and ecological value that is added or destroyed.
Responsible progress assumes that the practice of OD is capable of working
effectively across cultures. However, we know relatively little about planned change
processes in cross-cultural settings. Alliance development processes and network
structure interventions adapted for cross-cultural contexts have yet to be developed
and will have important applications in the future.
Organizations today and in the future will operate in multiple countries, governments,
and cultures but under one ecological system. Developing and implementing business
models and organization designs that operate globally but support local cultures and
repair the environment will require significant managerial innovation.
Ecological sustainability is likely to be seen as a constraint on economic success and
innovation in the short run. However, honoring the ecology can be a source of
innovation and success. As demonstrated by models of natural capitalism,
sustainability is not a cost or constraint, but as an ingredient and opportunity.
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Summary chapter 23:
In this concluding chapter, we described three trends within OD and four trends driving
change in OD’s context. OD’s future is likely to be the result of the interactions among
the traditional, pragmatic, and scholarly trends as well as how the global economy
evolves, technology develops, workforces engage, and organizations structure
themselves. To be relevant, OD practitioners and the field as a whole must act together
to influence the future they prefer or adjust to the future that is coming. Moving OD
toward rigor and relevance requires more than simple extensions of existing theory
and practice. OD’s ability to contribute to an organization’s success, to shape
globalization, or unite the trends within OD will depend on its ability to generate new
and more powerful interventions that draw on new models and integrated values in
pursuit of responsible progress. Our hope is that this text will be able to inform and
equip the reader with the skills, knowledge, and value awareness necessary to shape
the future.
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Guest lecture 1: Wim van Ernich - Thermiek

Climate is changing → other ways of working
You need unconventional out-of-the-box thinking.
Transitions in different aspects:
- globalization
- technique
- communication
- administrative
- politics
- increased speed
- brain neuroscience
Ted talk of Simon Sinec: triple perspective - why, how & what
Quote of Luc Hoebeke: “organizations don’t exist, but people do. What people do
together forms the organization.”
Visualization is the future in OD.

Visual meetings → process information better
Changing business models:
Osterwalder canvas model:

1. Customer Segments – An organization serves one or several customer
segments.
2. Value Propositions – It seeks to solve customer problems and satisfy
customer needs with value propositions.
3. Channels – Value propositions are delivered to customers through
communication, distribution, and sales Channels.
4. Customer Relationships – Customer relationships are established and
maintained with each customer segment.
5. Revenue Streams – Revenue streams result from value propositions
successfully offered to customers.
6. Key Resources – Key resources are the assets required to offer and deliver
the previously described elements…
7. Key Activities – …by performing a number of key activities.
8. Key Partnerships – Some activities are outsourced and some resources are
acquired outside the enterprise.
9. Cost Structure – The business model elements result in the cost structure.
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Other values than money (for example social, environmental, ethical etc.)
Ending era of financial values.
Brain plasticity: create a state of mind wherein plasticity will be maximized.
Mirror neurons: cause people to learn better when imitating others.

This relates to the visual teaching methods.
254

Guest lecture 2: Diederik Kolb - Achmea

Diederik Kolb is a green belt in Lean Management (for more information on Lean
Management and Lean Six Sigma, try Wikipedia).
Lean: continuous improvement. Strive for perfection
Focus on reducing Mura (variation), Muri (overload) and Muda (waste)

(See image below)
Combine technical system with social system
Most important are the customers. Then employees. In a traditional setting there is a
top-down structure comparable to a pyramid. Diederik Kolb proposes a reversed
pyramid. Because employees are in daily contact with the customers (and not senior
management), their input on improvement points is valuable. With my awesome
drawing skills I will draw this for you:
255

Customers
Employees
Teamleads
Managers
Senior
management
Executive board
Always find the root cause of the problem. You might have to ask “why” 5 times before
you find the real cause of the problem. Quick fixes are no sustainable solutions.
Coaching and guiding with start of the day talk and performance dialogue
Purpose, examples, experience
Improvement Street: amazement, determine impact, generate ideas, implement &

party
256

257

Guest lecture 3: Marc Burger - Capgemini

DSM case study: Global HR transformation
Background:
Global societal trends:
- Health & fitness
- Global shifts, to India, china etc. (innovation also goes there)
- Climate & energy, put a huge demand on sustainability
Demands are huge, they need to remain cost-competitive

Talent management: attract talented people.
Darwin track: major cost-reduction program.

