Organizational Behaviour

1. Organization Change /
Organization Development

2. Structure should follow strategy
• Growth
– Concentration
– Diversification
• Stability
– No change
• Retrenchment
– Turnaround
– Divestment
– Liquidation

3. Definition of OD
Organization Development (OD) is a
planned process of change in an
organization’s culture through the
utilization of behavioral science
technology, research, and theory.

4. Definition of OD
OD 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.

5. Definition of OD
OD 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 behavioral science
knowledge.

6. Organization Development is...
a systemwide application and transfer of
behavioral science knowledge to the
planned development, improvement, and
reinforcement of the strategies,
structures, and processes that lead to
organization effectiveness.

7. Action Research Model
Feedback to Client
Data gathering after
action
Problem Identification
Joint action planning
Consultation with a
behavioral scientist
Data gathering &
preliminary diagnosis
Joint diagnosis
Action

8. Initiate the Inquiry
Inquire into Best Practices
Discover Themes
Envision a Preferred Future
Design and Deliver Ways to
Create the Future
Positive Model

9. Comparison of
Planned Change Models
• Similarities
– Change preceded by diagnosis or preparation
– Apply behavioral science knowledge
– Stress involvement of organization members
– Recognize the role of a consultant
• Differences
– General vs. specific activities
– Centrality of consultant role
– Problem-solving vs. social constructionism

10. General Model of Planned Change
Evaluating
and
Institutionalizing
Change
Planning
and
Implementing
Change
Diagnosing
Entering
and
Contracting

11. Processes for Planned
Organization Change
• Process Model
– Planned organization change requires a
systematic process of movement from one
condition to another
• Unfreezing
– Process by which people become aware of the need
for change
• Change
– Movement from the old way of doing things to a new
way
• Refreezing
– Process of making new behaviors relatively
permanent and resistant to further change

12. Process of Organizational Change

13. Processes for Planned
Organization Change
• The Continuous Change Process Model
– Incorporates the forces for change, a problem-
solving process, a change agent, and transition
management
– Takes a top management perspective
• Perceives forces and trends that indicate
need for change
• Determines alternatives for change
• Selects the appropriate alternative

14. Continuous Change Process Model of
Organization Change

15. Processes for Planned
Organization Change
• The Continuous Change Process Model
– Change agent: a person responsible for managing a
change effort
• Assists management with problem recognition/definition
• Can be involved in generating/evaluating potential action
plans
• Can be from inside or outside of the organization
• Implements the change
• Measures, evaluates, controls the desired results
– Transition management
• Process of systematically planning, organizing, and
implementing change

16. OD: Group and Individual
Change
To set team
goals and
priorities
To examine
relationships
among those
doing the
work
To analyze
and allocate
the way work
is performed
To examine
how a group
is working
Team Building Goals

17. Resistance to Change
• The Resistance to Change Paradox
– Organizations invite change when change offers
competitive advantage
– Organizations resist change when change threatens
the organization’s structure and control systems
– Organizations must balance stability (permanence)
with the need to react to external shifts (change)
– Resistance can warn of the need to reexamine the
need for change

18. Resistance to Change:
Sources of Resistance to Change
• Organizational
Sources
– Overdetermination
– Narrow focus of
change
– Group inertia
– Threatened
expertise
– Threatened power
– Resource allocation
changes
• Individual
Sources
– Habit
– Security
– Economic factors
– Fear of the
unknown
– Lack of
awareness
– Social factors

19. Managing Successful Organization
Change and Development
• Keys to Managing Change in
Organizations
– Consider international issues
– Take a holistic view
– Start small
– Secure top management support
– Encourage participation by those affected by
the change
– Foster open communication
– Reward those who contribute to change

20. Different Types of
Planned Change
• Magnitude of Change
– Incremental
– Quantum
• Degree of Organization
– Over organized
– Underorganized
• Domestic vs. International Settings

21. Diagnosing
Organizational Systems
• The key to effective diagnosis is…
–Know what to look for at each
organizational level
–Recognize how the levels affect each
other

