1.
Technostructural
Interventions
Chapter 14: Restructuring Organizations
Chapter 15: Employee Involvement
Chapter 16: Work design
Nurul Amal Shaik Mohd Rodhi (G1126196)
Fairuz Rusdi (G1122444)
PSYC 6220-Organizational Change & Development

2.
Technostructural Interventions
Change programs
focusing on the
technology and structure
of organizations
(Cummings & Worley, 2009)

3.
Restructuring organizations
Organization structure describes how
overall work of the organization is
divided into subunits and how these
subunits are coordinated for task
completion.
Designed to fit at least 4 factors :
environment, organization size, technology &
organization strategy

4.
Common Organizational
Structure
1)
Functional structure

5.
Advantages
Promotes skill
specialization
Facilitate
communication
Reduce duplication of
work
Disadvantages
Reduces communication
& cooperation
between departments

6.

2) Unit Structure / Divisional Structure

7.
Advantages
Provide employees with
opportunities for learning new
skills & expanding knowledge
Recognize key
interdependencies &
coordinate resources toward
an overall outcome
Disadvantages
May not have enough
specialized work to use
people‟s skill and abilities
fully
Specialist may feel
isolated from their
professionals colleagues
& may fail to advance
their career specialty

8.
3) Matrix Structure

9.
Advantages
Allows multiple orientation
Disadvantages
Can cause role conflict for the
individual who can be caught
between the demands of two
managers
Maintains consistency
between different
departments & projects
Very difficult to introduce
Provide mechanisms to deal
with multiple sources of power
in the org
Heavy managerial costs &
support

10.
4) Process Structure
Senior Management Team
Chair and Key Support Process Owners
Developing New Products Process
Process Owner
Cross-Functional Team Members
Acquiring and Filling Customer Orders Process
Process Owner
Cross-Functional Team Members
Supporting Customer Usage Processes
Process Owner
Cross-Functional Team Members

11.
Advantages
The work flow & each
department‟s connections
to the customer are much
clearer to all
organizational members
Disadvantages
Less useful in organizations
that have automated or
outsourced many
processes & thus do not
have job assigned to them
as the structure intends

12.
5) Network Structure
Producer
organization
Designer
organization
Broker
organization
Supplier
organization
Distributor
organization

13.
Advantages
Cost effective &
flexible
Focus the
organization on
its central
purpose
Disadvantages
Can cause
problems when
the organization
must rely on the
performance of
an external
company over
which it may
have little
control

14.
Downsizing
Refers to interventions aimed at
reducing the size of the
organization, accomplished by
decreasing the number of employees
through
layoffs, attrition, redeployment or
early retirement or by reducing
number of organizational units or
managerial levels through
divestiture, outscoring, reorganization
or delayering
(Cummings & Worley, 2009)

15.
Application Stages
Clarify the organization’s strategy
Assess downsizing options &
make relevant choices
Implement the changes
Address the needs of survivors and
those who leave
Follow through with growth
plans

16.
Downsizing tactics
(Cameron et al.,1993)
Tactic
Workforce
reduction
Organization
redesign
Systemic
Characteristics
Examples
• Reduces headcount
• Short-term focus
• Fosters transition
• Attrition
•Retirement/buyout
• Lay-offs
• Changes organization
• Medium-term focus
• Fosters transition and
transformation
• Eliminate functions,
layers,
products
• Merge units
• Redesign tasks
• Changes culture
• Long-term focus
• Fosters transformation
• Change responsibilities
• Foster continuous
improvement
• Downsizing is normal

17.
Reengineering
The fundamental
rethinking & radical
redesign of business
processes to achieve
dramatic improvements in
performance
(Cummings & Worley, 2009)

18.
Characteristics of
Reengineering in Organisations
• 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
• The focus of performance measures and
compensation shifts from activities to results
• Organisation structures change from hierarchical
to flat
• Managers change from supervisors to coaches;
executives change from scorekeepers to leaders

19.
Re-engineering Process
•
• Prepare the organisation
• Specify the organisation’s strategy and
objectives
• Fundamentally rethink the way work
gets done
– Identify and analyse core business
processes
– Define performance objectives
– Design new processes
• Restructure the organisation around the
new business processes

20.
Employee Involvement
Seeks to increase members’
input decisions that affect
organization performance
and employee well-being
(Cummings & Worley, 2009)
Lead to quicker, more responsive decisions, continuous
performance improvements & greater employee
flexibility, commitment and satisfaction.

