1.Thomas G. Cummings Organization Development and Change
Organization Development & Change
9e
Thomas G. Cummings
University of Southern California
Christopher G. Worley
University of Southern California
Pepperdine University
Organization Development & Change, 9th Edition Thomas G. Cummings & Christopher G. Worley Vice President of Editorial, Business: Jack W. Calhoun Vice President/Editor-in-Chief: Melissa Acuña Executive Editor: Joe Sabatino Developmental Editor: Denise Simon Marketing Manager: Clint Kernen Content Project Manager: D. Jean Buttrom Manager of Technology, Editorial: John Barans Media Editor: Rob Ellington Website Project Manager: Brian Courter Frontlist Buyer, Manufacturing: Doug Wilke Production Service: Integra Software Services, Pvt., Ltd. Sr. Art Director: Tippy McIntosh Cover and Internal Designer: Mike Stratton, Stratton Design Cover Image: Chad Baker, Getty Images
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Dedication
To Chailin and Debbie, the loves of our lives brief contents
contents
Lewin’s Change Model
23 Action Research Model
24 The Positive Model
27 Comparisons of Change Models
29
Entering and Contracting
29 Diagnosing
30 Planning and Implementing Change
30 Evaluating and Institutionalizing Change
31
Magnitude of Change
31
Degree of Organization
35
Domestic vs. International Settings
40
Conceptualization of Planned Change
41 Practice of Planned Change
42
vi Contents
81 Ground Rules
81
79
Organizations as Open Systems
89 Diagnosing Organizational Systems
92
Organization Environments and Inputs
94 Design Components
96 Outputs
99 Alignment
99 Analysis
Time and Resources
Mutual Expectations vii Contents
62
Role of Organization Development Professionals
53
Careers of Organization Development Professionals
59
Ethical Guidelines
61 Ethical Dilemmas
77
Clarifying the Organizational Issue
76 Determining the Relevant Client
76 Selecting an OD Practitioner
99
Quantitative Tools
Limitations of Survey Feedback 147 Results of Survey Feedback 148
Survey Feedback and Organizational Dependencies 145
What Are the Steps? 142
133
Qualitative Tools 130
124 Interviews 126 Observations 127 Unobtrusive Measures 128
Questionnaires
Inputs 113 Design Components 114 Fits 115 Analysis 115
110 Analysis 110
Inputs 107 Design Components 108 Outputs 109 Fits
viii Contents
178 Commitment Planning 179 Change-Management Structures 179 Learning Processes 179
200
Institutionalization Framework
192 Research Design 197
Implementation and Evaluation Feedback 189 Measurement
Developing New Competencies and Skills 183 Reinforcing New Behaviors 183 Staying the Course 184
Providing Resources for Change 182 Building a Support System for Change Agents 183
Activity Planning
Human Process Interventions 156
174 Identifying Key Stakeholders 175 Influencing Stakeholders 175
Assessing Change Agent Power
170 Constructing the Envisioned Future 171
Describing the Core Ideology
Creating Readiness for Change 165 Overcoming Resistance to Change 166
Organization Characteristics 203 Intervention Characteristics 204 Institutionalization Processes 205 ix Contents
The Manager’s Role in Team Building 270 The Results of Team Building 271
Results of Large-Group Interventions 294
Application Stages 287
279 Application Stages 280 Resolving Intergroup Conflict 281
Microcosm Groups
276 Results of Confrontation Meetings 277
Application Stages
268
Kenworth Motors 212 Peppercorn Dining 217 Sunflower Incorporated 239 Initiating Change in the Manufacturing and Distribution Division of PolyProd 241
Activities Oriented to the Group’s Operation and Behavior 268 Activities Affecting the Group’s Relationship with the Rest of the Organization
Team-Building Activities 264 Activities Relevant to One or More Individuals 267
An Episodic Model of Conflict 260 Facilitating the Conflict Resolution Process 261
Group Process 254 Basic Process Interventions 255 Results of Process Consultation 257
Evaluating the Change Agent Program at Siemens Nixdorf (A) 247
x Contents
A Working Definition of Employee Involvement 351 The Diffusion of Employee Involvement Practices 352 How Employee Involvement Affects Productivity 352
380 Barriers to Job Enrichment 382
378 Individual Differences 379 Application Stages
The Core Dimensions of Jobs
367
High-Involvement Organizations
Total Quality Management 359
354
Parallel Structures
346
Results from Reengineering
Application Stages 341
334 Results of Downsizing 337
Application Stages
328
The Network Structure
The Functional Structure 316 The Divisional Structure 318 The Matrix Structure 319 The Process Structure 322 The Customer-Centric Structure 324
xi Contents
Application Stages 391 Results of Self-Managed Teams 393
What Are the Goals?