22. Organization-Level
Diagnostic Model
Inputs
Technology
Strategy Structure
HR Measurement
Systems Systems
General
Environment
Industry
Structure
Design Components
Organization
Effectiveness
Outputs

23. Organization Environments
and Inputs
• Environmental Types
– General Environment
– Task Environment and Industry Structure
– Rate of Change and Complexity
– Enacted Environment
• Environmental Dimensions
– Information Uncertainty
– Resource Dependency

24. Organization Design Components
• Strategy
– the way an organization uses its resources
(human, economic, or technical) to gain
and sustain a competitive advantage
• Technology
– the way an organization converts inputs
into products and services
• Structure
– how attention and resources are focused
on task accomplishment

25. Organization Design Components
• Human Resource Systems
– the mechanisms for selecting, developing,
appraising, and rewarding organization
members
• Measurement Systems
– methods of gathering, assessing, and
disseminating information on the activities of
groups and individuals in organizations

26. Organization Design Components
• Organization Culture
– The basic assumptions, values, and norms
shared by organization members
– Represents both an “outcome” of organization
design and a “foundation” or “constraint” to
change

27. Outputs
• Organization Performance
– e.g., profits, profitability, stock price
• Productivity
– e.g., cost/employee, cost/unit, error rates,
quality
• Stakeholder Satisfaction
– e.g., market share, employee satisfaction,
regulation compliance

28. Goal Clarity
Task Group
Structure Functioning
Group Performance
Composition Norms
Group-Level Diagnostic Model
Inputs Design Components Outputs
Organization
Design
Group
Effectiveness

29. Group-Level Design Components
• Goal Clarity
– extent to which group understands its objectives
• Task Structure
– the way the group’s work is designed
• Team Functioning
– the quality of group dynamics among members
• Group Composition
– the characteristics of group members
• Performance Norms
– the unwritten rules that govern behavior

30. Group-Level Outputs
• Product or Service Quality
• Productivity
– e.g., cost/member, number of decisions
• Team Cohesiveness
– e.g., commitment to group and
organization
• Work Satisfaction

31. Possible Effects of Feedback
Feedback occurs
What is the direction
of the feedback?
Is the energy created
by the feedback?
No
Change
Do structures and
processes turn energy
into action?
Change
Failure,
frustration,
no change
Anxiety,
resistance,
no change
Energy to use
data to identify and
solve problems
Energy
to deny or
fight data
NO
YES
NO
YES

32. The Design of
Effective Interventions
• Contingencies Related to the
Change Situation
• Readiness for Change
• Capability to Change
• Cultural Context
• Capabilities of the Change Agent

33. The Design of
Effective Interventions
• Contingencies Related to the
Target of Change
• Strategic Issues
• Technology and structure issues
• Human resources issues
• Human process issues

34. Intervention Overview
• Human Process Interventions
• Technostructural Interventions
• Human Resources Management
Interventions
• Strategic Interventions

35. Human Process Interventions
• Process Consultation and Team
Building
• Third-party Interventions (Conflict
Resolution)
• Organization Confrontation Meeting
• Intergroup Relationships
• Large-group Interventions

36. Technostructural Interventions
• Structural Design
• Downsizing
• Reengineering
• Parallel Structures
• High Involvement Organizations
• Total Quality Management
• Work Design

37. Human Resources Management
Interventions
• Goal Setting
• Performance Appraisal
• Reward Systems
• Coaching and Mentoring
• Career Planning and Development
• Management and Leadership
• Managing Work Force Diversity
• Employee Wellness Programs

38. Strategic Interventions
• Transformational Change
– Integrated Strategic Change
– Organization Design
– Culture Change
• Continuous Change
– Mergers and Acquisitions
– Alliances and Networks

39. Strategic Interventions
• Transorganizational Change
– Self-designing Organizations
– Organization Learning and Knowledge
Management
– Built to Change Organizations

40. Motivating Change
Creating Vision
Developing
Political Support
Managing the Transition
Sustaining Momentum
Effective
Change
Management
Change Management Activities

41. Motivating Change
• Creating Readiness for Change
– Sensitize the organization to pressures for change
– Identify gaps between actual and desired states
– Convey credible positive expectations for change
• Overcoming Resistance to Change
– Provide empathy and support
– Communicate
– Involve members in planning and decision making

42. Creating a Vision
• Discover and Describe the
Organization’s Core Ideology
– What are the core values that inform
members what is important in the
organization?
– What is the organization’s core purpose or
reason for being?
• Construct the Envisioned Future
– What are the bold and valued outcomes?
– What is the desired future state?

