Experiential Approach to Organization Development, 8E Donald R Brown Solution Manual

Type:

Solution Manual

Resource:

Experiential Approach to Organization Development

Edition:

8th Edition

Author(s):

Donald R. Brown

Contents Instructor Manual PART 1: ANTICIPATING CHANGE Chapter 1 Organization Development and Reinventing the Organization Chapter 2 Organization Renewal: The Challenge of Change Chapter 3 Changing the Culture

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17

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PART 2: UNDERSTANDING THE OD PROCESS Chapter 4 Role and Style of the OD Practitioner Chapter 5 The Diagnostic Process

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69

Chapter 6 Overcoming Resistance to Change

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PART 3: IMPROVING EXCELLENCE IN INDIVIDUALS Chapter 7 OD Intervention Strategies

107

Chapter 8 Process Intervention Skills

121

Chapter 9 Employee Empowerment and Interpersonal Interventions

135

PART 4: DEVELOPING HIGH PERFORMANCE IN TEAMS Chapter 10 Team Development Interventions Chapter 11 Intergroup Development

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Chapter 12 Goal Setting for Effective Organizations Chapter 13 Work Team Development

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PART 5: BUILDING SUCCESS IN ORGANIZATIONS Chapter 14 High-Performing Systems and the Learning Organization Chapter 15 Organization Transformation and Strategic Change Chapter 16 The Challenge and the Future for Organizations

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Test Bank PART 1: ANTICIPATING CHANGE Chapter 1 Organization Development and Reinventing the Organization Chapter 2 Organization Renewal: The Challenge of Change Chapter 3 Changing the Culture ii

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PART 2: UNDERSTANDING THE OD PROCESS Chapter 4 Role and Style of the OD Practitioner Chapter 5 The Diagnostic Process

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315

Chapter 6 Overcoming Resistance to Change

327

PART 3: IMPROVING EXCELLENCE IN INDIVIDUALS Chapter 7 OD Intervention Strategies

339

Chapter 8 Process Intervention Skills

347

Chapter 9 Employee Empowerment and Interpersonal Interventions

355

PART 4: DEVELOPING HIGH PERFORMANCE IN TEAMS Chapter 10 Team Development Interventions Chapter 11 Intergroup Development

367

379

Chapter 12 Goal Setting for Effective Organizations Chapter 13 Work Team Development

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401

PART 5: BUILDING SUCCESS IN ORGANIZATIONS Chapter 14 High-Performing Systems and the Learning Organization Chapter 15 Organization Transformation and Strategic Change Chapter 16 The Challenge and the Future for Organizations

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411

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PREFACE This Instructor’s Manual is designed to allow flexibility in the use of An Experiential Approach to Organization Development, 8th edition. Since the needs of instructors vary greatly, the detailed structure and guidance of this manual will provide adequate support for those of you who are using the experiential method for the first time.

Others of you will prefer to use your own teaching techniques. This manual provides opportunities for flexibility and improvisation for all instructors. Each of the units has been designed and tested in a two and one-half hour time period; however, each unit may be expanded or contracted to meet individual needs and requirements.

This Instructor’s Manual is designed to follow the 16 chapters in the text. It contains lecture notes, hints and suggestions for running the simulations, additional resources, answers for cases, test questions, and transparency masters.

Introduction to the Instructor’s Manual An Experiential Approach to Organization Development was written as a text for courses in organization development taught in colleges and universities within schools of management and administration. The text can also be used as a training manual by organizations with OD programs. It was designed specifically to provide a broad conceptual framework appropriate for the study of change in all types of complex organizations.

There is a wide variation among courses in organization development but, in most institutions, this course comes toward the end of the student’s course work. A large number of prerequisites have not been assumed for this course, as it is my goal to make this text appropriate for most programs offered by various institutions. It is desirable for the student to have a background in the behavioral sciences, management, and the functional areas of business. However, I have found most students and professionals, even without all those specific courses, have a sufficient background to succeed with the course material. Furthermore, students from outside the business school—such as those in education, public administration, psychology, and sociology—generally have satisfactory backgrounds via other similar courses. I have found that these students have little difficulty with the text and they frequently bring new insights and ideas to the class from their disciplinary areas, which add significantly to the discussions.

Organization of this Instructor’s Manual This manual is based upon experience in teaching courses in organization development and should prove to be a comprehensive aid in using An Experiential Approach to Organization Development, 8th edition. It is designed to share my ideas and experiences with you, the instructor.

Each chapter in this Instructor’s Manual is divided into the following sections: ▪

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Learning Objectives – The specific learning objectives from the text are reproduced for that chapter. The learning objectives are worded to be specific and measurable.

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Student Premeeting Preparation – The preparations that a student should perform before coming to class are listed. These are the same Premeeting Preparations that are in the textbook. The list of preparations assumes that you will be using all the simulations and the case for that chapter. Since it is unlikely that you will have enough time for your class to use all the experiential material, you may want to modify the Student Premeeting Preparations to reflect the specific activities you have planned for that chapter and class period. For example, if you are not going to use a simulation or case in that chapter, then you can announce the student preparations the preceding class period.

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Instructor Preparation and Materials – This is a reminder of special materials and preparations that that you will need to make. The list is normally centered around the simulations. For example, if an answer sheet to a simulation problem needs to be reproduced to hand out in class, a reminder will be given in this section.

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Lecture Outline – This section is a detailed outline of the text material for the chapter. As the Instructor’s Manual is available online in Word format, you will be able to modify this outline to fit your needs. Power Point lecture outlines are also available online and these may be printed and used as teaching notes or used with a computer to give a lecture.

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OD Applications – Within each chapter are one are two highlighted examples that illustrate organizations use of concepts that are discussed within that chapter.

The examples draw on material from publications such as the Wall Street Journal, Business Week, Fortune, and web sites of the organizations. Both good and bad practices are described. In an environment that is changing as quickly as what we are now experiencing, organizations’ successes and failures can quickly change. Likewise, the material in the examples can become dated. To maintain the relevancy of the examples, in my OD classes I assign several students to research the organizations discussed in that chapter’s OD Application and report any updates to the class.

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Review Questions – The answers to the Review Questions that are in the textbook are provided. Students may be assigned a question in advance or called upon in class to report their answers.

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Key Words and Concepts – Brief definitions are given to the Key Words and Concepts that are in the textbook. The Key Words and Concepts appear in the textbook material in boldface type.

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Additional Resources – This section varies from one chapter to another but typically includes a book that is particularly helpful in providing more information for the chapter. Additional simulations are provided in a format that you can easily reproduce for your class. Some chapters have a film that you may want to use. The films are “Hollywood” type films such as 12 Angry Men and you will probably want to have a list of discussion questions ready for your students. It is advisable to preview the film prior to using it in class to make sure it is appropriate to your class. A good source of information on films including their purchase is from http://imdb.com/. Most of the films are available in DVD format.

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Simulation Procedures – This sections lists student premeeting preparations, special materials that you will need to bring to class, hints for running a

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simulation, discussion questions, answers to a simulation if required with an answer sheet that is ready to be reproduced for your students, a time summary, and a place for you to make notes for future reference.

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Case Teaching Notes – Material is provided to streamline your case preparation time. You will likely want to add to this outline.

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Student Preparations for the Next Chapter – So that you can easily see what students need to do for the next chapter, a list is provided. This coordinates with the Premeeting Preparation that is in the textbook and Instructor’s Manual for the next chapter.

Following the above material is the test bank organized by chapters. The test questions are true false, multiple choice, and essay. Each question has the answer and is cross referenced to the page number in the textbook. The answer is in parenthesis at the end of each question. At www.pearsonhighered.com/brown are PowerPoint lecture presentations that can be downloaded.

The Experiential Learning Model The experiential approach is not intended to give textbook answers to problems but rather it is aimed at providing insights into the consequences of certain behaviors in different situations. Its primary goal is to stimulate individual interest and motivation and increase the understanding of associated conceptual and theoretical knowledge.

The experiential learning model provides an opportunity for the participants to gain meaningful knowledge from firsthand experience. This approach creates a framework for getting and using feedback about the participants’ management style and behavior so that they may become more proficient. The simulations provide for both content and process learning about the task itself and how interaction takes place. In the experiential approach, the participants learn by utilizing feedback on their own behavior and by increasing their awareness of the process part of group problem solving. A primary objective is learning “how to learn” from experience.

Experiential learning is based upon learning by doing rather than by rote memorization. This approach places major responsibility upon the learner and involves an active rather than a passive role. Working as a practitioner to an organization is the ideal way to acquire change agent skills and this text is designed to be used in that capacity. It is usually the exception when a class of undergraduate or even graduate students is allowed access to an organization in the role of an OD practitioner.

Consequently, behavioral simulations are provided for each of the basic stages of the OD process.

The basic experiential learning model involves four related steps: (See the following figure.)

1. Gaining conceptual knowledge and theories – reading about OD concepts and theories and doing pre-class preparation.

2. Activity in a behavioral simulation – problem solving, making decisions, and communicating; that is, practicing the concept and theories.

3. Analysis of activity – analyzing, critiquing, and discussing the way problems were solved and comparing the results of different approaches.

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4. Connecting the theory and activity with prior on-the-job or life situations – writing a short analysis of each activity connecting the learning, reflecting upon the results, and generalizing into the future.

Gaining Conceptual Knowledge and Theories The reading material provides a basic set of concepts and theories about the OD process. This is a starting point for the development of practitioner skills and styles.

Additional readings may be assigned when appropriate.

