Organization Development and

Change

Chapter Twenty Two:

Transorganizational Chang
Thomas G. Cummings
Christopher G. Worley

Learning Objectives
for Chapter Twenty Two

To understand the rational behind

transorganizational interventions

To compare and contrast the three types

of transorganizational OD interventions:
mergers and acquisitions, strategic
alliance interventions, and network
interventions within each category
Cummings & Worley, 9e (c)

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Transorganizational Rationale

Transorganizational strategies allow

organizations to perform tasks that are too
costly and complicated for single
organizations to perform

Goods and services are exchanged between

organizations and transactions occur

Transorganizational strategies work best

when transactions occur frequently and are
well understood
Cummings & Worley, 9e (c)

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Transorganizational Systems
Members maintain their separate
organizational identities and goals
Tend to be underorganized and member
organizations are loosely coupled
Different from mergers and acquisitions
Network interventions may be appropriate

Cummings & Worley, 9e (c)

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Mergers and Acquisitions

Merger - the 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.

Distinct from transorganizational systems,

such as alliances and networks, because at
least one of the organizations ceases to
exist.
Cummings & Worley, 9e (c)

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Merger and Acquisition Rationale

Diversification
Vertical integration
Gaining access to global markets,
technology, or other resources
Achieving operational efficiencies,
improved innovation, or resource
sharing

Cummings & Worley, 9e (c)

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Merger and Acquisition

Application Stages

Pre-combination Phase
The

organization must identify a candidate

organization, work with it to gather
information about each other, and plan the
implementation and integration activities

Legal Combination Phase

The

two organizations settle on the terms

of the deal, gain approval from regulatory
agencies and shareholders, and file
appropriate legal documents

Operational Combination Phase

Implementing

the operational, technical

and cultural integration activities

Cummings & Worley, 9e (c)

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Strategic Alliances
When two organizations formally agree
to pursue a set of goals
There is sharing of resources, intellectual
property, people, capital, technology,
capabilities or physical assets
Common alliances are licensing
agreements, franchises, long-term
contracts, and joint ventures

Cummings & Worley, 9e (c)

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Alliance Intervention
Application Stages

Alliance Strategy Formulation

Clarify

the business strategy and why an alliance is

needed

Partner Selection
Leverage

similarities and differences to create

competitive advantage

Alliance Structuring and Start-up

Build

and leverage trust in the relationship

Alliance Operation and Adjustment

Cummings & Worley, 9e (c)

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Network Interventions

Involves three or more companies joined

together for a common purpose
Each organization in the network has
goals related to the network as well as
those focused on self-interest
Characterized by two types of change:
creating the initial network
(transorganizational development) and
managing change within an established
network
Cummings & Worley, 9e (c)

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Application Stages for

Transorganizational Development
Identificatio
n

Who should
belong to the
transorganizatio
nal
System (TS)?
Relevant skills,
knowledge,
and resources
Key
stakeholders

Conventio
n
Should a
TS
be
created?
Costs
and
benefits
Task

Organizatio
n
How to organize
for task
performance?
Communication
Leadership
Policies and
procedures

Evaluatio
n
How is the TS
performing?
Performance
outcomes
Quality of
interaction
Member
satisfaction

perception
s

Cummings & Worley, 9e (c)

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Managing Network Change

Create instability in the network
Manage the tipping point

The

Law of the Few: Salespeople,

Mavens, Connectors
Stickiness
The Power of Context

Rely on self-organization
Cummings & Worley, 9e (c)

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