Decrease number of FTE’s by 50%. Cost reduction is also significant.
HR transformation program; restructuring of the HR department

Finance rule; HR doesn’t generate money, it only uses money as a support function
Too much money is spent on transactional processes (make sure everyone gets paid)
Labor costs are too expensive, a lot of money goes to attracting the right talent
Turnover is very low (so maybe they pay too much?)
Causes: low standardization, huge technology costs, tendency to make things

complex (engineering mentality), HR business partner quality is very low (business
was not considering HR as a partner in running the business).
Conclusion: strong need to review total HR service delivery model, reduce

transactional costs & enhance business partnering capabilities in order to increase
quality and reduce costs.
Mentions attracting talent a lot  important

Need cost reduction for the compensation of talented employees
Shareholders will reward for the best results. Talented employees will generate best
results.
Entering & contracting

To what extent can you broaden the problem (ownership of the problem)
Make sure the conditions are in place to succeed.
258

New future model for HR / same time do the business change

Program management office for HR transformation program
Insights and benchmarks to incorporate competitiveness into the new model
Bringing costs down from 80 mil to 50 mil a year, and FTE’s reduce with 50%
Snow white; sensitive program so it has a codename. Outsourcing transactional HR
processes.
Deep dive: deliver insights HR organization

Hackett = benchmark organization
Build on initiatives already in place and incorporate them into new program.
Timelines and deliverables need to be aligned

You need to plan for possible obstacles that lead away from your initial plan
(contracting phase)
Create baseline and recreate your scope to adjust
Success factors:
Use existing initiatives that are already in place
Translation of business target to individual target
Shift governance, make sure HR is reporting to CHRO
Align with Business Groups (BG’s) because they keep asking for support but you have
to set a clear target in order to reduce costs (less people, same demands).
People of DSM in your team will stay there when Capgemini people are gone, so this
way you make sure the organizations keeps implementing your values.
PMP methodology  making sure you are complying with how DSM is running their
programs
Diagnosing:
Hackett: benchmark study. How is DSM doing in comparison with companies that are
comparable in terms of size, production process, global coverage etc.
0-measurement: following that you can show improvement
The higher you get in the organization, it is only about money and shareholders. Not
about the quality of the solution anymore. Middle management more focus on how it
works in practice etc.
Different discussion  hard measurement (quantitative underpinning of business
case)
Burning platform for the board: high HR costs per employee. Peer group is around
50% less.
259

Do things differently in order to win together: pole jumping with jumping on backside
vs frontside
We need a high performance joined up HR organization (quality and efficiency)
Designing interventions:
Ulrich model built around 4 building blocks:
- Business partners (HR people who interact with business groups)
- HR COES (real experts, specialized in reward / center of excellence)
- Transactional HR (paycheck process, standardize and outsource)
- Customer groups: line management and employees. HR needs to stick to their
core and line management needs to fulfill their people management role.
260

Guest lecture 4: Corline van Reenen - Schouten

Global
The real story about HRD interventions
A ship is only as strong as its crew – Jan Schouten
Schouten: trainen, opleiden, coachen, organisatieadvies
Values: GREINS  groei, rebels, echt, impact, nieuwsgierig, samen. Having values is
important.
Performance appraisal conversations are the number one dissatisfiers at work

In practice it’s not working. What is working is setting goals.
KPI not part of the conversation.
Employees see appraisal as a very subjective thing. You think you have done well, if
you are a high performer it is dissatisfying, but also if you are a low performer.
261

Improvements:
Input for appraisal process
1. Select evaluators
2. Ask feedback
3. Give feedback
4. Collect and review input
5. Discuss feedback in EoY discussion
Manager gets more feedback from colleagues that he/she works with (4 to 6). Manager
collects all the feedback and makes a report of it and can share feedback during
performance appraisal.
Good intentions, after this was introduced there were some problems:
Difficult to get objective feedback, time-consuming, difficult to give negative feedback
to someone you work for (especially your boss), no trust in the system (how
anonymous is it)
The manager collected the feedback and could decide whether to share it or not.
262