Activity in a Behavioral Simulation Behavioral simulations are provided where the participant is able to experiment with, practice, and develop new skills and approaches. My goal in designing this text was to create a learning environment in which participants have the opportunity to explore their own behavior and feelings toward themselves and others as well as to sharpen diagnostic and problem-solving skills. The immediate reaction to problem situations is to fall back upon older ways of behavior which have been effective in the past. In this way, the anxiety of trying to find new behaviors is often avoided. In the behavioral simulations, problems, which must be acted upon, are faced and resolved and feedback is given on the effectiveness or ineffectiveness of behaviors. The latter method allows the participant to experiment with new or different styles and skills.

Analysis of Activity Learning results from an analysis of the consequences of various actions during the simulation. In the analysis of an activity, we investigate how we went about solving a certain problem and how effective or ineffective the results were. We try to determine the .

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results a given action produces, how these results compare with alternative actions, and what unintended consequences may be associated with a given course of action. The analysis attempts to define and clarify the differences between where you are now and where you would like to be.

Connecting the Theory and Activity with Prior On-The-Job or Life Situations Finally, we use this experience to analyze past efforts and as a guide to future experience. To accomplish this, I have found the Change Analysis (CA) to be an effective learning tool. The CA is a short typewritten paper of two to three pages in length written just after the simulation is completed. Its contents include: ▪

An analysis of theoretical concepts from the reading and how this relates to the simulation or to past experiences. (But not a restatement of text material.)

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An analysis of one’s reactions, feelings, and observations during the behavioral simulation. (How did I feel during the simulation?)

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Relation of the class experience to some past or possible future situation. (How does this tie in with my own experience?)

Note: The CA must be an analysis; that is, it examines meaning and relationships and is not a set of minutes. It should include gut feelings, emotional reactions, etc., to change.

Although students in general have an aversion to writing papers, I have found in class evaluations that the students consistently feel that the CA is an essential learning element. I usually deal openly with this issue in the first class meeting and most classes have elected to use the CA; however, it is optional.

The Learning Experience of a Class Meeting Session It has been my experience that several factors enhance learning. First, it is necessary to emphasize the importance of completing premeeting preparation material and of the interdependence of class members in experiential learning. If several class members are unprepared, it slows the learning process and frequently the informality and shared responsibility is tested by a laxity of preparation. I have also found it helpful to have a brief premeeting discussion or “lecturette” and to highlight the key material; otherwise the task or content element of the simulation may overshadow the chapter material. Finally, time is always provided for the analysis, critique, and sharing of what happened in the simulation and determination of what aspects of the simulation can be extrapolated to other situations.

The learning experience of a class session (for 50- and 75-minute classes, the session may be thought of as the time needed to cover a chapter) should include the following five phases: 1. The introduction. The instructor presents a brief introduction explaining the objectives, procedures, and concepts of the chapter.

2. The team activity. The class breaks into groups of four to six members to carry out the simulation.

3. A comparison of results. The overall results or outcomes are shared among the various groups.

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4. The process analysis. The participants and instructor discuss the implications of the simulation. Here the instructor focuses upon how the groups functioned.

The instructor helps participants to become more aware of their own processes, to identify problems, and to generate their problem solutions.

5. Conclusion. The instructor and participants reflect upon the learning from the simulation in a brief review and analysis of key parts to tie it all together.

Student Evaluation and Grades The issue of evaluation in a course of this type poses some special problems. Since you are working similar to that of OD practitioner and the class is the client, it becomes difficult to use traditional exams as a means of evaluation. On the other hand, a practitioner or any manager is never completely free from evaluation, because they are often judged on the achievement of certain objectives. As there is a shared responsibility for achieving certain learning objectives, both you and the participants should share in the evaluation process. While exams may be used in this course, I have had the best results with a management-by-objectives type of approach based upon the following:

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Point credit for coming to class prepared. This assumes that a person who comes prepared learns something even though it may not be measurable.

Secondly, this person contributes to the learning of others.

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Team problem solving. Team processes as well as the improvement in the process activity and resulting output may be evaluated. A set number of points are given for team participation.

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The Change Analysis. The participant receives X points for each competed Change Analysis (CA). Because the CA provides a means of integrating the learning experience with theory, it is in effect a free form mini-exam. Normally, a participant only has to do ten or twelve out of the sixteen possible units to gain full credit.

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Case analysis. The cases provide an opportunity for the participants to “put it all together,” to bring their knowledge of OD to bear upon a problem situation, and a chance to monitor their own progress and compare skills to those of their fellow participants.

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Exams. True-false, multiple choice, and essay questions are included in this manual for instructors who prefer to use exams. Rarely do I give exams in the classes that I teach. Typically, the exams use class time that could be devoted to other activities. Occasionally I will have a class that gets lax in reading the text material and a brief five-minute quiz at the beginning of the class helps to “motivate” some students. However, I never surprise the class with a quiz or test.

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Review questions. The review questions at the end of each chapter serve three purposes: (1) for class discussion, (2) for individual and group assignments, and (3) for examination. I do not use all of the questions for each chapter. There is frequently some overlap and it is desirable to select those that seem most appropriate. In each chapter in the manual, I present illustrative examples of answers to these questions. My purpose is not to provide the only appropriate answer but rather to share some of my ideas regarding possible answers.

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Using these methods of evaluation, the participants set their own learning objectives.

They know how many points are needed for a given grade and are given feedback constantly on individual progress during the course. I have found that this system has the following advantages: ▪

The participant sets his/her own learning goals and the emphasis is upon personal development and growth.

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The participant knows from the beginning just what one needs to do to achieve a desired grade.

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The participant knows exactly where he/she stands at each point in the semester or quarter by comparing actual performance to the desired level.

Sequencing of Materials An Experiential Approach to Organization Development contains 16 chapters with simulation activities and cases making it adaptable to either the academic quarter (10 weeks) or the semester (16 weeks) system. In the quarter system some chapters will need to be combined or deleted.

The simulations are set up to allow flexibility in the timing and suggested times are provided as a guide, allowing for differences between instructors and classes. An instructor may choose to place greater emphasis upon certain aspects more than other aspects. I have found that some simulations remain relatively constant from class to class, while others will vary. In addition, one class may get deeply into a simulation, while others may not. Most of the simulations have been used successfully over several semesters and have been used in three different class formats: one weekly 3-hour session, two weekly 1 1/2-hour meetings, and three weekly 50-minute meetings. While the results have varied, in general, the longer sessions seem to be the best suited for this type of course.

I prefer to teach this course under the semester system with 16 weekly sessions; however, I have also taught the course on a quarter system. In ten-week quarters, I usually assign one to two chapters per week. The students have the responsibility for reading and completing the pre-work for class activities. Class time is used to develop the concepts further rather than reviewing the book. If additional class hours are available, I use the time to have more student critiques rather than to increase the reading assignments.

In addition to the text, I like to have students become familiar with some of the current literature in the field, which helps provide a sense of relevancy for the subject matter. I assign one or two articles, taken from current periodicals, for each chapter. In this way, the outside reading can be kept current and directly related to the text. I ask students to do research on some of the organizations mentioned in the text. The material in the boxed inserts in the text (OD Applications) can change quickly. Rather than use hypothetical businesses as examples, I have found that the real world examples used in the text provide more interest to students. I encourage students to update the material and bring their findings to class. The Wall Street Journal, Business Week, and Fortune magazines have good online databases with access to some of the material not requiring a paid subscription. Many libraries have access to Internet databases and these lend themselves well to doing searches on organizations and topics.

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I recognize that there is more material in the text than most instructors can cover in a semester. There will not be enough time each week if for every chapter you engage in a lecture, class discussion and questions, simulations, cases, outside readings, and periodically an exam. You will need to pick and choose activities that best fit your own style and the needs of your students. Think of this text as a resource manual that contains text material and a variety of learning activities. You may elect not to cover some simulations and cases, or give brief coverage to or even omit a chapter. You will need to use your own professional judgment to decide what is appropriate for your situation.

Following are suggested course outlines for a 16-week semester and a 10-week quarter.

A Suggested Course Outline for a 16-Week Semester

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Week

Chapter

Topic

1

1

Organization Development and Reinventing the Organization

2

2

Organization Renewal: The Challenge of Change

3

3

Changing the Culture

4

4

Role and Style of the OD Practitioner

5

5

The Diagnostic Process

6

6

Overcoming Resistance to Change

7

7

OD Intervention Strategies

8

8

Process Intervention Skills

9

9

Employee Empowerment and Interpersonal Interventions

10

10

Team Development Interventions

11

11

Intergroup Development

12

12

Goal Setting for Effective Organizations

13

13

Work Team Development

14

14

High-Performing Systems and the Learning Organization

15

15

Organization Transformation and Strategic Change

16

16

The Challenge and the Future for Organizations

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A Suggested Course Outline for a 10-Week Quarter Week

Chapter

Topic

1

1

Organization Development and Reinventing the Organization

2

2

Organization Renewal: The Challenge of Change

3

Changing the Culture

4

Role and Style of the OD Practitioner

5

The Diagnostic Process

6

Overcoming Resistance to Change

7

OD Intervention Strategies

8

Process Intervention Skills

9

Employee Empowerment and Interpersonal Interventions

6

10

Team Development Interventions

7

11

Intergroup Development

8

12

Goal Setting for Effective Organizations

13

Work Team Development

14

High-Performing Systems and the Learning Organization

15

Organization Transformation and Strategic Change

16

The Challenge and the Future for Organizations

3

4

5

9

10

Resources Available On the Web Available on the Internet at www.pearsonhighered.com/brown are resources specifically for this book. You can download this Instructor’s Manual and the test bank in Word format. PowerPoint lecture presentations are also available for download. If you have the appropriate software, you will be able to edit all of these files and tailor them specifically for your needs. If you need assistance in obtaining access (user name and password), contact your Prentice Hall/Pearson representative.