43. Developing Political Support
• Assess Change Agent Power
• Identify Key Stakeholders
• Influence Stakeholders

44. Change as a Transition State
Current
State
Transition
State
Desired
Future
State

45. Implementation and Evaluation
Feedback
Diagnosis
Design and
Implementation
of Interventions
Alternative
Interventions
Implementation of
Intervention
Clarify
Intention
Plan for
Next Steps
Implementation
Feedback
Measures of
the Intervention
and Immediate
Effects
Evaluation
Feedback
Measure of
Long-term
Effects

46. Institutionalization Framework
Organization
Characteristics
Intervention
Characteristics
Institutionalization
Processes
Indicators of
Institutionalization

47. Organization Characteristics
• Congruence
– Extent to which an intervention supports or
aligns with the current environment, strategic
orientation, or other changes taking place
• Stability of Environment and Technology
• Unionization

48. Intervention Characteristics
• Goal Specificity
• Programmability
• Level of Change Target
• Internal Support
• Sponsor

49. Institutionalization Processes
• Socialization
• Commitment
• Reward Allocation
• Diffusion
• Sensing and Calibration

50. Indicators of Institutionalization
• Knowledge
• Performance
• Preferences
• Normative
Consensus
• Value Consensus

51. Contingencies Influencing
Structural Design
Environment
Organization
Size
Technology
Organization
Goals
Worldwide
Operations
Structural
Design

52. The Downsizing Process
• Clarify the organization’s strategy
• Assess downsizing options and make
relevant choices
• Implement the changes
• Address the needs of survivors and those
who leave
• Follow through with growth plans

53. Downsizing Tactics
Tactic Characteristics Examples
Workforce
Reduction
 Reduces headcount
 Short-term focus
 Fosters transition
 Attrition
 Retirement/buyout
 Layoffs
Organization
Redesign
 Changes
organization
 Medium-term focus
 Fosters transition &
transformation
 Eliminate functions,
layers, products
 Merge units
 Redesign tasks
Systemic
 Changes culture
 Long-term focus
 Fosters
transformation
 Change
responsibilities
 Foster continuous
improvement
 Downsizing is normal

54. The Reengineering Process
• Prepare the organization
• Specify the organization’s strategy and
objectives
• Fundamentally rethink the way work gets
done
– Identify and analyze core business
processes
– Define performance objectives
– Design new processes
• Restructure the organization around the
new business processes.

55. Characteristics of
Reengineered Organizations
 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.
 Organization structures change from hierarchical to flat
 Managers change from supervisors to coaches; executives
change from scorekeepers to leaders

56. Characteristics of
Transformational Change
• Triggered by Environmental and Internal
Disruptions
• Aimed at Competitive Advantage
• Systemic and Revolutionary Change
• Demands a New Organizing Paradigm
• Driven by Senior Executives and Line
Management
• Involves Significant Learning

57. Integrated Strategic Change
(ISC)
Integrated Strategic Change ………
is a deliberate coordinated process that
leads to gradually or radically systemic
realignments between the environment
and a firm’s strategic orientation
resulting
in improvement in performance and
effectiveness.