21.
4 key elements
(Cummings & Worley, 2009)
Power
Rewards
EI
Knowledge & skills
Information
:

22.
EI Applications: Parallel
Structures
(Cummings & Worley, 2009)
Provide members with an alternative setting in which
to address problems & to propose innovative
solutions free from the existing, formal organization
structure & culture
2 most common parallel structure:
1)
Cooperative union-management projects
2)
Quality circles

23.
EI Applications: Parallel Structures
1
Define the purpose & scope
2
Form steering committee
3
Communicate with organization
members
4
Create forums for employee
problem solving
5, 6
5)Address the problems & issues
6)Implement & evaluate the changes

24.
EI Applications: Total Quality
Management (TQM)
Quality is achieved when organizational
processes reliably produce products and
services that meet or exceed customer
expectations
(Cummings & Worley, 2009)
Emphasize the concept of quality

25.
Total Quality Management (TQM)
Is a combination of a number of organization
improvement techniques and approaches including
the use of quality circles, statistical quality control,
statistical process control, self-managed teams and
task forces & extensive use of employee
participation.
(French & Bell, 1999)

26.
EI Application: Total Quality
Management (TQM)
Gain long-term senior
management commitment
Train members in quality
methods
Start quality improvement projects
Measure progress
Rewarding accomplishment

27.
EI Application: High-Involvement
organizations (HIOs)
Create organizational conditions that support
high levels of employee participation
Address almost all organizational features (org.
structure, job design, information system, career
system, selection, training, reward
system, personnel policies, physical layout)
(Cummings & Worley, 2009)

28.
Work Design
Focuses on
motivational
theories &
attempts to
enrich the
work
experience
Sociotechnical systems approach
Focuses on
efficiency &
simplification
Motivational approach
Engineering approach
Work design – creating jobs & work groups that
generate high levels of employee fulfillment and
productivity
Focuses to
optimize both
the social &
the technical
aspects of
work systems

29.
The Complete Job Characteristic Model

30.
Hackman & Oldham have provided an
OD approach to work redesign based
on a theoretical model of what job
characteristics lead to the psychological
states that produce “high internal work
motivation”
(French & Bell, 1999)

31.
STRATEGIC
CHANGE
INTERVENTIONS
PSYC 6220-Organizational Change & Development

32.
Understanding the
Introduction
UNDERSTANDING
Balanced Scorecard
STRATEGIC INTERVENTIONS
“Without a strategy, an organisation is like a ship without a
rudder, going round in circles. It’s like a tramp; it has no places
to go.” (Ross and Kami)

33.
What is Strategic Interventions ?
Cummings and Worley (2009) describes Strategic
Interventions as:
“ Interventions that involve managing the
organisation‟s relationship to its external
environment and the internal structure and
process necessary to support a business
strategy”

34.
What is Strategic Interventions ?
Strategic interventions contribute to align
the organization with its environment and
that which links the internal functioning of
the organization to the larger
environment; transforming the
organization to keep pace with changing
conditions.
– Cummings and Worley (2009)

35.
What is Strategic Interventions ?
Strategic intervention help organizations to
gain a better understanding of their
current state, and their environment, that
allow them to better target strategies for
competing or collaborating with other
organizations
– Cummings and Worley (2009)

36.
Transformational Change
1
2
3
Integrated Strategic Change
Organisation Design
Culture Change
Continuous Change
Self-designing Organisatons
Learning Organisation
Built-to-change Organisation
Transorganisational Change
Mergers & Acquisitions
Alliance Intervention
Network Intervention

37.
Understanding the
Part 1
Transformational Change
Balanced Scorecard
“Without a strategy, an organisation is like a ship without a
rudder, going round in circles. It’s like a tramp; it has no places
to go.” (Ross and Kami)