Conclusion The experiential approach has been used by me in teaching organization development for over twenty years in colleges, universities, industry, and government. The success of the course and a high level of acceptance by students led to the development of the text.

The purpose of this guide is to share with you my experiences in using the text. The course structure has been made intentionally flexible to provide guidelines for supplementing your own unique knowledge and experience. Many of you will probably have a broad background in OD techniques and in using experiential learning, while others of you may be less familiar with the subject. The purpose of the Instructor’s Manual, then, is to share my framework for teaching this course, to provide adequate

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structure and guidance for those who may want it, and to allow sufficient flexibility for individual experimentation and improvisation.

This is not a static type of course but evolves with each different group of students.

Experimentation and innovation are encouraged.

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Chapter 1

Organization Development and Reinventing the Organization

Learning Objectives 1. Define the concept of organization development and recognize the need for change and renewal.

2. Describe organization culture and understand its impact on the behavior of individuals in an organization.

3. Understand the expectations of the psychological contract formed on joining an organization.

4. Describe the five stages of organization development.

Student Premeeting Preparation 1. Read Chapter 1.

2. Read and prepare analysis for Case: TGIF.

Instructor Preparation and Materials 1. Simulations: no special materials are required.

2. In general, this class begins in a unique way. Students are not usually asked about their expectations upon beginning a class, and they generally respond positively to this approach. Here you are beginning the practitioner-client relationship, sensing the need for change, and providing the framework for experiential learning. Open communication, high participation, an active role, and shared responsibility are course objectives.

Chapter 1 Organization Development and Reinventing the Organization .

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LECTURE OUTLINE 1) Learning objectives. (pg. 3) a) Define the concept of organization development and recognize the need for change and renewal. b) Describe organization culture and understand its impact on the behavior of individuals in an organization. c) Understand the expectations of the psychological contract formed on joining an organization. d) Describe the five stages of organization development.

2) The challenges for organizations. (pg. 3) a) Change is avalanching down on our heads. b) Tomorrow’s world will be different from today’s world. c) Organizations will need to adapt to changing market conditions and at the same time cope with the need for a renewing rather than a reactive workforce. d) Organizations are never completely static and they are in continuous interaction with external forces. (See Figure 1.1, The Organization Environment)

3) What is organization development? (pg. 4) a) Definition of OD. i) OD is long-range efforts and programs aimed at improving an organization’s ability to survive by changing its problem-solving and renewal processes. ii) OD is: (1) Planned.

(2) Organization wide.

(3) Managed from the top.

(4) Designed to increase organization effectiveness and health.

(5) Planned interventions that use behavioral science knowledge. b) The characteristics of O D. (See Table 1.1, Major Characteristics of the Field of OD) i) Change is planned. ii) Collaborative approach. iii) Performance orientation. iv) Humanistic orientation. v) Systems approach. vi) Scientific method.

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Chapter 1 Organization Development and Reinventing the Organization .

c) Why OD? i) Most cited reasons for beginning a change program: (1) The level of competition.

(2) Survival.

(3) Improved performance. ii) Primary goals of change programs: (1) Change the corporate culture.

(2) Become more adaptive.

(3) Increase competitiveness. d) Factors leading to the emergence of OD. i) The need for new organizational forms. ii) The focus on cultural change. iii) The increase in social awareness.

4) The only constant is change. (pg. 6) a) Change occurs so fast that it is a moving target. b) Organizations must anticipate change and respond to changing demands. c) Today’s managers need a new mind-set. i) Flexibility. ii) Speed. iii) Innovation. iv) Constantly changing conditions. d) Successful firms will share these traits: (See Figure 1.2, The Changing Organization of the Twenty-First Century.) i) Faster. ii) Quality conscious. iii) Employee involvement. iv) Customer oriented. v) Smaller.

5) The evolution of organization development. (pg. 8) a) OD has evolved since the late 1940s. b) NTL Laboratory-Training methods. c) Survey research and feedback. d) The extent of OD applications.

6) Who does OD? (pg. 9) a) OD practitioners consist of specialists and those applying OD in their daily work.

Chapter 1 Organization Development and Reinventing the Organization .

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b) OD specialists. i) Professionals trained in OD. ii) Sometimes called OD consultants. iii) Specialists are: (1) Internal practitioners – from within the organization.

(2) External practitioners – from outside the organization. c) Managers and leaders applying OD principles and concepts. i) May not call what they do OD. ii) The activities include: (1) Team leaders developing and coaching teams.

(2) Building learning organizations.

(3) Implementing total quality management.

(4) Creating boundaryless organizations.

7) The organization culture. (pg. 10) a) A system of shared meanings including: i) Language. ii) Dress. iii) Patterns of behavior. iv) Value system. v) Feelings. vi) Attitudes. vii) Interactions. viii) Group norms. b) Norms. i) Organized and shared ideas regarding what members should do and feel, how behavior is regulated, and what sanctions should be applied. ii) Pivotal norms - essential to accomplishing organization’s objectives. iii) Peripheral norms - support and contribute to the pivotal norms but are not essential to the organization’s objectives.

8) The socialization process. (pg. 11) a) The process that adapts employees to the organization’s culture. (See Figure 1.4, The Socialization Process) b) New employees become aware of the norms. c) Employees encounter the organization culture. i) Individuals need to understand things like power, status, rewards, and sanctions for specific types of behaviors. ii) The organization may be attempting to influence them. d) Adjustment to cultural norms and socialization occurs in 3 ways: (See Figure 1.5, Basic Responses to Socialization) i) Rebellion - rejection of all values and norms. ii) Conformity - acceptance of all values and norms.

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Chapter 1 Organization Development and Reinventing the Organization .

iii) Creative individualism - acceptance only of pivotal values; rejection of others. e) Creative organizations encourage feedback and allow employees to examine openly the pivotal and peripheral norms.

9) Psychological contract. (pg. 14) a) An unwritten agreement between individuals and the organization of which they are members. b) Open-ended so that issues may be renegotiated.

10) A model for organizational change. (pg. 14) a) OD is a continuing process with emphasis on viewing the organization as a total system of interacting and interrelated elements. b) Five-stage model for OD process. (See Figure 1.6, Organization Development’s Five Stages) i) Stage one: Anticipating need for change.

(1) Someone, usually a key manager, recognizes the need for change.

(2) There must be a felt need for change. ii) Stage two: Developing the practitioner-client relationship.

(1) The OD practitioner enters the system.

(2) Good first impressions and a match between the practitioner and client system are important.

(3) The practitioner attempts to establish a pattern of open communication, a relationship of trust, and an atmosphere of shared responsibility. iii) Stage three: The diagnostic phase.

(1) The practitioner and the client begin to gather data about the system.

(2) The objective is to better understand the client system’s problems, identify forces causing the situation, and to provide a basis for selecting change strategies. iv) Stage four: Action plans, strategies, and techniques.

(1) A series of interventions, activities, or programs aimed at resolving problems and increasing organization effectiveness.

(2) These programs apply such OD techniques as team building, intergroup development, goal setting, and job design. v) Stage five: Self-renewal, monitor, and stabilize.

(1) As the OD program stabilizes, the need for the practitioner should decrease.

(2) Monitor the results.

(3) Stabilize the change.

(4) Gradual disengagement of OD practitioner.

Chapter 1 Organization Development and Reinventing the Organization .

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OD Applications GE’s Epicenter of Change (p. 7) SUMMARY GE’s Leadership Center is the tool that the company uses to spread change throughout the organization. The Center is at the forefront of real-world application for organizational development, leadership, innovation and change.

MAJOR POINTS • • • • • • • •

The participants (around 10,000 annually) at the center include entry-level to the highest-performing executives.

GE also invites customers to the center to help solve mutual problems.

Courses typically run one to three weeks.

Subjects include leadership and essential basic management skills such as team building and giving presentations.

Executive courses incorporate subjects in leadership, innovation, and strategy.

Participants typically are 50% non-U.S. and new centers have opened outside of the U.S. GE believes that building strong leaders is strategically imperative.

GE’s current challenges and future success depends in part upon how well their employees learned their lessons at the Leadership Center.

QUESTIONS 1. How does the Leadership Center serve as a center for change at GE? Answer: By bringing employees ranging from entry-level to top level executives and from GE operations world-wide, GE trains leaders for the future. Though initially the center concentrated upon leadership training, the center now uses the center as a tool to spread change throughout the company. The center is at the vanguard of cutting-edge thinking in organizational development, leadership, innovation, and change. Customers of GE are also invited to the center so that they and GE employees can jointly discuss and solve major issues. By building strong leaders, GE is strategically preparing for a turbulent and challenging future.

2. Visit GE’s Web site to learn about the Leadership Center’s current programs at www.ge.com/ and www.ge.com/company/culture/leadership_learning.html.

Leave No One Behind At Starbucks (p. 13) SUMMARY Starbucks’ unique culture and philosophy has been instrumental in their success.

With the rapid expansion of the company and now confronted with new competitive 6

Chapter 1 Organization Development and Reinventing the Organization .

pressures, they face significant challenges of maintaining the “formula” that helped them become successful.

MAJOR POINTS • • • • • • •

One of Starbucks’ formula for success is a CEO who communicates a strong and clear vision to their employees.

The philosophy of “Leave no one behind” shows up in training, salaries, and benefit packages.

