Unit 1 – Session 1

Chapter 1

Organization Development and Reinventing

the Organization

An Experiential Approach to Organization Chapter 1

Development 7th edition Slide 1
 Learning Objectives

 Define OD and recognize need for change.

 Describe culture and understand its impact.
 Understand the psychological contract.
 Describe five stages of OD.

An Experiential Approach to Organization Chapter 1

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 The Workout: Organization
Changes at GE (part 1 of 2)

GE has training center for managers.

Participants said GE was slow to make
changes.
Workout is program that came from sessions.

An Experiential Approach to Organization Chapter 1

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 The Workout: Organization
Changes at GE (part 2 of 2)

In workout employees take the leadership in

bringing about changes.
GE continues to use workout so it can reinvent
itself.

An Experiential Approach to Organization Chapter 1

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 Challenges for Organizations

Change avalanching down on us.

Tomorrow’s world different from today’s.
Organizations need to adapt to change.
Organizations in continuous interaction with
external forces.

An Experiential Approach to Organization Chapter 1

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 Figure 1.1
The Organizational Environment

An Experiential Approach to Organization Chapter 1

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 Course Outline

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Organizational Stakeholders

Exhibit 3.11
Copyright © 2005 Prentice Hall, Inc. All rights 3–8
reserved.
 What Is OD?

Long-range efforts and programs aimed at

improving an organization’s ability to survive
by changing problem-solving and renewal
processes.

An Experiential Approach to Organization Chapter 1

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 OD Is:

 Planned.
 Organization wide.
 Managed from top.
 Increases organization effectiveness.
 Planned interventions.
 Uses behavioral science knowledge.

An Experiential Approach to Organization Chapter 1

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 The Characteristics of OD

Planned change.
Collaborative approach.
Improve performance.
Humanistic values.
Systems approach.
Scientific approaches.

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 Table 1.1
Major Characteristics of the Field of OD

An Experiential Approach to Organization Chapter 1

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

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

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 Why OD?

Most cited reasons for beginning change

program:
 The level of competition.
 Survival.
 Improved performance.

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 Primary Goals of
Change Programs
Increase productivity.
Increase responsiveness.
Improve competitive position.
Increase employee involvement.
Increase employee morale.
Develop new managerial skills.

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 Table 1.2
Major Goals of Large-Scale Change Programs

An Experiential Approach to Organization Chapter 1

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

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 The Only Constant Is Change

Today's managers need new mind-set.

Flexibility.
Speed.
Innovation.
Constantly changing conditions.

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 Successful Firms
Share These Traits
 Faster.
 Quality conscious.
 Employee involvement.
 Customer oriented.
 Smaller.

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 Figure 1.2
Changing Organization of Twenty-First Century

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

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

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 Evolution of OD

Evolved since the late 1940s.

NTL Laboratory-Training methods.
Survey research and feedback.

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 Who Does OD? (part 1 of 3)

OD practitioners consist of specialists and those

applying OD in daily work:
 Professionals and specialists trained in OD.
 Managers and leaders applying OD.

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 Who Does OD? (part 2 of 3)

OD specialists:
• Internal practitioners – from within
organization.
• External practitioners – from outside
organization.

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 Who Does OD? (part 3 of 3)

Activities include:
 Team leaders developing teams.
 Building learning organizations.
 Implementing total quality management.
 Creating boundaryless organizations.

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 Organization Culture
A system of shared meanings including:
 Dress.  Feelings.
 Patterns of behavior.  Attitudes.
 Language.  Interactions.
 Value system.  Group norms.

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 Norms (part 1 of 2)

Organized and shared ideas of what members

should do and feel.
How behavior is regulated.

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 Norms (part 2 of 2)

Pivotal norms - essential to accomplishing

organization’s objectives.
Peripheral norms - support and contribute to
pivotal norms but not essential to
organization’s objectives.

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 Socialization Process

Process that adapts employees to culture.

New employees become aware of norms.
Employees encounter culture.
Individuals understand power, status, rewards,
and sanctions.

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 Figure 1.3
The Socialization Process

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Adjustment to Cultural Norms and
Socialization Occurs in 3 Ways
1. Rebellion - rejection of all values and norms.
2. Conformity - acceptance of all values and
norms.
3. Creative individualism - acceptance only of
pivotal values; rejection of others.

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 Figure 1.4
Basic Responses to Socialization

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 Psychological Contract

Unwritten agreement between individuals and

organization.
Open-ended so issues may be renegotiated.

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 A Model for Change

OD is continuing process with emphasis on

viewing organization as total system of
interacting and interrelated elements.

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 Figure 1.5
Organization Development’s Five Stages

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 Five-stage Model for OD Process
(part 1 of 5)

Stage one: Anticipating need for change.

• Someone recognizes need for change.
• There must be felt need for change.

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 Five-stage Model for OD Process
(part 2 of 5)

Stage two: Developing practitioner-client

relationship.
• OD practitioner enters system.
• Good first impressions and match
important.
• Practitioner establishes trust, open
communication, shared responsibility.

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 Five-stage Model for OD Process
(part 3 of 5)

Stage three: The diagnostic phase.

• Practitioner and client gather data about
system.
• Objective is to understand client’s
problems, identify forces causing situation,
and select change strategies.

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 Five-stage Model for OD Process
(part 4 of 5)

Stage four: Action plans, strategies, and

techniques.
• Series of interventions, activities, or
programs aimed at increasing
effectiveness.
• Programs apply OD techniques.

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 Five-stage Model for OD Process
(part 5 of 5)

Stage five: Self-renewal, monitor, and stabilize.

• As OD program stabilizes, need for
practitioner decreases.
• Monitor results.
• Stabilize change.
• Gradual disengagement of OD practitioner.

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 Key Words and Concepts

 Action research model - collecting

information, feeding back to client, developing
and implementing action programs.
 Change leader - person responsible for
change.

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 Client - person or organization that is being
assisted.
 Creative individualism - questioning of
peripheral norms, accepting of pivotal norms.
 External practitioner - person from outside
organization who serves as resource for
change.

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 Internal practitioner - internal resource for
change.
 Norms - organized and shared ideas
regarding what members should do and feel,
how behavior should be regulated, and what
sanctions should be applied.

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 Organization culture - system of shared
meanings, including language, dress, values,
norms of organization.
 Organization development - planned strategy
to bring about change.
 OD practitioner - people using, advocating,
and assisting others to implement OD.

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 OD specialist - professional who has
specialized and trained in OD and related
areas.
 Peripheral norms - support and contribute to
pivotal norms but not essential to
organization's objectives.

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 Pivotal norms - essential to organization's
objectives.
 Psychological contract - expectations
between individual and organization.
 Socialization - process of individual adjusting
to organization's culture.

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 Preparations for Next Chapter

 Read Chapter 2.
 Read instructions for Simulation 2.1.
 Read and prepare analysis for Case: The
NoGo Railroad.

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