Week 1

Organization Change and

Development: An Overview

Copyright © 2010 Dr Ismail Mustapha, IIUM

Content
• Definition of OD
• Growth and relevance of OD
• Historical background
• Evolution in OD
• Course approach
– The process (vertical
approach)
– The interventions (horizontal
approach)

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 2

What is OD?
• A process that applies behavioral science knowledge
and practices
– To help organizations build the capacity to change
and achieve greater effectiveness, resulting in:
• Increased financial performance, and
• Improved quality of work life
• Differences from other planned change efforts (e.g.
from technology innovation, new product development, etc)
– Focuses on building the organization’s ability to
assess its current functioning and to achieve its goals
– Oriented to improving the total system

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 Organizational Culture
• Organizational culture (or corporate culture)
comprises the attitudes, experiences, beliefs and
values of an organization
• Specific collection of values and norms that are
shared by people and groups in an organization and
that control the way they interact with each other and
with stakeholders outside the organization (behavior)
• Question: Strong culture versus weak culture?

Organization Development
• OD is about creating change in organizational culture
• About “intervention” tools for OD consultants (internal or
external), sometimes referred to as the “change agents”
(these are experts on the process and contents)
• The CEO or driver of change is the “champion”—to lead
the change
• Focuses on “functioning” rather than “performance.”
– More about “practice” of the art (e.g. consultants)
– More on the “personal” and “social” characteristics of an
organization system
• Change management is wider in context, OD more
limited in scope
• Question: What are change masters? (or change artists)
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 Classical Definitions of Organization
Development
• Planned process of change in an organization’s culture
through the utilization of behavioral science technology,
research and theory (Warner Burke)
• Long-range effort to improve an organization’s problem-
solving capabilities and its ability to cope with changes in its
external environment with the help of external or internal
behavioral-scientist consultants, or change agents (Wendell
French)
• An effort (i) planned, (ii) organization-wide, and (iii) managed
from the top to (iv) increase organization’s effectiveness and
health through (v) planned interventions in the organization’s
“processes” using behavioral science knowledge (Richard
Beckhard)
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OD defined and facts (1/5)

• Applies to strategy, structure and processes of an
entire system, e.g. organization, a production plant, a
department work group.
– e.g. what is involved to change an organization’s strategy
• Will involve understanding how the organization relates to a
wider environment and how those relationships can be
improved
– Might require changes in performing tasks
– Methods of communications
– Processes in solving problems

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 OD defined and facts (2/5)
• OD based on behavioral science knowledge and
practice (e.g. leadership, group dynamics, work
design, and strategy, organization design,
international relations)
– Includes the personal and social aspects of organization
– As opposed to other topics such as management
consulting, technology innovation, operations,
management, etc

OD defined and facts (3/5)

• About managing planned change, but not in the
formal sense
– “formal” as in management consulting or technology
innovation, which are:
• Programmatic and expert-driven
• Can be flexible adaptive, and revised as we get
along the project and as new information become
available
– e.g. when it is discovered we need to introduce cross-
cultural training (e.g. change in international corporations)

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 OD defined and facts (4/5)
• Involves both creation and subsequent reinforcement
of change.
– Reinforcement means actions to maintain or sustain the
new behavior arising from change, e.g.
• in self-managed work teams (and role of supervisors). More
freedom allowed as teams become more effective
• Linking reward system with desired behaviors
• Informal recognition, encouragement and praise
• Make people feel good about early successes

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OD defined and facts (5/5)

• OD must be oriented to improving organizational
effectiveness:
– Effectiveness means
• ability to solve its own problems and to focus attention and
resources to achieve this.
– Members have gained skills and knowledge that are necessary
• results in
– high performance (including financial returns, quality products
and services, high productivity, continuous improvement) and
– high quality of work life
– which in turn results in
► Responsive to stakeholders needs (why? they provide resources
and legitimacy)
► Ability to attract and motivate effective employees

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 Examples of OD activities
• Team building with top management (“games”)
• Organizational assessments
• Structural change (how groups perform tasks)
• Job enrichment
• Career development
• Training and development
• Coaching
• E-learning
• Innovation
• Leadership development
• Talent management
• Re-engineering
• Conflict management
• Motivation
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What are the organizational issues?

• Absenteeism
• Interpersonal conflicts
• Intergroup conflicts
• Lack of cooperation
• Low productivity
• Well-being
• Lack of motivation
• Work stress
• Uninvolved employees
• Boring jobs
• Poor employee performance
• Unclear tasks
• No feedback about quality
of work
• No training opportunities
• No sense of direction
• Poor leadership
• Organizational structure
• What else?

Which are primary and which are secondary?