Employees consistently rate Starbucks as one of the best companies to work for.

Employee surveys found that the two principal reasons people work for Starbucks are opportunities to work with an enthusiastic team and to work in a place where they feel they have value.

Starbucks looks for people who are adaptable, self-motivated, passionate, and creative team players.

With a company of over 170,000 world-wide employees, maintaining an entrepreneurial spirit is a major objective.

With increasing competition and challenging economic conditions, Starbucks is striving to create both value and quality while maintaining the precepts that made it successful.

QUESTIONS 1. What do you think Schultz meant when he said that Starbucks’ objective is “Getting big and staying small?”

Answer: Schultz is likely trying to maintain the entrepreneurial spirit of Starbucks when they were a small and growing company. With a more mature company of around 170,000 employees, the challenge is not to allow the company to loose the culture that helped it become successful.

2. If possible, interview a present or former employee of Starbucks to get his or her impression of the company.

3. If you have visited a Starbucks, did you see any examples of teamwork among its employees?

4. Research the current lists of Fortune’s “100 Best Companies to Work For” and “America’s Most Admired Companies.” Information is available at www.money.cnn.com/magazines/fortune/fortune_archive/.

5. Research current information about Starbucks’ sales and revenue.

Information and their annual report can be found at www.starbucks.com/.

Chapter 1 Organization Development and Reinventing the Organization .

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Review Questions 1. How would you define “organization development”?

Answer: Organization development is a series of planned behavioral science intervention activities with the purpose of increasing the effectiveness of the system and developing the potential of all individual members. OD efforts are planned, systematic approaches to change that are carried out in collaboration with organization members to help find improved ways of working together toward individual and organizational goals.

2. How does OD differ from a single-change technique such as management training?

Answer: OD represents a systems approach that is concerned with the interrelationship of various divisions, departments, groups, and individuals as interdependent subsystems of the total organization. A single technique such as management training is aimed at changing individual behavior, whereas OD is focused on the larger goal of developing an organization-wide improvement in managerial style. OD uses many different techniques and no single technique represents the OD discipline.

3. Identify and demonstrate the uses of the psychological contract.

Answer: Psychological contract involves the expectations on the part of individuals and organizations to which they belong or in which they take part (i.e., work). Each side must understand that such a “contract” exists and that unless these expectations are met, there will be conflict.

4. Explain the difference between pivotal and peripheral norms.

Answer: Pivotal norms are essential to accomplishing the organization’s objectives.

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

5. Explain three basic responses an individual may have to socialization.

Answer: Socialization is the process that adapts employees to the organization’s culture.

An individual may respond to the socialization in three basic ways. At one extreme, an individual may conform to all the norms of the organization, resulting in uniformity of behavior and complete acceptance of organization values. At the other extreme, an individual may rebel, reject all values, or leave the organization altogether. Another alternative between the two previous extremes is for an individual to accept the pivotal norms and seriously question the peripheral norms, which is called creative individualism.

6. Read a book or an article and identify the organizational culture and norms it embodies.

7. Identify and explain the five stages of organization development.

Answer: Stage one is to anticipate a need for change. People in the organization perceive that the organization is in a state of disequilibrium or needs improvement. In stage two, relations between the practitioner and organization members (the client) develop. The 8

Chapter 1 Organization Development and Reinventing the Organization .

practitioner attempts to establish a pattern of open communication, a relationship of trust, and an atmosphere of shared responsibility. Stage three is the diagnostic phase where the practitioner and client gather data and analyze the data to identify problem areas and causal relationships. In stage four action plans, strategies, and techniques are developed to resolve problems and increase organization effectiveness. The plans and techniques include total quality management (TQM), job design, role analysis, goal setting, team building, and intergroup development. Stage five, the last stage, is a period of selfrenewal, monitoring, and stabilizing the OD program. In this stage the change program is monitored to make sure that the new behavior is stabilized and internalized. If this is not done, the tendency is for the system to regress to previous ineffective modes or states.

The client system needs to develop the capability to maintain innovation without outside support.

Chapter 1 Organization Development and Reinventing the Organization .

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KEY WORDS AND CONCEPTS Define and be able to use the following words and concepts: Action research model - collecting information, feeding back information to the client system, developing and implementing action programs to improve system performance. (p. 15) Change Agent - a person attempting to bring about planned change in an organization. (p. 10) Client System- the person or organization that is the subject of the change. (p. 10) Creative individualism - questioning of peripheral norms, accepting of pivotal norms. (p. 13) External practitioner - a person from outside the organization who serves as a resource for change. (p. 9) Internal practitioner - an internal resource for change, such as a manager or other member of the organization. (p. 9) Norms - the organized and shared ideas regarding what members should do and feel, how this behavior should be regulated, and what sanctions should be applied. (p. 10) Organization culture - a system of shared meanings, including language, dress, values, norms, and attitudes of an organization. (p. 10) Organization development - planned strategy to bring about change. (p. 4) OD practitioner - the people using, advocating, and assisting others to implement OD. (p. 6) OD specialist - professionals that have specialized and trained in organization development and related areas such as organization behavior, applied social sciences, interpersonal communications, and decision making. (p. 9) Peripheral norms - norms that support and contribute to the pivotal norms but that are not essential to the organization’s objectives. (p. 11) Pivotal norms - norms essential to an organization’s objectives. (p. 11) Psychological contract - expectations between an individual and an organization. (p. 14) Socialization - process of an individual adjusting to an organization’s culture. (p. 11) 10

Chapter 1 Organization Development and Reinventing the Organization .

ADDITIONAL RESOURCES Readings: Beckhard, Richard, Organizational Development: Strategies and Models (Reading, Mass.: Addison-Wesley Publishing Co., Inc., 1969.) If you have difficulty locating this classic OD book, you might try amazon.com and ebay.com.

Beckhard, Richard, Agent of Change: My Life, My Practice (San Francisco: Jossey-Bass, 1997.)

Bennis, Warren G., Organization Development: Its Nature, Origins, and Prospects (Reading, Mass.: Addison-Wesley Publishing Co., Inc., 1969.) This Bennis and the Beckhard book are part of an Addison-Wesley OD series published in the late 1960s.

Bennis, Warren G., The Essential Bennis (San Francisco: Jossey-Bass, 2009.)

Schein, Edgar, Organizational Culture and Leadership (San Francisco: Jossey-Bass, 2004.)

Tichy, Noel. M. and S. Sherman, Control Your Destiny or Someone Else Will (New York: HarperBusiness, 2001.)

Video: The Target Shoots First, 2000, 70 minutes, documentary. Directed, written, produced, and filmed by the lead character, Christopher Wilcha. A recent 22 year old college graduate goes to work at Columbia House and video tapes his work and experiences. He is a production manager for the mail order record business at Columbia. Subjects include learning the culture, norms, and psychological contracts. This film was shown on the Sundance TV channel. It may have become available. This is a good film to lead off the semester. Additional information is available at http://www.imdb.com. The film is also appropriate for Chapters 3 and 16.

Chapter 1 Organization Development and Reinventing the Organization .

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SIMULATION PROCEDURES Simulation 1.1 (p. 19) Auditioning For The Saturday Night Live Guest Host Spot 1. Student premeeting preparation: None.

2. Introduction: a. Here we want to set a norm of participation, fun, and positive feedback.

3. Suggestions: a. After a brief introduction, we begin sharing information about ourselves. b. A potential problem is one of class size, as it requires about five minutes per person for the introduction.

4. Discussion points: a. What norms have emerged? b. Did you learn more about the interviewer or the interviewee? c. Do you feel more comfortable with the class?

5. Total time suggested: 60 minutes You will need to adjust these times to fit your specific schedule and class plans.

Steps 1 and 2 Steps 3 and 4 Total

Minutes 20 40 60

Notes

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Chapter 1 Organization Development and Reinventing the Organization .

Simulation 1.2 (p. 21) The Psychological Contract 1. Student premeeting preparation: None 2. Suggestions: a. If possible, the class should be seated in a circle. How you handle the questions will help to determine the development of the course. Students are sometimes hesitant to ask meaningful questions and, at other times, to bring out serious issues as a test of how you will respond. Anything you can do to handle these issues openly will have a long-term payoff. b. The issues that are likely to emerge, or that you may want to present, are those of preclass preparation, exams, and grading. A critical problem for courses of this type is premeeting preparation. Sometimes students are under pressure in more structured courses and feel they can let this course-work slide. The timing of the simulations is such that when people fail to do the prework, it slows and delays the class and degrades the learning process. You very likely, on the other hand, will not feel comfortable in the role of police person (checking on homework), so this issue needs to be confronted. c. At this point, students are usually emphatic about two things: they don’t like exams and they don’t like to write papers. How you deal with these issues may well be a factor in your student / professor relationship. We leave the options open to the class, but explain the position of the previous class and that the simulations are important to learning. The prework is left up to the class, but it has never posed a serious problem.

3. Discussion points: a. b. c. d.

Expectations.

Roles.

Goals and rewards.

Grades.

4. Total time suggested: 15 to 115 minutes depending on parts used You will need to adjust these times to fit your specific schedule and class plans.

Part A, Steps 1 to 3 Part A, Step 4 Part B, Steps 1 to 3 Part B, Step 4 Part C, Steps 1 and 2 Part D, Steps 1 and 2 Part D, Step 3 Total

Minutes 15 20 15 20 15 15 15 115

Chapter 1 Organization Development and Reinventing the Organization .

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Notes

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Chapter 1 Organization Development and Reinventing the Organization .