HR has a mediator role in dilemmas like this.
Example: manager has rated all his employees a ‘5’ and wants to give all of them the
same salary increase as they are all ‘good people’. However, from previous
conversations and feedback from HR colleagues you as compensation manager know
that there are significant performance issues for some of his employees. What to do?
Involve clients to give feedback to not only have ratings from within the team but also
outside the team. Link to competencies and not just to tasks (andersom?). Make it
objective.
People are afraid to give strong feedback to colleagues. Want diverse input for the end
of the year appraisal. Multiple sources of feedback. You have to build trust between
each other.
Other approaches:
Hutten happiness check – twice a year
They measure how happy you are with this company. If you are not happy they will
discuss with you how you can get happier.
Microsoft & Accenture have stopped with one a year appraisal. New focus is on
strengths and growth.
With AGILE/SCRUM- working teams appraisal is done in the team (Buurtzorg)

Not the core purpose to get rid of appraisal, more about agile working and fast
responding to changes.
Frederik Laloe? Reinventing organizations
Own empowerment, own growth, crafting your own job
--> Important change in the field!
Change: how to create a learning culture?

How do I create willingness inside my company? How do I get people to want to
change?
Development of a learning culture: growth mindset, feedback, radical candor

(=openness, is there room to say what’s on your mind)
Growth mindset: Talk about failures vs. doing it right the first time,
Feedback: 365 days of feedback vs. once a year feedback
Radical candor: We can talk about everything vs. we play it safe
Growth mindset crucial to innovate:

Always learning vs. knower
Open to ideas vs. self sufficient
263

Take risks vs. careful

Embrace challenge vs. success focused
Growth mindset: abandon performance appraisal, focus on strengths, feed forward

instead of feedback, talent committees (focus on top 80 and discuss what they learned
and what would we like them to learn next year)
Carol Dweck does these studies at schools à understanding growth mindset
Stimulating feedback
365 days of feedback: feedback app Katch
Continuous vs. one-off/delayed feedback
Manager-owned vs. user-owned
The app was used a lot, there was a great atmosphere with happiness, empowerment
and energy etc. There was a lot of exchange, luckily no fights, the app structure was
good.
We found out it was used for the people who already had growth mindset. People who
were afraid to get feedback also didn’t use the app. Still we are convinced these tools
can help. You are the owner of feedback and you should get it every day. Feedback
is about growth and not just reaching targets.
264

What did we learn from this: Don’t do it with a small pilot first and then at once 30,000
people, it’s better to start in small groups and gradually start implementing it. We could
only see how often it was used, not the content. That is only for the feedback giver
and receiver. So we could not share that with management. If management is not
joining, it’s very hard to implement a change. They said they were going to use it but
they didn’t.
--
Case courageous conversations (training management to have courageous
conversations)
You work in a team with great colleagues, you are very enthusiastic and you enjoy
your work. However, one colleague gets on your nerves, he/she is always expressing
his worry about sticking to the rules and regulations and seems to be slowing down
the progress you are making in the project. You are guarding the timelines and think
you will be running behind to make the deadline. You want to address the problem you
have with your colleague to constantly talk about the agreements in the team. You
have asked 10 minutes of his time to meet.
How do you want to address the problem?
--
Career planning and development interventions
In the future traineeships will stop to exist, because the idea behind traineeships is
that you start as an apprentice and grow from the bottom to the top. Robotics,
digitalization is transforming companies, layer of middle management is disappearing.
There is no way up anymore. There is a way to develop, but traineeships will be
affected (her opinion, not a fact). They could change it into coaching roles, but you
won’t be a manager anymore.
There is a big war for talent going on, the biggest issue is retaining the talent. You
cannot offer them the way up anymore. Younger talent really appreciates development
opportunities. Big issue: employees work long hours and are always emailing, what
are you creating then?
There is room for change in talent management.
Mentoring is where an experienced senior shares his experience with a junior

employee. Nowadays, coaching is hot, career planning not, career development is
your own responsibility.
The labor market is not what it was 15 years ago.
Future of jobs
Top 10 of skills will change in 2020 (source: World Economic Forum)
265

Creativity is becoming more and more important. Hard to develop (intuition). It is

important that school systems also promote creativity.
If your job is not there in the future, do you have a plan B?
266