38.
What is Transformational Change?
Organisation transformation implies radical changes from its
members behavior, internal functions, corporate structures, company
values and norms, and the organisational arrangement.
-Cummings and Worley (2009)
Organisational transformation involves creation of a new
organizational vision
(Porras and Silvers as cited in Smither, Houston, &
McIntire, 1996)
A change in which the organisation moves to a radically
different, and sometimes unknown, future state.
(Nelson & Quick, 2011)

39.
Triggered by
Environmental and
Internal Disruption
•Must experience a severe threat to
survival
• Some choose to change even though
not subjected to external pressures
due to seeing business opportunities
•(Dunphy, Griffiths & Benn, 2007).
Change Demands a
New Organizing
Paradigm
Involving gamma types of
change (Bartunek & Louis, as
cited in Cummings and
Worley, 2009) - discontinuous
shifts in mental or
organisational frameworks.
6
Characteristics
of
transformational
change
Change Is Aimed at
Competitive Advantage
• Uniqueness – unique bundle of
resources which represent
completive advantage
• Value – higher-than-average price
or exceptionally low in cost
• Imitation difficulty
Involves Significant Change Is
Learning
Systematic and
• Transformational change Revolutionary
requires learning and
innovation. Members must
learn to enact new
behaviors to implement
new strategic directions
Involves reshaping
organisation‟s design
elements and its entire
nature
Triggered by Senior Executives and
Line Management
play key role in actively leading transformation in
deciding the when, how, who and what

40.
Understanding the
Balanced Scorecard
Integrated Strategic Change

41.
Points on Integrated Strategic
Change
1
Comprehensive OD intervention aimed at
a single organisation or business unit.
2
Business strategy and organisation design
must be aligned, changed together to
respond to external and internal
disruption
3
Helps members manage transition
between current strategic orientation and
the desired future orientation

42.
Integrated Strategic Change Key Features
(Cummings & Worley, 2009)
ISC extends traditional OD process into a highly participative process.
It has 3 key features
Worley, Hitchin, and Ross (as cited in Cummings & Worley, 2009)
1. Unit of analysis: I) Strategy and II) Organisation design =
Organisation’s Strategic Orientation
Strategy and design that supports it must be considered as integrated whole.
2. Creating the strategic plan, gaining commitment and support,
planning implementation and execution is one integrated process
The ability to repeat such a process effectively is rare and difficult.
3. Individuals and groups throughout the organisation are integrated
into the analysis, planning and implementation
This is to create a more achievable plan, maintain strategic focus, direct attention, etc.

43.
Stages of ISC
Plan
Implementation
Strategic Change
Plan
Strategic Choice
Strategic Analysis

44.
ISC Stages
STRATEGY
IMPLEMENTATION
STRATEGIC PLANNING
Strategic
Analysis
• Readiness for
change
• Senior
management’s
willingness to carry
out change
• Understanding
current
organisation
design
• Explain current
performance levels
Exercising
Strategic
Choice
• Once existing
orientation
understood, new
one must be
designed
• “what” of strategic
change, define
products/service
• Markets to be
served, way
outputs will be
produced
Designing the
Strategic
Change Plan
• “How”
• Change plan:
• Types, magnitude,
schedule of
change activities
• Associated costs
• Organisation
Culture
• Power and political
issues
Implementing
the Plan
• Alignment issues
• Teamwork
• Organisational/per
sonal learning
• senior managersinitiate actions,
allocate resources,
set goals, give
feedback

45.
Why is Integrated Strategic
Change Valuable ?
Aligns thinking
Facilitating future
state and needed
changes
Shows distance to
finish line
Strategy helps
the
organisation by
Rationalizes & justifies
Guides actions
a focus on culture
Informs key
relationships

46.
Understanding the
Balanced Scorecard
Organisation Design

47.
Organisation Design
Organisation design is “the process of constructing and adjusting an
organisation‟s structure to achieve its business strategy and goals” (p.
518). Nelson and Quick (2011)
Configures the organisation „s structure, work designs, human resources
practices, management and information systems to guide members
behaviors in strategic direction. Cummings and Worley (2009)
Key notion : “fit”, “congruence” or “alignment” among
elements
The idea that the organisation is designed to support particular
strategy (strategic fit) . Different design elements must be aligned with
each other
Better fits, More effective Lawrence and Larsch (1986)