CASE TEACHING NOTES T.G.I.F. (p. 28) I. Problems A. Macro 1. Employees drinking alcohol while at work pose liability problems to Quantum, especially when the alcohol is furnished by the company.

2. As Quantum grows, the potentially out-of-control beer busts may be only a symptom of rapid growth.

3. How to deal with motivation and esprit de corps in the face of rapid growth and change.

B. Micro 1. Stan shows indications of being unwilling to deal with potential problems and hear divergent points of view.

II. Causes 1. Rapid growth.

2. A degree of immaturity from some employees.

III. Alternatives 1. Maintain status quo.

2. Still have TGIF parties but don’t serve beer or other alcoholic beverages. a. Explain the legal problem very openly to employees. b. Introduce alternatives such as better food as a replacement for beer. c. Have team sports such as softball or volley ball.

3. Use no-host bar. a. This will likely not remove legal responsibility. b. Might be seen as being “cheap” by the employees.

4. Use designated driver or company bus.

5. Explain the problem to employees and ask for suggestions.

IV. Recommendations Remove the alcohol from the parties. The legal responsibilities are too great a risk. A combination of alternatives 2 and 5. Ask for suggestions as to a replacement for the alcohol.

Chapter 1 Organization Development and Reinventing the Organization .

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STUDENT PREPARATIONS FOR THE NEXT CHAPTER 1. Read Chapter 2.

2. Read the instructions for OD Skills Simulation 2.1. Before coming to class, complete Part A, Steps 1 and 2, which includes completing the Profile Survey, Profile Form, Class Performance Form, and Objectives Form. Familiarize yourself with the “Instructions for Developing OD Practitioner Roles and Skills” at the end of the simulation.

3. Read and analyze Case: The NoGo Railroad.

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Chapter 1 Organization Development and Reinventing the Organization .

Chapter 2

Organization Renewal: The Challenge of Change

Learning Objectives 1.

2.

3.

4.

Recognize the factors contributing to the accelerating rate of change.

Identify the ways an organization uses renewing processes to adapt to change.

Determine the individual and group methods of coping with change.

Understand and apply the sociotechnical-systems approach to OD.

Student Premeeting Preparation 1. Read Chapter 2.

2. Read the instructions for OD Skills Simulation 2.1. Before coming to class, complete Part A, Steps 1 and 2, that includes completing the Profile Survey, Profile Form, Class Performance Form, and Objectives Form. Familiarize yourself with the “Instructions for Developing OD Practitioner Roles and Skills” at the end of the simulation.

3. Read and prepare analysis for Case: The NoGo Railroad.

Instructor Preparation and Materials 1. Simulations: no special materials are required.

2. It is a good idea to review the Profile Survey and emphasize the need for candid, honest answers. To conserve class time, it is important that the students complete the Profile Survey before coming to class.

Chapter 2 Organization Renewal: The Challenge of Change .

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LECTURE OUTLINE 1) Learning objectives. (pg. 32) a) Recognize the factors contributing to the accelerating rate of change. b) Identify the ways an organization uses renewing processes to adapt to change. c) Determine the individual and group methods of coping with change. d) Understand and apply the sociotechnical-systems approach to OD.

2) The challenges of change. (pg. 32) a) Pressure for change. i) Market, product, and competitive conditions. ii) Downsizing, reengineering, flattening structures, going global, and initiating more sophisticated technologies. b) Renewal. i) Managers must make adaptive changes to the environment. ii) The only constant is change. iii) The focus of OD is on changing organizational systems, stressing the situational nature of problems, and their system-wide impact. iv) The systems approach provides a way of observing, analyzing, and solving problems in organizations. c) Constant change. i) Increasing rate of change. ii) Impact of future shock. iii) Organizations need the capacity to adapt to a changing environment. d) This chapter discusses the first stage of an OD program: anticipate the need for change. (See Figure 2.1, Stage One of Organization Development’s Five Stages.)

3) Organization renewal—adapting to change. (pg. 34) a) Organizational renewal is important to an organization’s survival. b) Organization renewal is defined as an ongoing process of building innovation and adaptation into the organization. c) Approaches to change dictated by the type of environment. i) Stable environment- stable product, few competitors. ii) Hyperturbulent environment – rapidly changing products, new competitors, rapid innovation, fast market growth. d) Model of Adaptive Orientation. (See Figure 2.2, Model of Adaptive Orientation in Organizations.) i) Two dimensions.

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Chapter 2 Organization Renewal: The Challenge of Change .

(1) Adaptive orientation.

(2) Environmental stability. ii) Four types of orientation.

(1) Sluggish-thermostat management (stable environment, low adaptation). (a) A managerial style based on low risk. (b) Organizations using this style typically have very stable goals and a highly centralized structure.

(2) Satisficing management (stable environment, high adaptation). (a) A style that is adequate and average. (b) Planning and decision-making are usually concentrated at the top (3) Reactive management (hyperturbulent environment, low adaptation). (a) A style of reacting to a stimulus after conditions in the environment have changed. (b) It is a short-term, crisis type of adaptation. (c) It often involves replacement of key people, hasty reorganization, and drastic cutting of personnel and product lines.

(4) Renewing/transformation management (hyperturbulent environment, high adaptation). (a) A style that introduces change to deal with future conditions before these conditions actually occur. (b) The organizations using this style are faster at developing new ideas, more responsive to competitive changes, and more participative in involving organization members in the renewal process.

4) The systems approach: finding new ways to work together. (pg. 38) a) The horizontal corporation breaks the company into its key processes and creates teams from different departments to run them. b) The organization as a system. i) A system is a set of interrelated parts unified by design to achieve some purpose or goal. ii) Systems have several basic qualities: (1) A system must be designed to accomplish an objective.

(2) The elements of a system must have an established arrangement.

(3) Interrelationships must exist among the individual elements of a system.

(4) The basic ingredients of a process are more vital than the basic elements of a system.

(5) An organization’s overall objectives are more important than the objectives of its elements. iii) A system consists of the flow of inputs, processes, and outputs. (See Figure 2.3, The Organization as an Open System) c) Open systems. i) An open system is in continual interaction with its environment. ii) It continually receives information termed feedback from its environment, which helps it adjust.

5) The sociotechnical system. (pg. 40)

Chapter 2 Organization Renewal: The Challenge of Change .

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a) A system of coordinated human and technical activities. (See Figure 2.4, The Sociotechnical System) i) The goals and values subsystem - the basic mission and vision of the organization. ii) The technical subsystem - the primary activities, including the techniques and equipment, used to produce the output. iii) The structural subsystem - the formal design, policies, and procedures. iv) The psychosocial subsystem (culture) - the network of social relationships and behavioral patterns of members. v) The managerial subsystem - spans the entire organization by directing, organizing, and coordinating all activities toward the basic mission. b) High performance systems. i) These systems occur by design and not by chance. ii) Key variables are the business situation, strategy, design elements, culture, and results. c) The contingency approach. i) The contingency view suggests that one must consider the specific organization and its environmental conditions in formulating change programs. ii) This approach identifies “if-then” relationships and suggests general change directions.

6) Future shock and change. (pg. 42) a) Future shock is too much change in too short a time. b) Alvin Toffler, author of Future Shock, suggests that future shock arises from the inability to adapt to accelerating rates of change. c) The capacity of management to react is strained. d) Managers must be more adaptable and flexible than every before. e) Constant and rapid changes occurring in finance and economics, technology, and social values.

7) Organization transformation (OT) and organization development.

(pg. 43) a) OT is the action of changing an organization’s form, shape, or appearance or changing organization energy from one form to another. b) Organization transformation is like a revolution. i) OT transforms the very framework and assumptions of an organization. ii) It is unplanned changes in response to pressures. iii) The change occurs in a short time frame. c) Organization development is like an evolution.

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Chapter 2 Organization Renewal: The Challenge of Change .

i) OD is planned changes on a large scale. ii) Longer time frame. iii) Gradual implementation. d) OD is planned organizational change. i) A deliberate attempt to modify the functioning of the total organization or one of its major parts in order to bring about improved effectiveness. ii) Persons attempting to bring about change are practitioners. iii) The organization being changed is the client system. e) Individual effectiveness. i) Change efforts that focus on individual effectiveness. ii) The methods range from empowerment training programs to high-powered executive development programs. iii) The goals are improved managerial, technical skills, or improved interpersonal competence. f) Team effectiveness. i) Change efforts that focus on the team or work group. ii) There is an emphasis on improving problem-solving, working through conflicts, and ways the group can improve its effectiveness and productivity. iii) Activities are designed to focus on task activities, and team process.

(1) Task activities are what the team does and team process is how the team works and the relationships among team members.

(2) One technique often used to help teams examine their operations is process observation.

(3) Process observations examine: (a) Content - the task of the group. (b) Process - the way the group functions. g) Organization effectiveness. i) Change efforts that focus on the total organization system. ii) These activities aim at improving effectiveness by structural, technical, or managerial subsystem changes.

Chapter 2 Organization Renewal: The Challenge of Change .

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OD Applications Google’s Culture (p. 35) SUMMARY In the face of rapid growth, Google still operates under the same freewheeling managerial style that it started with. A central challenge is to develop further their creative culture.

MAJOR POINTS • • • • •

Though Google has a CEO, Eric Schmidt, it is in practice co-managed by Schmidt and its two founders, Larry Page and Sergey Brin.

Challenge to maintain a creative culture with a world wide workforce of over 20,000.

The company uses fluid working groups where engineers move to projects that interest them.

Engineers are encouraged to spend 20 percent of their time working on their own research projects.

Though Google has the outward impression of being disorganized, it maintains its focus and strategy.