452 Application Stages 452 The Results of Coaching and Mentoring 453
What Are the Goals?
442 Reward-System Process Issues 443
438 Gain-Sharing Systems 440 Promotion Systems
Structural and Motivational Features of Reward Systems 434 Skill- and Knowledge-Based Pay Systems 437 Performance-Based Pay Systems
Technical Factors
The Performance Appraisal Process 428 Application Stages 430 Effects of Performance Appraisal 431
Characteristics of Goal Setting 422 Establishing Challenging Goals 423 Clarifying Goal Measurement 423 Application Stages 424 Management by Objectives 424 Effects of Goal Setting and MBO 426
City of Carlsbad, California: Restructuring the Public Works Department (A) 405 C&S Wholesale Grocers: Self-Managed Teams 408
398 Personal-Need Factors 399 Meeting Both Technical and Personal Needs 400
454 Application Stages 455 The Results of Career Planning and Development 463
xii Contents
523 The Competing Values Approach 524 The Deep Assumptions Approach 525
Concept of Organization Culture 520 Organization Culture and Organization Effectiveness 521 Diagnosing Organization Culture 523 The Behavioral Approach
515
Conceptual Framework
Change Is Triggered by Environmental and Internal Disruptions 506 Change Is Aimed at Competitive Advantage 506 Change Is Systemic and Revolutionary 507 Change Demands a New Organizing Paradigm 508 Change Is Driven by Senior Executives and Line Management 508 Change Involves Significant Learning 509
The Results of Development Interventions 469
Employee Benefits at HealthCo 492 Sharpe BMW 497
Applications Stages 481 The Results of Stress Management and Wellness Interventions 486
479
What Are the Goals?
What Are the Goals? 473 Application Stages 475 The Results for Diversity Interventions 478
xiii Contents
Organization Learning Interventions 542 Knowledge Management Interventions 547 Outcomes of OL and KM
Worldwide Strategic Orientations 626 The International Strategic Orientation 627 The Global Strategic Orientation 629 The Multinational Strategic Orientation 631
Cultural Context 616 Economic Development 618 How Cultural Context and Economic Development Affect OD Practice 619
Fourwinds Marina 586 Leading Strategic Change at DaVita: The Integration of the Gambro Acquisition 597
Creating the Network 574 Managing Network Change 577
Application Stages 568 xiv Contents
550
563 Application Stages 564
Mergers and Acquisitions
Design Guidelines 553 Application Stages 554
The Transnational Strategic Orientation 636
680 Values 680 Critical Issues in Family Business
B. R. Richardson Timber Products Corporation 712 Building the Cuyahoga River Valley Organization* 728 Black & Decker International: Globalization of the Architectural Hardware Line 738
697 The Workforce 700 Organizations 701 Implications for OD’s Future 702
The Economy
Traditional 693 Pragmatic 694 Scholarly 695 Implications for OD’s Future 695
681 OD Interventions in Family Business System 684
676 Family Business Developmental Stages 679 A Parallel Planning Process
Trends in Health Care 652 Opportunities for Organization Development Practice 655
The Family Business System
674 Conclusions 675
Comparing Public- and Private-Sector Organizations 669 Recent Research and Innovations in Public-Sector Organizational Development
Technology’s Unique Role in School OD 665 Conclusions 667
660 A New Metaphor for Schools 662 Future Opportunities for OD Practice 664
659 Changing Conditions Cause Stress 659 Disappointing Reform Efforts
Education: Industrial-Age Roots
Success Principles for OD in Health Care 657 Conclusions 658
In preparing this new edition, we were struck by how the cliché of “living in changing times” is becoming almost ironic. The events of each day remind us that things are mov- ing far more quickly and unpredictably than we could ever have imagined. Consider the U.S. economic turmoil brought on by the mortgage- lending crisis and the record price of crude oil, which seemingly rises independent of consumption. Or think about the run- up to the 2008 U.S. presidential election. It strikes us as just a bit surreal to see the word CHANGE plastered on the speaker’s podium and waved by supporters every time Barack Obama comes out to speak. Not to be outdone, Hillary Clinton’s key selling point is her emphasis that she has the ability to lead change. By the time the next edition of this book comes out, a new president will be well into her or his first term and we will no doubt have experienced a lot of change.