How can you stimulate learning agility/appetite so that people are willing to look for
other jobs.
Job crafting: take a look at your job and reshape it. What talents do I have? Think on
your own and with your manager on how to use your talent in your job tasks.
Stress and wellness interventions

Role clarification
Supportive relationships
Work leaves
Health facilities
Employee assistance programs
Stimulate people to find out their strengths, talk about it and use it more.
What makes you really happy?
Mindfulness: is there a role for HR in creating mindfulness/happiness in organizations?
You must make the difference
267

268

Guest lecture 5: Nick van Dam – McKinsey &

Company
Global consulting firm  he is global chief learning officer
Learning and development is a profession, we like to have people in a role that really
understand this profession. There is a lot of research on how people learn (on the
brain), amazing changes is technology. Technology is a big driver for change. There
is a huge need for people capability development. What is the path to achieve learning
officer? Lifelong learner.
Reflective practitioner: write about it (articles, books)

Book: You – the positive force in change.
Help people to stay balanced as human beings: mindfulness and meditation
E-learning for kids: available on the internet for free for kids who don’t have access to
education
Today, leading the business is leading the change.

Change management is one of the most important disciplines in organizations.
Impact on change: how to engage people, how to implement IT systems, globalization
etc.  Huge challenges for organizations.
What are the drivers of organizational change? Technology is one of the biggest
drivers.
Mentioned by students: sustainable competitive advantage, customer demands,
innovation etc.
Middle-class consumers are increasing, a lot of people in Asia, people have more
money. Companies are focusing a lot on Asia because there is the biggest growth.
People have more spending power.
You need to know the market, understand the consumers, expand  build subsidiaries
and have people in these countries, tailor products to the culture.
Fortune 500 companies  huge rise of Asian companies.
Workforce: what kind of people do you need?

Automatization/robotization, less need for people. Skip this slide.
Jobs of the future:

Professional triber: somebody who looks at all the roles needed and will source the
roles in the market and bring them on to the team. Companies that work with flexible
labor have professional tribers.
App developers and drone instructors/operators: new professions, you need to look at
what people are needed today. Right skills and high demand.
269

What kind of skills are important?

1. Complex problem solving skills: at McKinsey it’s a core competence
Fastest growing competency is creativity. Why is it important? Creative people

generate ideas. Companies need to think about how they can do things differently.
Creative people will help the organization to be successful.
Soft-skills: how to work with people is very important.
We need to teach leaders how to make things happen in organizations in a different

way than in the past. 20th century organizations: hierarchy, top-down, people follow
leader, national
Today: organizations are fluid, more people to report to.
Winning people over, influencing people, motivating people, how to work with virtual
teams, multicultural team setting: being able to make things happen  change
management.
Digital competence: in the near future 90% of all the jobs require digital competence.
HR analytics  HR leader of tomorrow. Marketer of today needs to understand big
data, engineer something?
Recommend taking a coding class. Incredible important. Technology will be a huge

driver of change.
How information systems are built, how to process big data.
EdX / Coursera: course 2 hours a week for free on programming and coding!
36% of people in Europe do not have a competence in digital.
Driver of the industrial revolution: steam engine  Technological driver

Second industrial revolution: electricity. Make it possible to run factories.
Third industrial revolution: computer power, chips,
Today we are at the beginning of the fourth industrial revolution: new generation of
disruptive technologies  artificial intelligence, robots, mobile internet, green energy,
machine learning (smart software, it will train itself), 3D printing, etc.
Technology breakthroughs are speeding up (see slide).

Adoption of new technologies is also accelerating. How much time does it take to reach
50 million people?
Examples of application of disruptive technologies: 3D printing of ADIDAS shoes 
now 2 weeks with only 2 people. Self-service: face recognition software. Multilingual
robot will help you at the reception desk of an hotel. Drone package delivery to
people’s house (Amazon), Uber autonomous car (self-driving).
270

Lifespan of fortune 500 companies is getting shorter. Key challenge for organizations:
(example of Nokia vs Apple) aligning themselves with the strategic/technological
environment. People need to take risk and do things differently.
Overall business strategy:
Case Deloitte consulting:

Why do professional firms offshore services to India?
Cheap labor  cheap master graduates. Low cost services.