QUESTIONS 1. Do you think Google will be able to maintain its controlled-chaos type of culture? Support your position.

2. Research Google to determine if it has been able to maintain its culturestrategy mix and remain competitive. Google’s web site for corporate information is www.google.com/about.html.

Apple and Renewal (p. 43) SUMMARY Apple’s mission of giving customers more choices and better products has produced a highly innovative and profitable company.

MAJOR POINTS • • • •

Apple consistently shows up on business magazine lists as one of the most innovative companies and at the top of Fortune 500 companies based on total return to shareholders.

A large part of the success can be attributed to the culture defined primarily by co-founder Steven Jobs.

Jobs’ perfectionist approach to product development has caused some internal problems.

His management style tends toward throwing tantrums and humiliating employees who disagree with his ideas.

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Chapter 2 Organization Renewal: The Challenge of Change .

•

In terms of strategy, execution, and day-to-day operations, Tim Cook is critical to Apple’s success.

QUESTIONS 1. Research Apple’s product history to discover the progression of its major products.

2. What are its newest product innovations? Apple’s Web site is www.apple.com/.

3. To what do you attribute Apple’s ability for self-renewal?

Chapter 2 Organization Renewal: The Challenge of Change .

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Review Questions 1. What is the implication of organization renewal for today’s organizations?

Answer: Organization renewal is an ongoing process of being ready for change, preparing for change, expecting change, and learning to adapt to change. An organization must have planned change in order to survive. This process is called evolution. Organization transformation is defined as the action of changing the organization’s form, shape, or energy to cope with unplanned changes. In today’s organizations, this is called revolution, and survival rates are low.

2. Contrast the differences between a stable and a hyperturbulent environment.

Answer: Stable environment means unchanging basic products and services, competition, etc. A hyperturbulent or changing environment means rapidly changing products, competition, innovation, etc.

3. Compare and contrast the four types of management orientations used in relating to the environment.

Answer: Reactive—waits until something happens, then reacts.

Sluggish Thermostats—resists change and slow to adapt.

Satisficing—does only what is necessary to get by, “good enough.”

Renewal Transformation—looks ahead to prepare for change, makes necessary contingency plans in advance

4. Using companies who compete with one another (for example, Apple and Microsoft), position them on the adaptive orientation model in Figure 2.2. Support your position.

5. Explain a sociotechnical system and its five components.

Answer: An organization is an open system of coordinated human and technical activities. The functions and processes of the organization are not considered as isolated elements. Instead, they are parts reacting to and influencing the rest of the system. Its sociotechnical system’s five components are: The Goals and Values Subsystem - the basic mission and vision of the organization.

The Technical Subsystem - the primary functions, activities, and operations used to produce the output of the system.

The Structural Subsystem - the formal design, policies, and procedures.

The Psychosocial Subsystem (culture) - the network of social relationships and behavioral patterns of members.

The Managerial Subsystem - spans the entire organization by directing, organizing, and coordinating all activities toward the basic mission.

6. What lessons can future shock provide for organizations?

Answer: Future shock is too much change in too short a time. Future shock affects both managers and organizations. Management’s capacity is strained when change occurs too rapidly. In order to overcome future shock, managers must become adaptable and flexible. Uncertainties brought on by future shock make accurate planning more difficult 24

Chapter 2 Organization Renewal: The Challenge of Change .

and plans sometimes become out of date before they can be fully implemented. Since life cycles of products and services are shortened, organizations must become more adaptive and be able to change quickly. This means that new forms and models of organizations are required in order to meet the changing conditions.

Chapter 2 Organization Renewal: The Challenge of Change .

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KEY WORDS AND CONCEPTS Define and be able to use the following words and concepts: Client System - an organization employing a practitioner to assist them in planning change. (p. 44) Closed systems - exists only in theory; is self-contained and isolated from its environment. Content task of the group. (p. 39) Content - task of the group. (p. 45) Contingency approach - attempt to determine through “if-then” research the proper management technique to employ. (p. 41) Dynamic equilibrium - steady state, reacting with environment. (p. 39) Entropy - movement toward disorder and eventual termination of function. (p. 34) Feedback - results, reaction from behavior. (p. 39) Future shock - inability to cope with rapid change. (p. 42) Horizontal corporation - flattening the hierarchical organizational charts; reduction in layers of management. (p. 38) Hyperturbulent environment - rapid change. (p. 35) Open system - is interrelated and acts with its environment. (p. 39) Organization renewal - ongoing process of building innovation and adaptation into an organization. (p. 34) Organization transformation (OT) - process of coping with unplanned change by changing organization form or framework (revolution). (p. 43) Participant-observer - actively participate while being aware of group process. (p. 45) Process observation - technique used in examining groups that identifies separate dimensions (p. 45) Reactive management - waiting until something becomes a problem before reacting (p.

37) Renewing/transformational management - plans for change; makes contingency plans. (p. 37) Satisficing management - does only what is necessary to get by; management that is adequate and average. (p. 37) 26

Chapter 2 Organization Renewal: The Challenge of Change .

Sluggish management - style of management based on low risk, formalized procedures, and high degree of structure and control. (p. 36) Sociotechnical System - an organization with an open system of coordinated human and technical activities with five major subsystems. (p. 40) Stable environment - characterized by unchanging basic products and services, static level of competition, low level of innovation, formalized and centralized structure, and steady rate of growth. (p. 35) System - set of interrelated elements unified to achieve a goal or purpose. (p. 38) Systems approach - set of interrelated elements unified to achieve a goal or purpose. (p.

33) Task activities - what the group does. (p. 45) Team process - how the group works and the relationships among team members. (p. 45)

Chapter 2 Organization Renewal: The Challenge of Change .

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ADDITIONAL RESOURCES Readings: Amabile Teresa M. and Mukti Khaire, “Creativity and the Role of the Leader,” Harvard Business Review, October 2008, pp. 98-109.

Hamel, Gary, The Future of Management, (Boston, MA: Harvard Business School Press, 2007.)

Johnson, Deborah G. and Jameson M. Wetmore (editors), Technology and Society: Building Our Sociotechnical Future, (Cambridge MA: The MIT Press, 2009.) This is an edited book of readings on technology and society.

Toffler, Alvin Future Shock, (New York, Random House, Inc., 1970.) Does this 1970 book still hold any truths and lessons for today’s managers?

Ulrich, Dave, Steve Kerr, and Ron Ashkenas, The GE Work-Out: How to Implement GE’s Revolutionary Method for Busting Bureaucracy and Attacking Organizational Problems--Fast! (New York: McGraw Hill, 2002.)

Video: The Pixar Story. (2007, available through Disney/Pixar, see www.thepixarstory.com) This is a documnatary of the history of Pixar Animation Studios. The film is a behindthe-sceens view of Pixar and includes footage from the Pixar library. Some of the key people interviewed are Steve Jobs, George Lucas, Roy Disney, John Lasseter, and Ed Catmull. In addition to a history of the company, the viewer learns about the culture and self renewal capability of Pixar. This film fits well with this chapter on self renewal.

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Chapter 2 Organization Renewal: The Challenge of Change .

SIMULATION PROCEDURES Simulation 2.1 (p. 47) OD PRACTITIONER BEHAVIOR PROFILE I 1. Student premeeting preparation: a. Read the instructions. Before coming to class, complete Part A, Steps 1 and 2, which includes completing the Profile Survey, Profile Form, Class Performance Form, and Objectives Form. Familiarize yourself with the “Instructions for Developing OD Practitioner Roles and Skills” at the end of the simulation.

2. Suggestions: a. You might want to discuss briefly the idea of behavioral objectives (i.e., something you can do or demonstrate). b. Explain the role of the practitioner in Part B, Step 1. See the insert in the text, “Instruction for Developing Practitioner Roles and Skills.” c. You may have them use colored pens to create the Profile Form-one color for this chapter and another color when they complete the form in Chapter 16. d. Stress that all forms should be kept as they will be needed in chapter 16 when students will complete the profile at the end of the course.

3. Disscussion points: a. The idea of goal setting. b. The awareness of a need for change. c. The possibility of growth. d. The difference between a specific behavioral objective and vague generalizations. e. The role of the practitioner. f. The long-term use of skills/career development.

Total time suggested: 60 to 75 minutes You will need to adjust these times to fit your specific schedule and class plans.

Part A Part B Step 1 Step 2

Minutes before class

Total

Chapter 2 Organization Renewal: The Challenge of Change .

45 to 60 15 60 to 75

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Notes

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Chapter 2 Organization Renewal: The Challenge of Change .

CASE TEACHING NOTES The NoGo Railroad (p. 56) I. Problems A. Macro 1. Union problems need to be addressed at corporate level.

2. Massive changes are needed in personnel policies that can only be accomplished through intensive union and executive sessions.

3. This organization may not survive the needed changes. There may not be time for organization development to be used and the revolutionary method— organization transformation—may be too radical.

4. Changes may not be allowed by management at this time. Change is inevitable and the longer that NoGo waits, the more radical those changes will be.

B. Micro 1. Dave Keller is in a no-win situation.

2. The only hope Dave has of making all the needed changes would be to accomplish the needed changes over a long period of time with empowerment and support from top management.

3. In the short term, Dave can attempt to gain employee support. Because the union is so strong, it is doubtful that he can obtain much support.

II. Causes 1. Union stronghold.

2. Company has been reacting to changes instead of proactively forecasting changes.

3. Management is not cohesive; they do not share information, support, or resources with employers and lower-level managers.

III. Systems affected 1. Structural – job descriptions and the formal structure are very rigid, largely because of years of practice.