Nor is change confined to the United States. As we write this, the new prime min- ister of France is shaking up that country’s work rules, organizations, and policies. Beijing is preparing to host the Olympic Games and show the world a whole new China. Countries in Africa are dealing with drought, AIDS, military dictatorships, and the emergence of democracy. The war in Iraq remains a point of contention among many, and the Middle East remains embroiled in controversy and seemingly intrac- table problems.
Nor is change restricted to governments and organizations. Our personal lives are embedded in change and the dilemmas it poses. Individuals and families are finding that the pace of change exceeds their physical and mental capacity to cope with it. As people experience change accelerating, they tend to feel overwhelmed and alienated. They experience what sociologists call “anomie,” a state of being characterized by the lack of social norms or anchors of stable and shared values. Many Americans, for example, want more time with their families but feel compelled to work longer hours, make more money, and satisfy escalating needs; they espouse diversity but push other cultures to do it “the American way”; they argue that technology will find an answer to the global warming problem and so justify acquiring a Hummer.
Nor is change limited to social systems and their environments. Organization Development—the field of planned change itself—is changing. In a time of unprec- edented change, our views of how and when planned change occurs, who leads and controls it, and what contributes to its success are all changing. Since the last edition of this text, three OD handbooks have been published, a special issue of the Journal of
Applied Behavioral Science has been devoted to “reinvigorate OD” and another special
issue on international OD is on its way, and volumes on change management and organization transformation have continued to flood the bookstores. Conversations among OD practitioners and scholars about where the field is and should be headed have become more vigorous. The drive to understand and do something about change continues unabated.
In times like these, books on OD and change have never been more relevant and xvi Preface
the capacity for change, and to improve the functioning and performance of organiza- tions. OD is more than change management, however, and the field would do well to differentiate itself from the mechanistic, programmatic assumptions that organization change can simply be scripted by various methods of “involving” people and “enroll- ing” them in the change. OD is not concerned about change for change’s sake, a way to implement the latest fad, or a pawn for doing management’s bidding. It is about learning and improving in ways that make individuals, groups, organizations, and ultimately the world better off and more capable of managing change in the future. Moreover, OD is more than a set of values. It is not a front for the promulgation of humanistic and spiritual beliefs nor a set of interventions that boil down to “holding hands and singing Kumbaya.” It is a set of testable ideas and practices about how social and technical systems can coexist to produce individual satisfaction and sustainable organizational results. Finally, OD is more than a set of tools and techniques. It is not a bunch of “interventions” looking to be applied in whatever organization that comes along. It is an integrated theory and practice aimed at increasing the effectiveness of organizations.
In today’s reality, OD is often misunderstood and its relevance questioned. As men- tioned above, OD is often used synonymously with change management; it is often defined and overly constrained by its association with a set of “touchy-feely” values; and it is often described as a hammer looking for a nail. As a result, it is open to discus- sion whether OD is up to the task of facilitating the changes that organizations need to exist and thrive in the world today. This is OD’s challenge in the decade and century ahead. Can it implement change and teach the system to change itself at the same time? Will it cling to its humanistic traditions and focus on functioning or increase its relevance by integrating more performance-related values? How will OD incorporate values related to globalization, cultural integration, the concentration of wealth, and environmental sustainability? Can it afford not to address the issues that threaten an organization’s survival? These are heady questions for a field barely 55 years old.
The original edition of this text, authored by OD pioneer Edgar Huse in 1975, became a market leader because it faced the relevance issue. It took an objective, research perspective and placed OD practice on stronger theoretical footing. Ed showed that, in some cases, OD did produce meaningful results but that additional work was still needed. Sadly, Ed passed away following the publication of the second edition. His wife, Mary Huse, asked Tom Cummings to revise the book for subsequent editions. With the fifth edition, Tom asked Chris Worley to work with him in writing the text.
The most recent editions have had an important influence on the perception of OD. While maintaining the book’s strengths of even treatment and unbiased report- ing, the newer editions made even larger strides in placing OD on a strong theoretical foundation. They broadened the scope and increased the relevance of OD by includ- ing interventions that had a content component, including work design, employee involvement, and organization structure. They took another step toward relevance and suggested that OD had begun to incorporate a strategic perspective. This strategic orientation proposed that OD could be as concerned with performance issues as it was with human potential. Effective OD, from this newer perspective, relied as much on knowledge about organization theory and econo mics as it did on the behavioral sci- ences. It is our greatest hope that the current edition continues this tradition of rigor and relevance.