48.
Organisation Design Model
Organization Strategy
Strategic Fit
Organisation Design
Management and
Information Systems
Structure
Design Fit
Human Resource
Practices
Work Design

49.
Organisation Design Types (Burns & Stalker, 2009; Cummings
& Worley, 2009)
Mechanistic Design
Strategy
Structure
• Cost minimization
Organic Design
• Innovation – competing on new
products
• Formal/hierarchical
• Works best in stable
environment
• Flat, lean, and flexible
•Works best in dynamic and
uncertain environment
Work Design
• Traditional jobs
• Traditional work group
• Enriched jobs
• Self-managed jobs
Human Resource
Practices
• Selection to fit job
• Training only when needs arise
• Job-based pay
• Selection to fit organisation
• Training is continuous
• Skill-based pay
Management and
Information System
• Command and control
• Centralized decision-making
• Closed, exclusive
• Employee involvement
• Decentralized decision-making
• Open, inclusive

50.
Organisation Design Stages
Organisation design follows three broad steps (Galbraith et al., as cited in Cummings and
Worley, 2009):
STRATEGIC PLANNING
Clarifying the
design focus
• Organisation
assessment for
framework
• Gap analysis –
problems to address
Designing the
organisation
STRATEGY
IMPLEMENTATION
Implementing
the design
• Configure design
• Putting into place
• “How”
Designing (practices,
• Upper leadership for
the Strategic structures, systems)
Change Plan Members must be
overall direction
•
• Results in design,
motivated to
component design,
implement
and how to
• Stakeholders must
implement
support

51.
Understanding the
Balanced Scorecard
Culture Change

52.
What is Corporate Culture ?
The shared beliefs and values that organisations pass on to
newcomers, such as accepted ways of behaving, roles and norms
Smither, Houston and McIntire (1996)
The pattern of assumptions, values, and norms that are more or less
shaped by organisation members
(Cummings & Worley, 2009)
A pattern of basic assumptions considered valid and taught to new
members as the way to perceive, think , and feel in the organisation
(Nelson & Quick, 2011)
Schein suggests that organisation culture has three levels : (1) visible
artifacts, (2) testable values (3) invisible basic assumptions
(as cited in Nelson & Quick, 2011)

53.
Elements of Corporate Culture
(Cummings & Worley, 2009)
Basic
Assumptions
Values
Norms
Artifacts

54.
Organisation Culture and Organisation
Effectiveness
Most theorists regard strong cultures as desirable, since
having employees holding similar views about the
company and its environment can make organisations
more effective (Smither, Houston, & McIntire, 1996).
Culture affects performance indirectly through its influence
on the organisations‟s ability to implement change.
However, certain accounts where change failed due to the
culture not supporting the new strategy.
(Cummings and Worley, 2009)

55.
Guidelines for Cultural Change
(Cummings and Worley 2009; Senior, 2002)
1
Formulate Clear Strategic Vision
3
Display Top Management
Commitment
Model Culture Change at Highest
Levels
4
Modify Organisation to Support
Organisational Change
2
5 Select and Socialize Newcomers

56.
Evaluating Culture Change
Large scale cultural change may be necessary in certain situations such
as if the firm‟s culture does not fit a changing environment or if the
industry is extremely competitive (Cummings and Worley, 2009).
Changing corporate culture is not always easy but at times risky due
to organisational culture, is much less visible and with many layers,
dimensions and types therefore more difficult to change (Senior, 2002).
Failure of culture change efforts due to change introduced to
employees requires them to function in new and different ways which
contradict with powerful norms and values of organisation.
(Smither, Houston, & McIntire, 1996)

57.
Understanding the
Part 2
Continuous Change
Balanced Scorecard
“Without a strategy, an organisation is like a ship without a
rudder, going round in circles. It’s like a tramp; it has no places
to go.” (Ross and Kami)