2. Psychosocial – Dave is very unsure of the security of his position and suspects he is being set up. Other employees, including some in management, want to preserve the status quo.

3. Technical – the technology has change through the years but the organization has failed to recognize the change. As evidence is the archaic job titles (fireman) and job descriptions.

4. Managerial – virtually no support from management for Dave to make changes. Management seems to be as much of the problem as unionized employees. Everyone seems to want to protect his or her turf.

5. Goals and values – though “status quo” is actually not a value, it never-the-less is what employees in many cases value. Their goal is not to change.

IV. Alternatives 1. Dave can forge on ahead and suggest changes as he sees them. If top management does not begin to press for changes, the organization will probably cease to exist.

Chapter 2 Organization Renewal: The Challenge of Change .

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2. Management needs to consider what they will offer to unions prior to the next contract in order to make the following changes. a. Positions need to be eliminated. b. Positions need to be combined. c. Featherbedding and nepotism need to be eliminated from all levels of the organization.

3. Some proposed “carrots”: a. Management reduces unnecessary managerial and corporate staff as well as union positions. b. The Board of Directors ties future management and union pay raises together. Pay increases will also be tied to productivity and profits.

4. Management should consider confrontation with union. a. This alternative needs to be carefully considered. b. There would be the possibility of violent confrontations. c. There will be many legal ramifications and expenses incurred by both sides. d. Even if the company is successful in obtaining concessions from the union, the company may have future problems. In unpopulated areas such as Montana, Idaho, and Washington, future employees will probably have ties to former union railroad employees.

V. Recommendations Dave should attempt to make the necessary changes for NoGo to become a healthy organization. Unless he is able to live with the old corporate culture, he will not be effective. When Dave is “fed up,” he will probably resign. Hopefully before that point, the company’s top management will become supportive of the needed change programs.

Meanwhile, Dave needs to be realistic about his future and keep his resume up to date.

32

Chapter 2 Organization Renewal: The Challenge of Change .

STUDENT PREPARATIONS FOR THE NEXT CHAPTER 1. Read Chapter 3.

2. Prepare and read the instructions for OD Skills Simulation 3.1. Prior to class, form into teams of six and select roles. Complete Step 1.

3. Read and analyze Case: The Dim Lighting Co.

Chapter 2 Organization Renewal: The Challenge of Change .

33

34

Chapter 2 Organization Renewal: The Challenge of Change .

Chapter 3

Changing the Culture

Learning Objectives 1.

2.

3.

4.

Recognize the importance of corporate culture to organizational success.

Identify the key factors used in assessing corporate culture.

Describe the culture and organizational factors that lead to effective organizations.

Describe the major ethical, value, and goal considerations of an OD program.

Student Premeeting Preparation 1. Read Chapter 3.

2. Prepare and read the instructions for OD Skills Simulation 3.1. Prior to class, form into teams of six and select roles. Complete Step 1.

3. Read and analyze Case: The Dim Lighting Co.

Instructor Preparation and Materials 1. Simulations: No special materials are required though you may want to duplicate the answers for Simulation 3.1. The answers are in the Simulation Procedures section of this manual.

Chapter 3 Changing the Culture .

35

LECTURE OUTLINE 1) Learning objectives. (pg. 62) a) Recognize the importance of corporate culture to organizational success. b) Identify the key factors used in assessing corporate culture. c) Describe the culture and organizational factors that lead to effective organizations. d) e) Describe the major ethical, value, and goal considerations of an OD program.

2) Creating a climate for change. (pg. 62) a) An issue facing managers and organizations is how to manage large-scale change. b) As change is inevitable, the challenge of managers is to: i) Create a renewing rather than a reactive managerial system. ii) Develop long-term efforts. c) Companies with outstanding financial performance often have powerful corporate cultures. i) Culture is often the key to an organization’s success. ii) Cultural change does not just happen in an organization. It is usually the result of a complex change strategy.

3) Understanding corporate culture. (pg. 62) a) Given an environment of rapid change, a static organizational culture can no longer be effective. b) What is corporate culture? i) A culture is a system of shared values (what is important); beliefs (how things work); and behavioral norms (how things are done here).

(1) Observed behavioral norms.

(2) Dominant values.

(3) “Rules of the game” - getting along.

(4) Learning the ropes for newcomers.

(5) The climate, both physical and treatment of outsiders. ii) Culture is derived from two subsystems, managerial and organizational. (See Figure 3.1, Culture Formation) (1) Managerial. (a) Through their actions and words, management defines a philosophy of how employees are treated. (b) A vision is usually articulated by top management.

(2) Organizational.

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Chapter 3 Changing the Culture .

(a) Factors brought in by the organization also help define the culture. (b) Technology a company utilizes will influence the culture. (c) Job descriptions and the structure of an organization (tall versus flat) influence the culture’s development c) The corporate culture and success. i) High-performing companies have strong cultures. ii) Many corporate cultures fail to adapt to change and therefore fail as economic entities. iii) Following corporate mergers, cultures often clash. d) Key factors that can improve a culture. i) Create a vision for the future. ii) Develop a model for change. iii) Reward changes.

4) Cultural resistance to change. (pg. 67) a) Changing a culture is not easy. b) Time is required because culture comes from shared behaviors and working relationships. c) A culture can prevent a company from adapting to a changing environment (example Levi Strauss & Co.) d) Some things bringing pressure on companies to be adaptable. i) Recession. ii) Deregulation. iii) Technological upheavals. iv) Social factors. v) Global competition. vi) Outsourcing. vii) Markets.

5) Tools for change in an adaptive organization. (pg. 67) a) Information. i) Provide people with information or the ability to gather information. ii) One method of providing information is open-book management.

(1) Key information is given to employees so that work teams can make job decisions.

(2) Employees learn to understand accounting and financial statements and use that knowledge in their work and planning. b) Support. i) If the project will cut across organizational lines, support and collaboration from other departments is needed. ii) Higher management’s support is required to provide a climate that supports people in taking risks.

Chapter 3 Changing the Culture .

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c) Resources. i) Includes funds, staff, equipment, and materials, to carry out the project. ii) Some companies have innovative programs for providing resources including: (1) Venture capital.

(2) Innovation banks. d) Key factors in cultural change. i) Understand old culture: Managers can’t change their course until they know where they are. ii) Follow outstanding units: Recognize exemplary units and use them as a model for change. iii) Encourage change in employees: Encourage employees to change and improve the current culture. iv) Involve employees: Avoid imposing cultural change and instead involve employees in discovering new ways of operating. v) Lead with a vision: The vision provides a guiding principle for change, but must be bought into by employees. vi) Recognize that large-scale change takes time: It may take three to five years for significant, organization-wide cultural change to take effect. vii) Live the new culture: The actions of managers carry more impact than their words.

6) Ethical, value, and goal considerations. (pg. 69) a) There are three basic organizational dimensions that affect performance. i) Managerial effectiveness.

(1) Accomplishment of specific organizational goals and objectives.

(2) Doing the right thing. ii) Managerial efficiency.

(1) The ratio of output (results) to input (resources).

(2) Doing the things right. iii) Motivational climate.

(1) The set of employee attitudes and morale that influence the level of performance. b) Three other criteria for organizational effectiveness. i) Adaptability. ii) Sense of identity. iii) Capacity to test reality. c) Ethical and value issues. i) Expertise - specialized knowledge and skills. ii) Autonomy - the right to decide how their function is to be performed and to be free from restrictions. iii) Commitment - feel a commitment to the discipline. iv) Code of ethics - adhere to professional self-discipline and a code of ethics. d) OD implementation issues. i) The success of an OD program is largely dependent upon the fit between OD 38

Chapter 3 Changing the Culture .

values and the organization’s values. ii) A key issue to resolve between the practitioner and the client is the value orientations, including beliefs about people, methods used to reach change, and the purpose of the change program. e) Compatibility of values. i) The degree to which the practitioner’s personal values are congruent with those of the client. ii) Some OD practitioners believe that their personal values should be compatible to those of the client. iii) Others believe that as long as the organization’s operations are legal, they have no problem in helping the client. iv) Some practitioners offer assistance only to those clients who can pay while others help a client regardless of the ability to pay. f) Imposed change. i) OD ideally is implemented voluntarily in organizations. ii) Top management may initiate a program and impose it upon lower levels. iii) OD practitioners need to be cognizant of the reality of power and politics in implementing change. g) Determining the priority of the goals. i) Which of the goals of an OD program is likely to be given precedence. ii) A challenge for the OD practitioner is to try to develop a balanced intervention.

(1) One that considers member rights and well-being along with improvements in productivity.

(2) How can the OD practitioner help improve the productive efficiency of the organization and at the same time improve the quality of work for its members. iii) OD values about the nature of human beings in an organization underlie the challenges of OD. (See Table 3.1, OD Values) (1) Respect for people.

(2) Trust and support.

(3) Power equalization.

(4) Confrontation.

(5) Participation.

Chapter 3 Changing the Culture .

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OD Applications The Culture at Setpoint Systems (p. 63) SUMMARY Setpoint’s products and attention to customers requires a culture where selfmotivated employees solve unique problems and have a thorough understanding of the business.

MAJOR POINTS • • • • •

Setpoint builds automation equipment that is unique to fill specific customer requirements This requires self-motivated employees who can solve problems and look for ways to improve processes and functions.

To accomplish this Setpoint uses project management and open-book accounting.

People on the production floor using these techniques understand the business and know where to focus attention.

The culture of Setpoint is one where employees understand the business and provide a thorough attention to the financials.