REVISIONS TO THE NINTH EDITION
xvii Preface Strategic Emphasis
In keeping with the increasingly strategic focus of OD, we have expanded the strategic interventions part of the book from two chapters to three chapters. Chapter 20 now describes transformational change and focuses on the interventions and processes associated with episodic forms of large-scale change. There is a whole new section on organization redesign interventions. Chapter 21 is devoted to describing continuous change in organizations, with a new section on built-to-change organizations. Finally,
Chapter 22 now combines interventions about multiple organizations, including trans- organizational development, mergers and acquisitions, joint ventures, and networks. Human Resources Interventions In addition, the human resources interventions part of the text has been completely reorganized and revised. The original two chapters have been expanded to three chap- ters. While we retained the performance management chapter, there is a new chapter on developing talent (Chapter 18) that includes training, leadership development, career management, and coaching. Chapter 19 has been refocused on managing work- force diversity, wellness, and stress.
Key Chapter Revisions
Other chapters have received important updates and improvements. In Chapter 14— “Restructuring Organizations”—a new section on “customer-centric” organizations was added to reflect important advances in this area. In Chapter 24—“OD in Health Care, School Systems, the Public Sector, and Family-Owned Businesses”—each sec- tion has been completely re-written by new guest authors. Finally, Chapter 25—“Future Directions in Organization Development”—has received a thorough revision based on the authors’ recent research.
DISTINGUISHING PEDAGOGICAL FEATURES
The text is designed to facilitate the learning of OD theory and interventions. We maintained the chapter sequence from the previous edition. Based on feedback from reviewers, this format more closely matches the OD process. Instructors can teach the process and then link OD practice to the interventions.
Organization
The ninth edition is organized into seven parts. Following an introductory chapter that describes the definition and history of OD, Part 1 provides an overview of orga- nization development. It discusses the fundamental theories that underlie planned change (Chapter 2) and describes the people who practice it (Chapter 3). Part 2 is an eight-chapter description of the OD process. It describes how OD practitioners enter and contract with client systems (Chapter 4); diagnose organizations, groups, and jobs (Chapters 5 and 6); collect, analyze, and feedback diagnostic data (Chapters 7 and 8); design interventions (Chapter 9); lead and manage change (Chapter 10); and evaluate and institutionalize change (Chapter 11). In this manner, professors can focus on the OD process without distraction. Parts 3, 4, 5, and 6 then cover the major OD interven- tions used today according to the same classification scheme used in previous editions of the text. Part 3 covers human process interventions; Part 4 describes technostruc- tural approaches; Part 5 presents interventions in human resources management; and xviii Preface
OD (Chapter 25). We believe this ordering provides professors with more flexibility in teaching OD.
Applications
Within each chapter, we describe actual situations in which different OD techniques or interventions were used. These applications provide students with a chance to see how OD is actually practiced in organizations. In the ninth edition, more than 33% of the applications are new and many others have been updated to maintain the text’s currency and relevance. In response to feedback from reviewers, almost all of the applications describe a real situation in a real organization (although sometimes we felt it necessary to use disguised names). In many cases, the organizations are large public companies that should be readily recognizable. We have endeavored to write applications based on our own OD practice or that have appeared in the popular literature. In addition, we have asked several of our students to submit descriptions of their own practice and these applications appear throughout the text. The time and effort to produce these vignettes of OD practice for others is gratefully acknowledged.
Cases
At the end of each major part in the book, we have included cases to permit a more in-depth discussion of the OD process. Seven of the 16 cases are new to the ninth edi- tion. We have kept some cases that have been favorites over the years but have also replaced some of the favorites with newer ones. Also in response to feedback from users of the text, we have endeavored to provide cases that vary in levels of detail, complexity, and sophistication to allow the professor some flexibility in teaching the material to either undergraduate or graduate students.
Internet Resources
Throughout the book, we have tried to provide references to the Internet, particularly to sites related to the organizations discussed. Although these sites are often updated, moved, or altogether abandoned (so we cannot guarantee that the links will be main- tained as cited), these provide students with an opportunity to explore the information available on the Internet.