 How is OD different?
• Similarities between OD and change management
(CM):
– Both address the effective implementation of planned
change
– Both concerned with sequence of activities, processes and
leadership issues
• Differences:
– Underlying value proposition
• OD: human potential, participation, development
• CM: cost, quality, and schedule
• OD: transfer of knowledge and skill
• CM: not necessarily transfer of these skills
• Change management is a wider concept than OD and can
apply to any kind of change
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Growth and relevance of OD

• Three major trends shaping OD:
– Globalization (liberalization, WTO, opening of markets, emerging
markets, terrorism)
– Information technology, affecting:
• How work is performed
– Downsizing, working from homes, telecommunication
• How knowledge is used
– Reducing the concentration of power at the top
• How cost of doing business is calculated
– (new mode of collection, storage, manipulation and transmission of
data)
– Managerial innovation (networks, strategic alliances, virtual
organizations)
• More interests by organizations in change management
– e.g. re-engineering/downsizing resulting in increased flexibility, new
large-group interventions, speed of change, organization learning
• More providers of consultancy services, even by accounting firms,
hence easier to get external advice 15
 The five stems of OD practice

Laboratory Training

CURRENT OD PRACTICE
Action Research/Survey Feedback

Normative Approaches

Quality of Work Life

Strategic Change

1950 1960 1970 1980 1990 2000 Today

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Laboratory Training Background (1/2)

• T-group pioneered by Kurt Lewin (MIT), 1946
– Small, unstructured group, participants learned from their own interactions
about
• interpersonal relations
• personal growth
• leadership
• group dynamics
• Started when Connecticut Interracial Commission asked MIT to research
on training community leaders
– Workshop developed and community leaders brought together to learn about
leadership and discuss problems
– At end of each day, researchers discussed privately what behaviors and group
dynamics they had observed
– Community leaders asked whether they can sit in on these feedback sessions,
and thus the “birth” of first OD feedback concept and how people reacted to
data about their own behavior
• Very positive results from these pioneer workshops:
– Feedback about group interaction was a rich learning experience
– The process of “group building” had potential for learning that could be
transferred to “back-home” situations
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 Laboratory Training Background (2/2)
• From this success, U.S. government funded the
establishment of the National Training Laboratory, followed by
other sponsors e.g. Carnegie Foundation
• In the 1950’s further trends emerged
– Emergence of regional laboratories
– Expansion of summer programmes to year-round sessions
– Expansion of T-groups into business and industry
• Appearances of now-famous names such as McGregor, Herbert
Shepard, Robert Blake, Richard Beckard, etc.
• Over time, NTL no longer known for developing OD
interventions, but more for team-building

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Action research and survey feedback

background
• Pioneered by Kurt Lewin, et al in 1940’s
– Discovered that research needed to be closely linked to action if
organization members were to use it to manage change
• Study process involved:
– Collaborative effort between both organization members and social
scientists to collect data about an organization’s functioning
– Analyze it for causes of problems
– Devise and implement solutions
– After implementation, further data were collected to assess the results
– Data collection and action often continued over a few cycles
• Benefits:
– Organizations were able to use research on themselves to guide action
and change
– Social scientists were able to study that process to derive new
knowledge and could be used elsewhere
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 Some classic action research and
survey feedback studies
• Lewin/French: Development of participative
management to overcome resistance to change
• Collier: Improvement of race relations
• Likert and Mann: Scientific approaches to attitude
surveys (“5-point Likert scale”) and the “interlocking
chain of conferences.”

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Normative background approach

• Built on the premise/belief that the human relations approach
represented a “one-best way” or “what-ought-to-be-” way to
manage organizations
• Solutions tend towards the “participative management
approach”
– Exploitive authoritative systems (system 1)
– Benevolent authoritative systems (system 2)
– Consultative systems (system 3)
– Participative group systems (system 4)
• Methodology:
– Likert’s participative management system
– Blake and Mouton’s Grid OD program
• Question: antonym to normative? (vs. positive (in economics), or
vs. contingent)
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 Four types of management systems
• Exploitive authoritative systems
– autocratic, top-down leadership
– Employee motivation based on punishment, maybe occasional rewards
– One-way communications (downwards)
– Little lateral interaction or teamwork
– Decision-making and control reside at the top
• Benevolent authoritative systems
– Same as above, only a little more paternalistic
– Some employee interaction, communication and decision-making but within boundaries
• Consultative systems
– Increased employee interactions, communication and decision-making
– Employees are consulted about problems and decisions, but final decisions made by
management
– Productivity is good and employees moderately satisfied
• Participative group systems
– Opposite of exploitive authoritative systems
– Based on group methods of decisions making and supervision
– High degree of member involvement and participation
– Work groups involved in setting goals, making decisions, improving methods, and
appraising results
– Communication both laterally and vertically
– High levels of productivity, quality and member satisfaction
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Likert’s survey-feedback intervention