Talented people
Case: Offshore 25% of roles to India. What are OD & Change complications?
- Resistance  risk that you lose talented people because they will leave the
organization.
- Language and culture barriers. Cultural challenge: Dutch culture is very direct,
but Indian culture is more polite.
- Strategy aligning with culture: localization vs standardization. Conflicting norms
and values.
- Brand: negative impact if you don’t do this well. You need to pay them well,
provide them with training and outplacement interventions to make them feel
valuable.
- Determine criteria which jobs go to India: people who are in contact with the
client are hard to offshore. People in India are more in the back office.
- Legislation, regulations, labor relationships, power outages
Organizations need to continue innovate and change, technology will be a huge

disruptor in the future on how people work, lifetime employment, etc.
271

Guest lecture 6: Woody van Olffen – TIAS
Note: slides are the same as last year. If you want them, email me. Thanks to Inge
van Duijnhoven (topper!)
“Three dialogues to development”
The major takeaway of today is that the most important thing for organizational
development is dialogue.
He is a hybrid: scholar-practitioner: works at the university to teach but also consults

businesses.
What is development to you?

Number of aspects: (students name examples) cognitive development, learning etc.
“What it means to develop an organization is perhaps the least developed aspect of

OD theory”
Two extreme states of development:

Underdeveloped state vs. developed state
272

The fully functioning person (Rogers, 1961)

The development tendency: people have an innate tendency to develop (if the
conditions are good, people will develop out of themselves).
Make sure the context is such so people can flourish.
These same principles are in every area of development (parallels in personal life)
Bringing organizations to a higher level of development: feedback
273

What is the magic ingredient to foster adaptive development? (compare columns)
Central element is always create feedback!
Preliminary conclusion:
The main intervention: organizing dialogue

Methods of organizing dialogue, all kinds of interventions
274

Adaptive development is a dialogic co-creation  higher state development
Talk to people, go out in the field, enter into the dialogue, and listen to what all parties
have to say. Dialogue is a two-way street. In a dynamic environment there a true co-
creations of development because of interactions with the clients.
Different skill set needed to lead a change than to lead an organization.
World café: different tables where different themes are discussed, after 20 mins you
switch tables. Only the chairman of each table stays at the same place  as much
input as possible
What quality should be developed in the organization, if the organization has to choose
 most promising quality.
275

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Cummings & Worley - Organization

Development & Change - summary 10th

The Marketplace to Buy and Sell your Study Material

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Thomas G. Cummings & Christopher G. Worley

10th edition, 2015

Tilburg University School of Social and Behavioral Sciences

Master Human Resource Studies

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Summary Chapter 17 182

* Chapter 22: Organization Development in Nonindustrial Settings: Health Care, School

* Chapter 23: Future Directions in Organization Development

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Chapter 1: General introduction to Organization

Worley and Feyerherm suggested that for a process to be called organization

Important: OD is different from other approaches to organizational change and

Difference between OD and Change Management

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Difference between OD and Organizational Change

Three major trends are shaping change in organizations: globalization, information

Organization development plays a key role in helping organizations change

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Similarly, all staff specialists, such as financial analysts, engineers, information

Current practice in organization development is strongly influenced by these five

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Chapter 2: The Nature of Planned Change

Theories of planned change describe the activities necessary to modify strategies,

Lewin’s change model

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1. Unfreezing: Involves reducing those forces maintaining the organization’s

Variations on this model:

The action research model

Focuses on planned change as a cyclical process of research and action, involving

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Traditionally aimed at both helping specific organizations implement planned change

1. Problem identification: problems that might be solved with help of ODP.

OD practitioners work with members to facilitate the learning process; no party

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- increasingly applied to promote social change and innovation.

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The Positive Model

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organization’s successful past, members collectively visualize the

Comparisons of the three change models

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Entering and contracting

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Three levels of activities: organization issues, group-level issues and individual-level

Planning and implementing change

Implementing interventions is concerned with leading and managing the change

Evaluating and institutionalizing change

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When applied to organizations facing problems in being under-organized, planned

Domestic vs. international settings

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Conducting OD in international settings can be highly stressful on OD practitioners.

Critique of planned change

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Chapter 3: The organization development

Competencies of an effective OD practitioner