Audience
This book can be used in a number of different ways and by a variety of people. First, it serves as a primary textbook in organization development for students at both the undergraduate and graduate levels. Second, the book can also serve as an independent study guide for individuals wishing to learn more about how organization develop- ment can improve productivity and human satisfaction. Third, the book is intended to be of value to OD professionals, executives and administrators, specialists in such fields as personnel, training, occupational stress, and human resources management, and anyone interested in the complex process known as organization development.
EDUCATIONAL AIDS AND SUPPLEMENTS Instructor’s Manual with Test Bank (ISBN: 0-324-58057-6)
To assist instructors in the delivery of a course on organization development, an xix Preface
Chapter Objectives and Lecture Notes For each chapter, summary learning objec- tives provide a quick orientation to the chapter’s material. The material in the chapter is then outlined and comments are made concerning important pedagogical points, such as crucial assumptions that should be noted for students, important aspects of practical application, and alternative points of view that might be used to enliven class discussion.
Exam Questions A variety of multiple choice, true/false, and essay questions are suggested for each chapter. Instructors can use these questions directly or to suggest additional questions reflecting the professor’s own style. Case Notes For each case in the text, teaching notes have been developed to assist instructors in preparing for case discussions. The notes provide an outline of the case, suggestions about where to place the case during the course, discussion questions to focus student attention, and an analysis of the case situation. In combination with the professor’s own insights, the notes can help to enliven the case discussion or role plays. Audiovisual Materials Finally, a list is included of films, videos, and other materials that can be used to supplement different parts of the text, along with the addresses and phone numbers of vendors that supply the materials.
Instructor’s Resource CD-ROM (0-324-58058-4)
Key instructor ancillaries (Instructor’s Manual, Test Bank, ExamView, and PowerPoint slides) are provided on CD-ROM, giving instructors the ultimate tool for customizing lectures and presentations.
ExamView
Available on the Instructor’s Resource CD-ROM, ExamView contains all of the ques- tions in the printed Test Bank. This program is an easy-to-use test creation software compatible with Microsoft Windows. Instructors can add or edit questions, instructions, and answers, and select questions (randomly or numerically) by previewing them on the screen. Instructors can also create and administer quizzes online, whether over the Internet, a local area network (LAN), or a wide area network (WAN).
PowerPoint TM Presentation Slides
Available on the Instructor’s Resource CD-ROM and the Web site, the PowerPoint pre- sentation package consists of tables and figures used in the book. These colorful slides can greatly aid the integration of text material during lectures and discussions.
Web Site
A rich W text, providing many extras for the student and instructor.
ACKNOWLEDGMENTS
Our friends and colleagues are always asking about “the text.” “Why did you include that?” “Why didn’t you include this?” “When are you going to revise it again?” “I have some suggestions that might improve this section.” And so on. It is gratifying, after eight (and now nine) editions, that people find the book provocative, refer to it, use it to guide their practice, and assign it as required reading in their courses. Even though xx Preface
our relationship with them. “What have you heard about what’s new in OD?” “How’s your family?” “Do you think we should reorganize the book?” “What’s next in your career?” “Did you see that article in (pick a journal or magazine)?” “What have you been reading lately?”
And then the research, reading, writing, editing, and proofing begins. Writing, debates, and editing occupy most of our time. “Can we say that better, more efficiently, and more clearly?” “Should we create a new section or revise the existing one?” “Do you really think people want to read that?” The permission requests go out and come in quickly . . . at least most of them. Follow up faxes, reminder e-mails, and urgent phone calls are made. The search for new cases and applications is an ongoing activity. “Where can we find good descriptions of change?” “Would you be willing to write up that case?” Deadlines come . . . and go. The copy editing process is banter between two strangers. “No, no, no, I meant to say that.” “Yes, that’s a good idea, I hadn’t thought of that.” Six months into it, our wives start to ask, “When will it be done?” Then, the result of having done this before, they ask, “no, I meant when will it be done, done?” When the final proofs arrive, things start to look finished. We get to see the art work and the cover design, and a new set of problems emerge. “Where did that come from?” “No, this goes there, that goes here.” Doesn’t this sound fun?
So, yes, we continue to hope that our readers, colleagues, and friends ask us about “the text.” We like talking about it, discussing it, and hearing about what we did right or wrong. But please don’t ask us about writing “the text.” We’re very happy to be done (yes, done, done).