58. The Integrated Strategic Change Process
Strategy
S1
Organization
O1
Organization
O2
Strategy
S2
Strategic
Change
Plan
Strategic Analysis Strategic Choice
Implementation

59. ISC Application Stages
• Strategic Analysis
– Assess the readiness for change and top
management’s ability to carry out change
– Diagnose the Current Strategic Orientation
• Strategic Choice
– Top management determines the content of the
strategic change
• Designing the Strategic Change Plan
– Development of a comprehensive agenda to
achieve the change
• Implementing the Strategic Change Plan

60. Organizational Design
Conceptual Framework
• Strategy
• Structure
• Work Design
• Human Resources Practices
• Management and Information Systems
Key Point
• Fit, Congruence, Alignment among
Organizational Elements

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

62. Organization Designs

63. Organization Design
Application Stages
• Clarifying the Design Focus
– Create the overall framework, begins with examining strategy
and objectives and determining organization capabilities
needed
• Designing the Organization
– Results in an overall design for the organization, detailed
designs for the components, and preliminary plans for how to
implement
• Implementing the Design
– Puts the new structures, practices and systems into place,
draws heavily leading and managing change methods

64. The Concept of Organization Culture
Basic
Assumptions
Values
Norms
Artifacts

65. Diagnosing Organization Culture
• Behavioral Approach
– Pattern of behaviors (artifacts) most related
to performance
• Competing Values Approach
– Pattern of values emphasis characterizing
the organization
• Deep Assumptions Approach
– Pattern of unexamined assumptions that
solve internal integration and external
adaptation problems well enough to be
taught to others

66. Competing Values Approach
Flexibility & Discretion
Stability & Control
Internal
Focus
&
Integration
Market
Hierarchy
Clan Adhocracy

67. Culture Change Application Stages
• Establish a clear strategic vision
• Get top-management commitment
• Model culture change at the highest level
• Modify the organization to support change
• Select and socialize newcomers; downsize
deviants
• Develop ethical and legal sensitivity

68. Self-Designing Organizations
• Systemic change process altering most
features of the organization
• Process is ongoing, never finished—
continuous improvement and change
• Learning as You Go—on-site innovation
• Need support of multiple stakeholders
• All levels of the organization adopt new
strategies and change behaviors

69. Organization Learning &
Knowledge Management
• Organization Learning interventions
emphasize the structures and social
processes that enable employees and
teams to learn and share knowledge
• Knowledge Learning focuses on the
tools and techniques that enable
organizations to collect, organize, and
translate information into useful
knowledge

70. Organization Learning:
An Integrative Framework
Organization
Characteristics
Structure
Information
Systems
HR Practices
Culture
Leadership
Organization
Learning Processes
Discovery
Invention
Production
Generalization
Organization
Knowledge
Tacit
Explicit
Competitive
Strategy
Organization
Performance
Knowledge Management
Organization Learning

71. Characteristics of a
Learning Organization
• Structures emphasize teamwork, information
sharing, empowerment
• Information systems facilitate rapid acquisition
and sharing of complex information to manage
knowledge for competitive advantage
• Human resources reinforce new skills and
knowledge
• Organization culture encourages innovation
• Leaders model openness and freedom to try
new things while communicating a compelling
vision

72. Organization Learning Processes
• Single loop learning
– Most common form of learning
– Aimed at adapting and improving the status
quo
• Double loop learning
– Generative learning
– Questions and changes existing assumptions
and conditions
• Deuterolearning
– Learning how to learn
– Learning how to improve single and double
loop learning

73. Knowledge and Performance
• Organization knowledge must be
relevant and applied effectively to the
competitive strategy
• Link organization learning processes to
organization performance
• Growing emphasis on the value of
intellectual assets and services

74. Knowledge Management
Interventions
• Generating Knowledge
– Identify knowledge for competitive strategy
– Develop ways to acquire or create that
knowledge
• Organizing Knowledge
– Put knowledge into a usable form
– Codification and Personalization
• Distributing Knowledge
– Making knowledge easy to access, use &
reuse

75. Built-To-Change Organizations
• Organizations are designed with the
ability to change constantly to create
the best sustainable source of
competitive advantage.
• Organizations operate in complex
and rapidly changing environments

76. Built to Change
Application Stages
• Create a Change-Friendly Identity
• Pursue Proximity
• Build an Orchestration Capability
• Establish Strategic Adjustment a Normal
Condition
• Seek Virtuous Spirals

77. Application Stages for
Transorganizational Development
Identification Convention Organization Evaluation
Who should
belong to the
transorganizational
System (TS)?
• Relevant skills,
knowledge,
and resources
• Key stakeholders
Should a TS
be created?
• Costs and
benefits
• Task
perceptions
How to organize
for task
performance?
• Communication
• Leadership
• Policies and
procedures
How is the TS
performing?
• Performance
outcomes
• Quality of
interaction
• Member
satisfaction

78. 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.