58.
What is Continuous Change?
Continuous change interventions extends transformational change
into a nonstop process of strategy setting, organisation designing,
and implementing the change
(Lawrence, Dyck, Maitlis, & Mauws, as cited in Cummings and Worley, 2009)
Focus is on learning, changing, and adapting and on how to
produce constant flow of new strategies and designs and not
only transforming existing ones
(Cummings and Worley, 2009)
Continuous learning at individual level : changing behavior of
one‟s skills, knowledge, and worldview
At organisational level: deepening and broadening of
organisational capabilities
(Sessa & London, 2006)

59.
Understanding the
Balanced Scorecard
Self-Designing Organisations

60.
Self-Designing Organisations
Developed by Mohrman and Cummings in response to demands of
organisations in adapting to turbulent environments (adaptive
change).
This approach helps members translate corporate values and
general prescriptions for change into specific structures, processes
and behaviors suited for change
(Cummings and Worley, 2009).
This intervention includes considerable innovation and learning as
organisations gain the capacity to design and implement
significant changes continually (Cummings and Worley, 2009).

61.
Application Stages
The self-design approach is described in three stages (Cummings and Worley, 2009):
STRATEGIC PLANNING
Laying the
foundation
• Acquiring
knowledge about
how the
organisations
function
• Valuing corporate
values that guide
change process
• Diagnosing to
determine what
needs to be
changed
Designing
STRATEGY
IMPLEMENTATION
Implementing
and assessing
• What needs to be
• Involves ongoing
refined and modified
Designing cycle of action
for the change Strategic learning: changing
the
Change Plan structures and
behaviors,
assessing progress
and making
necessary
modifications

62.
The Self Design Strategy enables organisations to
adapt to demands of change from five important
perspectives: (Cummings and Worley, 2009)
Attends to interest of
multiple stakeholders
Constant
organisational
learning
Adaptive
Change
Demands
Occurring at
multiple levels of
the organisation
Systematic
change
process
Dynamic change
process

63.
Understanding the
Balanced Scorecard
Learning Organisations

64.
Learning Organisations
Senge (1990) defines the learning organization as “…organizations where
people continually expand their capacity to create the results they truly
desire, where new and expansive patterns of thinking are nurtured, where
collective aspiration is set free, and where people are continually learning to
see the whole together” (p. 14).
This intervention is aims at helping organisations develop and use
knowledge to change and improve themselves constantly
(Cummings and Worley, 2009).
At the organisational level, learning is demonstrated through
changes in vision, strategy, policies, structure, products or services
(Sessa & London, 2006)
Includes two interrelated change process: (1) Organisation
Learning (OL) and (2) Knowledge Management (KM).

65.
OL Processes
Organisations may apply learning process to three types of
learning:
1
Single-loop learning
2
Double-loop learning
3
Deutero-learning
Improving the status quo
Changing the status quo
Learning how to learn

66.
3 Types of Learning
Single –loop
Learning
• Where an objective or goals is defined
and an individual works out the most
favored way of reaching the goal however
which the goal itself is not questioned
(Argyris, as cited in Senior, 2002).
Double-loop
Learning
• Where error is detected and corrected in ways
determining why the error occurred in the first
place (Sessa & London, 2006).
Deuterolearning
• Where members of an organisation learn
how to carry both single and double loop
learning(Sessa & London, 2006).

67.
How OL Affects Organisation
Performance
Organisational
Learning
Organisation
Characteristics
• Structure
• Information
system
•Human Resources
practice
• Culture
• leadership
Knowledge
Management
Organisation
Learning
Processes:
• Discovery
• Invention
• Production
• Generalization
Competitive
Strategy
Organisation
Knowledge:
• explicit
• tacit
Organisation
Performance

68.
What are Knowledge Management
Interventions ?
KM interventions focuses on tools and
techniques that enable organisations to
collect, organize and translate
information into useful knowledge
(Cummings and Worley, 2009)
Includes formal debriefing sessions, organized learning
programs, attended and supported by senior
managers and executives. Recognition and reward
systems are key ingredients of effective KM process
(Oden, 1999)