Finally, we’d like to thank those who supported us in this effort. We are grateful to our families: Chailin Cummings and the Worley clan, Debbie, Sarah, Hannah, and Samuel. We would also like to thank our students for their comments on the previous edition, for contributing many of the applications, and for helping us to try out new ideas and perspectives. A particular word of thanks goes to Gordon Brooks, Brigette Worthen, and the Pepperdine MSOD faculty (Ann Feyerherm, Miriam Lacey, Terri Egan, and Gary Mangiofico). Our colleagues at USC’s Center for Effective Organizations—Ed Lawler, Sue Mohrman, John Boudreau, Alec Levenson, Jim O’Toole, Jay Conger, and Jay Galbraith—have been consistent sources of support and intellectual inquiry. As well, the following individuals reviewed the text and influenced our thinking with their hon- est and constructive feedback:
Ben Dattner, New York University Diana Wong, Eastern Michigan University Merwyn L. Strate, Purdue University Bruce Brewer, University of West Georgia Susan A. Lynham, Texas A&M University
We would also like to express our appreciation to members of the staff at Cengage Learning, South-Western, for their aid and encouragement. Special thanks go to Joe Sabatino, Denise Simon, and Jean Buttrom for their help and guidance throughout the development of this revision. Menaka Gupta patiently made sure that the editing and producing of our book went smoothly.
Thomas G. Cummings Christopher G. Worley Palos Verdes Estates, California San Juan Capistrano, California March, 2008
This is a book about organization development This book reviews the broad background of (OD)—a process that applies a broad range of OD and examines assumptions, strategies and behavioral science knowledge and practices to models, intervention techniques, and other help organizations build their capacity to change aspects of OD. This chapter provides an intro- and to achieve greater effectiveness, includ- duction to OD, describing first the concept ing increased financial performance, customer of OD itself. Second, it explains why OD has satisfaction, and organization member engage- expanded rapidly in the past 50 years, both ment. Organization development differs from in terms of people’s need to work with and other planned change efforts, such as project through others in organizations and in terms management or innovation, because the focus of organizations’ need to adapt in a complex is on building the organization’s ability to assess and changing world. Third, it reviews briefly its current functioning and to achieve its goals. the history of OD, and fourth, it describes the Moreover, OD is oriented to improving the total evolution of OD into its current state. This intro- system—the organization and its parts in the con- duction to OD is followed by an overview of the text of the larger environment that affects them. rest of the book.
Organization development is both a professional field of social action and an area of scientific inquiry. The practice of OD covers a wide spectrum of activities, with seem- ingly endless variations upon them. Team building with top corporate management, structural change in a municipality, and job enrichment in a manufacturing firm are all examples of OD. Similarly, the study of OD addresses a broad range of topics, including the effects of change, the methods of organizational change, and the factors influenc- ing OD success.
A number of definitions of OD exist and are presented in Table 1.1. Each definition has a slightly different emphasis. For example, Burke’s description focuses attention on culture as the target of change; French’s definition is concerned with OD’s long- term interest and the use of consultants; and Beckhard’s and Beer’s definitions address the process of OD. More recently, Burke and Bradford’s definition broadens the range and interests of OD. 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
2
CHAPTER 1 General Introduction to Organization Development
- [Table 1.1] [Table 1.1]
improvement, and reinforcement of the strategies, structures, and processes that lead to organiza-
tion effectiveness. This definition emphasizes several features that differentiate OD fromother approaches to organizational change and improvement, such as management consulting, innovation, project management, and operations management. The defi- nition also helps to distinguish OD from two related subjects, change management and organization change, that also are addressed in this book.
First, OD applies to changes in the strategy, structure, and/or processes of an entire system, such as an organization, a single plant of a multiplant firm, a department or work group, or individual role or job. A change program aimed at modifying an organization’s strategy, for example, might focus on how the organization relates to a wider environment and on how those relationships can be improved. It might include changes both in the grouping of people to perform tasks (structure) and in methods of communicating and solving problems (process) to support the changes in strategy. Similarly, an OD program directed at helping a top management team become more effective might focus on interactions and problem-solving processes within the group. This focus might result in the improved ability of top management to solve company problems in strategy and structure. This contrasts with approaches focusing on one or only a few aspects of a system, such as technological innovation or operations manage- ment. In these approaches, attention is narrowed to improvement of particular prod- ucts or processes, or to development of production or service delivery functions.
