Organization Development

and Reinventing the

Organization

Learning Objectives

Define OD and recognize need for change.

Describe culture and understand its impact.

Understand the psychological contract.

Describe five stages of OD.

The Workout: Organization

Changes at GE (part 1 of 2)
GE has training center for managers.
Participants said GE was slow to make
changes.
Workout is program that came from sessions.

The Workout: Organization

Changes at GE (part 2 of 2)
In workout employees take the leadership in
bringing about changes.
GE continues to use workout so it can reinvent
itself.

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Challenges for Organizations

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

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Figure 1.1
The Organizational Environment

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

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OD Is:

Planned.

Organization wide.

Managed from top.

Increases organization effectiveness.

Planned interventions.

Uses behavioral science knowledge.

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The Characteristics of OD
Planned change.
Collaborative approach.
Improve performance.
Humanistic values.
Systems approach.
Scientific approaches.
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Table 1.1
Major Characteristics of the Field of OD

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Our Changing World:

Germany in Slow-mo (part 1 of 2)
Germany entering 2nd decade of stagnation.
A model of world in 70s and 80s.
Reputation as Europes unchanging core.
History of blaming others for problems.

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Our Changing World:

Germany in Slow-mo (part 2 of 2)
Some looking inward for causes.
Problem traced to job-protection law of 50s.
Unions block proposals to reform labor laws.

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Why OD?
Most cited reasons for beginning change
program:

The level of competition.

Survival.

Improved performance.

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Primary Goals of
Change Programs
Increase productivity.
Increase responsiveness.
Improve competitive position.
Increase employee involvement.
Increase employee morale.
Develop new managerial skills.
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Table 1.2
Major Goals of Large-Scale Change Programs

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Factors Leading to
Emergence of OD
Need for new organizational forms.
Focus on cultural change.
Increase in social awareness.

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The Only Constant Is Change

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

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Successful Firms
Share These Traits

Faster.

Quality conscious.

Employee involvement.

Customer oriented.

Smaller.

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Figure 1.2
Changing Organization of Twenty-First Century

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OD in Practice:
Trilogy Software (part 1 of 2)
Trilogy Software example of shifting
organizational structures.
Workers are shareholders, managers, and
partners.
Biggest worry is not facing down other
businesses.

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OD in Practice:
Trilogy Software (part 2 of 2)
Depends on talented people.
Economy fostering new kinds of practices.
This case shows major element in planned
change is planning for organizational culture.

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

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Who Does OD?

(part 1 of 3)

OD practitioners consist of specialists and those

applying OD in daily work:

Professionals and specialists trained in OD.

Managers and leaders applying OD.

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Who Does OD?

(part 2 of 3)

OD specialists:

Internal practitioners from within

organization.

External practitioners from outside

organization.

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Who Does OD?

(part 3 of 3)

Activities include:

Team leaders developing teams.

Building learning organizations.

Implementing total quality management.

Creating boundaryless organizations.

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Organization Culture
A system of shared meanings including:

Dress.

Feelings.

Patterns of behavior.

Attitudes.

Language.

Interactions.

Value system.

Group norms.

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Norms

(part 1 of 2)

Organized and shared ideas of what members

should do and feel.
How behavior is regulated.

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Norms

(part 2 of 2)

Pivotal norms - essential to accomplishing

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

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

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Figure 1.3
The Socialization Process

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Adjustment to Cultural Norms

and Socialization Occurs in 3
Ways
1.

Rebellion - rejection of all values and norms.

2.

Conformity - acceptance of all values and

norms.

3.

Creative individualism - acceptance only of

pivotal values; rejection of others.

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Figure 1.4
Basic Responses to Socialization

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

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A Model for Change

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

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Figure 1.5
Organization Developments Five Stages

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Five-stage Model for OD Process

(part 1 of 5)
Stage one: Anticipating need for change.

Someone recognizes need for change.

There must be felt need for change.

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Five-stage Model for OD Process

(part 2 of 5)
Stage two: Developing practitioner-client
relationship.

OD practitioner enters system.

Good first impressions and match

important.

Practitioner establishes trust, open

communication, shared responsibility.
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Five-stage Model for OD Process

(part 3 of 5)
Stage three: The diagnostic phase.

Practitioner and client gather data about

system.

Objective is to understand clients

problems, identify forces causing situation,
and select change strategies.

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Five-stage Model for OD Process

(part 4 of 5)
Stage four: Action plans, strategies, and
techniques.

Series of interventions, activities, or

programs aimed at increasing
effectiveness.

Programs apply OD techniques.

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Five-stage Model for OD Process

(part 5 of 5)
Stage five: Self-renewal, monitor, and stabilize.

As OD program stabilizes, need for

practitioner decreases.

Monitor results.

Stabilize change.

Gradual disengagement of OD practitioner.

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