method
• Issuance of questionnaire to determine “profile of
organizational characteristics”
• Solicited opinions from members about present and ideal
conditions of six organizational features:
– Leadership
– Motivation
– Communication
– Decisions
– Goals
– Control
• Results fed back to other groups within organization, and
examined for gaps between the present and ideal conditions
• Members then generate action plans to move organization
towards the System 4 conditions
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 Blake and Mouton’s Grid Organization
Development
• Original research on 198 organizations
• Findings: two foremost barriers to excellence in organizations
– Planning
– Communications
• Further studies on these two barriers led to a normative model of
leadership: The Managerial Grid Model
– Concern for production
• Accomplishing productive tasks
• Developing creative ideas
• Making quality policy decisions
• Establish thorough and high-quality staff services
• Creating efficient workload measurements
– Concern for people
• individual’s personal worth
• Good working conditions
• Degree of involvement or commitment to completing the job
• Security
• Fair salary structure and fringe benefits
• Good social and other relationships
• Frequent to find that managers are concerned with one at the expense of
the other
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The Managerial Grid Model

9 9,1 Controlling (Direct & Dominate)
1,9 9,9
Concern for people

• I expect results and take control by clearly stating a course of action

• I enforce rules that sustain high results and do not permit deviation
1,9 Accommodating (Yield & Comply)
5,5 • I support results that establish and reinforce harmony
• I generate enthusiasm by focusing on positive and pleasing aspects
of work
5,5 Status Quo (Balance & Compromise)
1 1,1 9,1 • I endorse results that are popular but caution against taking
unnecessary risk
1 9 • I test my opinions with others involved to ensure ongoing
Concern for results acceptability
(production) 1,1 Indifferent (Evade & Elude)
• I distance myself from taking active responsibility for results to avoid
getting entangled in problems
• I take a passive or supportive position
9,9 Sound (Contribute & Commit)
• I initiate team action in a way that invites involvement and
commitment
• I explore all facts and alternative views to reach a shared
understanding of the best solution
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 Six phases in the B&M’s Grid OD
• 6 phases to overcome the planning and
communication barriers
– Grid seminar (1 week)
– Team development
– Intergroup development
– Developing the ideal model of organizational excellence
– Implementation of model
– Evaluation of the organization
• Normative approach in OD has now given way to a
contingency view acknowledging the influence of
– External environment
– Technology
– And other forces

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Productivity and quality-of-work-life

background
• Originated from Europe in 1950s and US in 1960s
• Basically to develop work designs integrating technology and
people to create a more high quality work-life environment
– meaning high job satisfaction and mental health
– Also job enrichment, self-managed teams, labour-management
committees
• Approach;
– Joint participation by unions and management in design of work
– Gives employees high level of discretion, task variety and feedback
about results
– Discovery of self-managing work groups made possible by multiskilling
workers with autonomy and information
• Evolution
– From work design expanded to wider aspects (reward systems, work
flows, management styles, etc)
– Now, synonymous with “employee involvement” (EI) or employee
empowerment 27
 Strategic change background
• Most recent background in OD evolution
• Because of increasing complexity and uncertainties in
technology, political, and social/cultural environment
• OD has to be looked at from high-level organization
perspective
– Arised from the need to align organization design with organization’s
environment and strategy
– Strategic change interventions to improve organization’s relationship to
its environmnet
• Richard Beckhard and “open system planning”
– Must first describe and analyze organization’s environment and
strategy
– Extending into mergers and acquisitions, strategic alliances and
network development
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Evolution in OD
• The five approaches have strongly shaped and influenced the
OD field
• More recent were the quality-of-work-life and strategic change
backgrounds
• Very important elements are the transfer of knowledge and
skill and the building of capacity to better manage change in
the future
• Current developments influenced by globalization and
information technology trends
– Growth in OD network (professional societies, etc)
– Previously OD in firms considered confidential, now increasingly being
shared by large corporations
– More sectors have entered into OD, e.g. schools, communities, local,
state and federal governments
– Increasingly gone international
• OD is still evolving 29
 Self-assignments
• What are change masters?
– What are the skills of change masters (see books written
by Rosabeth Moss Kanter)
• List up all the organizational issues you can think of.
Separate the primary and secondary issues. Draw
up map of the issues and link them with the various
intervention tools (which are categorised into 4
groups, as in Chapters 12-22)
• What is the difference between Organizational
Behavior and Organization Development?

OD map

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 Behavioral science vs. social science
Science
Natural sciences
Physical sciences Chemical sciences Biological sciences Cognitive sciences

Behavioral sciences

Neural-(Decision sciences) Social-(Communication sciences)

Psychology including Cogntive organization Anthropology Organizational behavior

social psychology theory and consumer
psychology
Psychobiology Management science and Organization studies & Social networks
operations research psycho-economics
Social neuroscience Ethology Memetics Organizational ecology

Social sciences
Sociology Economics Political science Economic sociology

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