Definitions of Organization Development
Organization development is a planned process of change in an organization’s culture through the utilization of behavioral science technology, research, and theory. (Warner Burke) Organization development refers to a 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, as they are sometimes called. (Wendell French) Organization development is an effort (1) planned, (2) organization-wide, and
(3) managed from the top, to (4) increase organization effectiveness and health through (5) planned interventions in the organization’s “processes,” using Organization development is a systemwide process of data collection, diagnosis, action planning, intervention, and evaluation aimed at (1) enhancing congruence among organizational structure, process, strategy, people, and culture; (2) developing new and creative organizational solutions; and (3) developing the organization’s self- renewing capacity. It occurs through the collaboration of organizational members working with a change agent using behavioral science theory, research, and technology. (Michael Beer) Based on (1) a set of values, largely humanistic; (2) application of the behavioral sciences; and (3) open systems theory, organization development is a system- wide process of planned change aimed toward improving overall organization effectiveness by way of enhanced congruence of such key organization dimensions as external environment, mission, strategy, leadership, culture, structure, information and reward systems, and work policies and procedures. (Warner Burke and David Bradford)
3
CHAPTER 1 General Introduction to Organization Development
relations. These subjects distinguish OD from such applications as management consult- ing, technological innovation, or operations management that emphasize the economic, financial, and technical aspects of organizations. These approaches tend to neglect the personal and social characteristics of a system. Moreover, OD is distinguished by its intent to transfer behavioral science knowledge and skill so that the system is more capable of carrying out planned change in the future.
Third, OD is concerned with managing planned change, but not in the formal sense typically associated with management consulting or project management, which tends to comprise programmatic and expert-driven approaches to change. Rather, OD is more an adaptive process for planning and implementing change than a blueprint for how things should be done. It involves planning to diagnose and solve organizational problems, but such plans are flexible and often revised as new information is gathered as the change program progresses. If, for example, there was concern about the perfor- mance of a set of international subsidiaries, a reorganization process might begin with plans to assess the current relationships between the international divisions and the corporate headquarters and to redesign them if necessary. These plans would be modi- fied if the assessment discovered that most of the senior management teams were not given adequate cross-cultural training prior to their international assignments.
Fourth, OD involves the design, implementation, and the subsequent reinforce- ment of change. It moves beyond the initial efforts to implement a change program to a longer-term concern for appropriately institutionalizing new activities within the organization. For example, implementing self-managed work teams might focus on ways in which supervisors could give workers more control over work methods. After workers had more control, attention would shift to ensuring that supervisors contin- ued to provide that freedom. That assurance might include rewarding supervisors for managing in a participative style. This attention to reinforcement is similar to training and development approaches that address maintenance of new skills or behaviors, but it differs from other change perspectives that do not address how a change can be institutionalized.
Finally, OD is oriented to improving organizational effectiveness. Effectiveness is best measured along three dimensions. First, OD affirms that an effective organization is adaptable; it is able to solve its own problems and focus attention and resources on achieving key goals. OD helps organization members gain the skills and knowledge necessary to conduct these activities by involving them in the change process. Second, an effective organization has high financial and technical performance, including sales growth, acceptable profits, quality products and services, and high productiv- ity. OD helps organizations achieve these ends by leveraging social science practices to lower costs, improve products and services, and increase productivity. Finally, an effective organization has satisfied and loyal customers or other external stakeholders and an engaged, satisfied, and learning workforce. The organization’s performance responds to the needs of external groups, such as stockholders, customers, suppli- ers, and government agencies, which provide the organization with resources and legitimacy. Moreover, it is able to attract and motivate effective employees, who then perform at higher levels. Other forms of organizational change clearly differ from OD in their focus. Management consulting, for example, primarily addresses financial performance, whereas operations management or industrial engineering focuses on productivity.
Organization development can be distinguished from change management and organizational change. OD and change management both address the effective imple- mentation of planned change. They are both concerned with the sequence of activities,
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CHAPTER 1 General Introduction to Organization Development
performance and competitive advantage. Change management focuses more narrowly 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 man- agement may not involve OD.
Similarly, organizational change is a broader concept than OD. As discussed above, organization development can be applied to managing organizational change. However, it 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, includ- ing 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.
The behavioral sciences have developed useful concepts and methods for helping organizations to deal with changing environments, competitor initiatives, technologi- cal innovation, globalization, or restructuring. They help managers and administrators to manage the change process. Many of these concepts and techniques are described in this book, particularly in relation to managing change.