69.
Application Stages for KM
Generating
Knowledge
• Identifying the kinds of knowledge
that creates most value
Organizing
Knowledge
• Organizing the valued knowledge into
a form that members can use readily
Distributing
Knowledge
• Creates mechanisms for members to
gain access to needed knowledge

70.
Understanding the
Balanced Scorecard
Built-To-Change Organisations

71.
Built-To-Change (B2C)
Organisations
B2C organisations are
designed for change, not
stability. They are based on
design guidelines that
promote change capability
in the management, reward
systems, structure
information, decision
processes, and leadership
(Cummings and Worley, 2009)
“In a rapidly
changing
environment, this
change capability
can be a source of
sustained
competitive
advantage”
(Cummings and Worley,
2009).

72.
Design Guidelines for
B2C
Managing Talent
Reward System
Selection practices
Enhance employee
motivation level
• Seek quick
learners wanting
to take
initiative, desire
professional
growth and thrives
change
• Key role :
motivating and
reinforcing change
Structure
&
Leadership
Internal Structure
and Leadership
importance
• Flat, lean,
flexible
organisation
structures
• Shared & spread
leadership
Information and
Decision Process
Dynamic flow of
information &
transparency
• Moved
throughout the
organisation,
information is
transparent and
current

73.
B2C Stages
Lawler and Worley (2006)
The following 5 initiatives can help the transition to a B2C organisation :
Create a
ChangeFriendly
Identity
• Addresses
organisation
identity –
core
values, norm
s, beliefs
Build an
Orchestrat
ion
Capability
Pursue
Proximity
• Intervention
looks outward to
gain insight of
environmental
demands
• Seniors
executives commit
time to think about
future paths –
scenario-planning
i.
ii.
iii.
Establish
Strategic
Adjustment as
a Normal
Condition
Skills for
change
developed
among
employees
Organisation
effectiveness
function
created
Members learn
how to apply
change
• Employee
empowerment
practices
Seek
virtuous
spirals
• Periods in
the life of an
organization
• Involves
bringing all
prior
processes
together

74.
The Built to Change Logic
Lawler and Worley (2006)
Organization Design Is the Issue
Change is
Inevitable
and
Normal
Traditional Design
Is a Problem
Human Nature is
Not
The Problem
Competitive Advantage
is Change

75.
Understanding the
Part 3
Transorganizational
Balanced Scorecard
Change
“Without a strategy, an organisation is like a ship without a
rudder, going round in circles. It’s like a tramp; it has no places
to go.” (Ross and Kami)

76.
Transorganizational
Change
Cummings and Worley
(2009) states that
transorganzational change
involves interventions that
move beyond the single
organization to include
merging, allying or
networking with other
organisations.
Transorganizational
strategies allows
organisation to
perform tasks that
are too costly and
complicated for
single organisations
to perform.
(Cummings and Worley,
2009)

77.
Mergers and Acquisition
Mergers and acquisition (M&As) involve the
combination of two organisations
(Cummings and Worley, 2009)
“Merger”
• Integration of two previously independent
organisations into a new organisation
“Acquisition”
• Involves the purchase or “buyout” of one
organisation by another for integration into
the acquiring organisation

78.
Why M&As are Done?
(Cummings and Worley, 2009; Galpin & Herndon, 2009)
1
2
Improve innovation
To gain access to global
markets, technology, etc
3
4
5
To achieve operational
efficiencies
To grow revenue
Resource sharing

79.
Why Do M&As Fail ?
The high failure rate of M&As are the results of serious limitations
in how companies approach it
(Saint-onge & Chatzkel, 2009).
A set of factors has been found to be to be consistently associated with poor M&A
efforts according to Galpin and Herndon (2007):
Cultural
Incompatibility
Lack of
Communication,
Leadership and
Decision-making
People-Related
Issues
Differences in
Management
Styles

80.
M&As Application Stages
(Cummings and Worley, 2009)
1. Pre-combination Phase
Search/Select
Candidate
Create an
M&A Team
Establish
Business
Case
Perform a
Due Diligence
Assessment
Develop
Merger
Integration
Plans
2. Legal combination
Complete financial
negotiations
Close the deal
Announce the
combination
3. Operational combination
Day 1 activities
Organisational &
technical integration
activities
Cultural integration
activities