79. Merger and Acquisition Rationale
• Diversification
• Vertical integration
• Gaining access to global markets,
technology, or other resources
• Achieving operational efficiencies,
improved innovation, or resource sharing

80. 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

81. 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

82. 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

83. 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

84. Cultural Context for Change
• Context Orientation
• Power Distance
• Uncertainty Avoidance
• Achievement Orientation
• Individualism

85. Context
• The extent to which meaning in
communication is carried in the words
• Organizations in high context cultures
tend to value ceremony and ritual, the
structure is less formal, there are fewer
written policies, and people are often late
for appointments

86. Power Distance
• Extent to which members of a society
accept that status and power are
distributed unequally in an organization
• Organizations in these cultures tend to be
autocratic, possess clear status
differences, and have little employee
participation

87. Uncertainty Avoidance
• The extent to which members of a
society tolerate the unfamiliar and
unpredictable
• Organizations in these cultures tend to
value experts, prefer clear roles, avoid
conflict, and resist change

88. Achievement Orientation
• The extent to which people in a society
value assertiveness and the acquisition of
material goods
• Organizations in these cultures tend to
associate achievement with wealth and
recognition, value decisiveness, and
gender roles are clearly differentiated.

89. Individualism
• The extent to which people in a society
believe they should be responsible for
themselves and their immediate family
• Organizations in these cultures tend to
encourage personal initiative, value time
and autonomy, accept competition, and
autonomy is highly valued

90. International Strategic
Orientation
• Characteristics of the International Design
– Sell existing products/services to nondomestic
markets
– Goals of increased foreign revenues
• Implementing the International Orientation
– OD facilitates extending the existing strategy
into the new market
– Cross-cultural training and strategic planning

91. The Global Strategic Orientation
• Characteristics of the Global Design
– Centralized with a global product structure
– Goals of efficiency through volume
• Implementing the Global Orientation
– OD supports career planning, role clarification,
employee involvement, conflict management and
senior management team building to help achieve
improved operational efficiency
– OD helps the organization transition to global
integration from local responsiveness

92. The Multinational
Strategic Orientation
• Characteristics of the Multinational Design
– Operate a decentralized organization
– Goals of local responsiveness through
specialization
• Implementing the Multinational Orientation
– OD helps with intergroup relations, local
management selection and team building
– OD facilitates management development,
reward systems, and strategic alliances

93. Transnational Strategic
Orientation
• Characteristics of the Transnational Design
– Tailored products
– Goals of learning and responsiveness through
integrations
• Implementing the Transnational Orientation
– Extensive selection and rotation
– Acquire cultural knowledge and develop intergroup
relations
– Build corporate vision

94. Global Social Change Organizations
 Their primary task is a commitment to serve as an agent of
change in the creation of environmentally and socially
sustainable world futures
 They have discovered and mobilized innovative social-
organizational architectures
 They hold values of empowerment in the accomplishment of
their global change mission
 They are globally-locally linked in structure, membership, or
partnership and thereby exist as entities beyond the nation-
state
 They are multi-organizational and often cross-sectoral

95. Application Stages of
Global Social Change Organizations
• Build the local organization
– Using values to create the vision
– Recognizing that internal conflict is often a function of external
conditions
– Understanding the problems of success
• Create horizontal linkages
– Build a network of local organizations with similar views and
objectives
• Develop vertical linkages
– Create channels of communication and influence upward to
governmental and policy-level, decision-making processes