81.
Recommendations for M&A Success
For M&A efforts to succeed, Galpin and Herndon (2007) have suggested the
following:
Select dedicated,
capable people for
the team
Provide continuous
communication and
feedback
Conduct duediligence
analyses
Strategy for M&A
Success
Determine the
required or desired
degree of
integration
Speed up decisions
Gain support of
senior managers
Select a highly
capable leader
Clearly define
integration
approach

82.
Understanding the
Balanced Scorecard
Strategic Alliance Interventions

83.
Strategic Alliance
Defined
Long-term agreements
between firms that go
beyond normal market
transactions but fall short of
merger. Forms include joint
ventures, licenses, long-term
supply agreements, and
other kinds of inter-firm
relationships
(Porter, 1990).
Roll (2009) describes it
as an approach in which
two or more companies
agree to pool their
resources together to
form a combined force
in the marketplace
different from
mergers, in which does
not involve the
emergence of a new
combined entity.
Child, Faulkner, and Tallman defines strategic alliance as a “formal agreement between
two or more organisations to pursue a set of private and common goals through the sharing
of resources”
(as cited in Cummings and Worley, 2009, p. 568).

84.
Alliance Application Stages
(Cummings and Worley, 2009)
Involves four major stages:
Alliance Strategy
Formulation
• Clarify business
strategy
• Understand why
alliance is
appropriate
Partner
Selection
• Search for
appropriate partner
• Compatible
management styles,
cultures, etc.
Alliance
Structuring
and Start-up
• Structuring
partnership
• Relational quality –
Trust Issues
Alliance
Operation
and
Adjustment
• Diagnosing
strategic alliance
state
• Making
appropriate
adjustments.

85.
The Need for Strategic Alliances
Hamel, Doz and Prahalad (2002)
states the need for collaboration due to the following reasons:
The need to absorb skills of the partner
To reduce costs and avoid investments
To penetrate new markets
To provide short-cuts for some companies

86.
Benefits of the Strategic Alliances
(Soares as cited in IsoraIte, 2009)
1
Ease of market entry
2
Shared risks
3
Shared knowledge and
expertise
4
Synergy & Competitive
Advantage

87.
Understanding the
Balanced Scorecard
Network Interventions

88.
Network interventions help organisations
join together for a common purpose
(Cummings and Worley, 2009).
Two types of change are involved in managing the
development of multiorganisation networks:
Creating the initial network
Managing change within that network

89.
Creating the Network
(Cummings and Worley, 2009)
Involves four major stages:
1. Identification
• Identifying
members
(existing/potential).
2. Convention
• Face-to-face
meeting
• Costs and benefits
• Task perceptions
3. Organization
• Task performance
organization
4. Evaluation
• Assessing how network
is performing
• Feedback

90.
Managing Network Change
Create
Instability in the
Network
• In order for change to occur within a network, relationships
among member organisations' must become unstable
• OD practitioners can facilitate instability by changing
patterns of communication among members.
Manage the
Tipping Point
• Gladwell (as cited in Cummings and Worley, 2009)
suggested the following in facilitating network change:
• The Law of the Few (Connectors, Mavens, Salesperson)
• Stickiness – the memorable impact of ideas or practices
• The Power of Context – relevance and meaningfulness of
a message to network members
Rely on SelfOrganisation
• Networks tend to exhibit “self-organising” behavior
• OD practitioners can rely on this feature to refreeze change
– once change has occurred in the network, variety of
controls can be leveraged to institutionalized it

91.
Actualizing The Network Within
Organization can realize its network and collaborative potential by pursuing
the following path: (Camson, 2010)
1
Be clear about and publicize
common goals and objectives that
can drive network collaboration.
Support high quality
conversations and exchanges and
2
high quality actions to build competencies
and relationships
3
Build competencies and utilize
technology that will support
knowledge flow, relationships,
high quality conversations
4
Identify practices, attitudes and
business models that impede knowledge
flow, relationships, high quality
conversations and exchanges.

92.
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