QUESTIONS 1. Is it reasonable to expect other manufacturing companies to be able to duplicate the culture that Setpoint has developed? Support your position.

Answer: Other manufacturers that provide one-of-a-kind products to meet specific customer requirements will need a similar culture to that of Setpoint.

This culture and the specific methods can not duplicate that of Setpoint but it will need to incorporate conditions that encourage and develop highly self-motivated employees that are able to solve problems and implement solutions.

2. Can culture be bought?

Answer: It is challenging for a company through a merger/but-out process to obtain the culture of another company. The unique climate that helps make Setpoint successful will require a considerable amount of work to transfer over to another company. Cultures are unique and defy a “cookie-cutter” approach.

3. What dangers would a merger pose for the culture at Setpoint?

Answer: A significant problem is that Setpoint’s culture could be overwhelmed by another culture. There is a tendency for another company to be intimidated or challenged by the culture of Setpoint and hence try to change Setpoint to become more like itself.

40

Chapter 3 Changing the Culture .

How Trilogy’s University Helps Build Its Culture (p. 68) SUMMARY Trilogy fosters new methods in the way it relates with its clients and employees. The company offers advantages of belonging to an organization in which mutual commitment builds continuity.

MAJOR POINTS • • • • • •

Though Trilogy is privately held, it successfully competes with some of the largest software companies within its market To do this Trilogy is aware that one of their key responsibilities is to attract and retain talented people Trilogy operates a three-month long “boot camp” where new employees are integrated into the company.

Employees learn the values and culture of Trilogy and receive comprehensive evaluation and feedback.

The program provides a critical source for renewal by providing new services and products to the company.

In the boot camp, relationships are formed and new leaders are created.

QUESTIONS 1. Do you think the practices of Trilogy will help it remain competitive? Why? 2. How does Trilogy transfer its culture to new employees?

Answer: The three-month boot camp is the primary method to integrate new employees into Trilogy. The program sets the tone for future relationships within the company. During the first month, candidates are in teams of approximately 20 where they work on creative projects. In the second month, the teams are broken into smaller teams where they develop a business model, marketing plans, and a prototype for a new product/service. In the third month, the candidate demonstrates personal initiative by working on their project either with their team or finding a sponsor some where in the company. The boot camp importantly serves as a source for research and development as well as a major source for self-renewal and transformation.

3. What other companies would you consider to be “enterprises of the future?”

Chapter 3 Changing the Culture .

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Review Questions 1. Describe or compare the corporate cultures of organizations you have worked in. What makes one more effective than another?

Answer: Answers are dependent upon student’s experiences.

2. Compare and contrast managerial efficiency and effectiveness.

Answer: Efficiency is aimed at short-term goals such as productivity and profitability in making the most efficient use of resources. Effectiveness refers to those actions aimed at furthering the organization’s long-term goals. In excellent organizations members are working toward both, but in some organizations short-term goals or efficiency is overemphasized at the expense of longer-range results. For example, a firm might look more profitable by cutting its research staff and advertising budget, but in the long term, the company will lose to more farsighted competitors.

3. Identify the key factors in cultural change.

Answer: 1. Create a vision for the future. A shared vision provides direction, focus, and commitment. Some very successful organizations began with a vision. This includes companies like Apple Computer and Federal Express. These visions are compelling and involve all members in striving toward goals.

2. Develop a model for change. Total organization change often starts in one unit or subculture of an organization. This model provides the example that can be transferred to other units.

3. Reward changes. A basic concept of motivation is that people tend to behave in ways that provide rewards or reinforcement. If the system still rewards the old culture, then it won’t make sense for people to change. Rewards include not only pay and promotion, but also other incentives.

4. Explain the role of tools for change in an OD program.

Answer: Information is an important tool as people need information or the ability to gather information. One method of providing information is open-book management.

This is a method of providing detailed accounting and financial information so that employees can use the knowledge in their work. Another tool is to provide support to people. This is particularly important if the project will cut across organizational lines.

Support and collaboration from other departments is needed. Higher management’s support is also required to provide a climate that supports people in taking risks.

Providing resources is a third tool required in an adaptive organization. This includes funds, staff, equipment, and materials, to carry out the project. Some companies have innovative programs for providing resources including venture capital and innovation banks.

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Chapter 3 Changing the Culture .

KEY WORDS AND CONCEPTS Define and be able to use the following words and concepts: Corporate culture - a system of shared values and beliefs that interact with people, structure, and systems of an organization to produce norms. (p. 63) Managerial effectiveness - ability to accomplish specific organizational goals or objectives; “doing the right thing.” (p. 69) Managerial efficiency - the ratio of output (results) to input (resources), or “doing things right.” (p. 69) Motivational climate - employee attitudes and morals that influence the performance level. (p. 69) Open-book-management - teach employees to understand accounting and financial statements and to use the knowledge in their work and planning. (p. 67) Professionalism - internalization of value system that is part of the concept of the profession. (p. 70)

Chapter 3 Changing the Culture .

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ADDITIONAL RESOURCES Readings: Berman, Karen and Joe Knight, Financial Intelligence: A Manager’s Guide to Knowing What the Numbers Really Mean (Boston: Harvard Business School Press, 2006.)

Burrough, Bryan and John Helyar, Barbarians at the Gate: The Fall of RJR Nabisco, (New York: Harper & Row, 1990.) Also, HBO movie with James Gamer.

Gittell, Jody Hoffer, The Southwest Airlines Way, (New York: McGraw Hill, 2003.)

Sisodia, Rajendra S., David B. Wolfe, Jagdish N. Sheth, Firms of Endearment: How World-Class Companies Profit from Passion and Purpose, (Upper Saddle River : Wharton School Publishing, 2007.)

Want, Jerome, Corporate Culture: Illuminating the Black Hole, (New York: St. Martin’s Press, 2007.)

Video: Barbarians at the Gate, a Rastar production, 1993. Based on the book Barbarians at the Gate: The Fall of RJR Nabisco.

Dances with Wolves, Tig Productions, 1990, Management (tribal council) considers what migration of whites will do to their society, culture, and way of life. As this is a long movie, you will likely want to show only a portion where the tribal council discusses how to deal with the impact of change and how they should handle it.

The Target Shoots First, 2000, 70 minutes. Documentary. Directed, written, produced, and filmed by the lead character. A recent 22 year old college graduate goes to work at Columbia House and video tapes his work and experiences. He is a production manager for the mail order record business at Columbia. Subjects include learning the culture, norms, and psychological contracts. At the time this was written, this film was shown on the Sundance TV channel but not available. It may have since become available. This is a good film to lead off the semester. The film is also appropriate for Chapters 1 and 16.

Wall Street, an Edward R. Pressman production; produced in association with American Entertainment Partners L.P.; directed by Oliver Stone; Twentieth Century Fox Film Corporation, 1987.

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Chapter 3 Changing the Culture .

SIMULATION PROCEDURES Simulation 3.1 (p. 74) Downsizing: A Consensus-Seeking Activity 1. Student premeeting preparation: a. Prepare and read the instructions. Prior to class, form into teams of six and select roles. Complete Step 1.

2. Suggestions: a. You may have students hand in a copy of their Individual Decision Worksheet. b. Step 6 has you leading a class discussion on the activity. But an alternative is to have a class member, ideally someone who was not on a team, lead the discussion.

3. Discussion points: a. Compare individual versus team criteria and decisions. b. Each student has a different set of values that influences their final rating system. c. Focus on issues of leadership, decision making, how each team sets differing norms, etc. d. Also look at the factors that form corporate culture.

4. Solutions: a. The important element here is the process used to develop ratings, more than the ratings themselves, because different criteria will provide different ratings. The suggested answers are based on ratings developed by groups of higher-level managers in a series of managerial seminars. b. The key is to identify the underlying values and assumptions that lead to the criteria selected, hence to corporate culture. In many companies, the employees may be given a choice between a layoff or taking a voluntary pay cut, and students often select this option. c. The rankings as developed by several executive groups follow (based on a maximum of 820). This is not a scientific survey and reflects a simple ranking by those taking the survey. d. The rankings follow at the end of this section.

5. Total time suggested: 75 minutes

Chapter 3 Changing the Culture .

45

You will need to adjust these times to fit your specific schedule and class plans.

Step 2 Step 3 Step 4 Step 5 Step 6

Minutes 35 5 5 15 15

Total

75

Notes

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Chapter 3 Changing the Culture .

Answers to Simulation 3.1 Ranking* Ranking Least likely to be riffed

Most likely to be riffed

Employee

1.

Carol

2.

Tony

3.

Sanjay

4.

Jackie

5.

Ken

6.

Dave

7.

Irv

8.

Frank

9.

Eduardo

10.

Gwen

*The rankings reflect the opinions of 820 managers from executive groups who participated in this simulation.

Chapter 3 Changing the Culture .

47

CASE TEACHING NOTES The Dim Lighting Co. (p. 81) I. Problems A. Macro 1. Will Dim Lighting be reactive?

2. Will Dim Lighting be proactive?

B. Micro 1. Will Jim West be influenced by thoughts of what a second year of unattained targets will do to his career in making this budget decision?

2. West feels threatened every time Spinks does not receive his demands or “wish list.”

II. Causes 1. Previous unprofitable year.

2. Spinks’ past history of leaving a company that “lacked creativity and innovation”.

III. Systems affected 1. Structural – the structure is a traditional functional structure. This may not encourage the development of new products and ideas.

2. Psychosocial – other departments feel threatened by Spinks. In addition, Jim West feels he is under pressure to improve the profit margins immediately.

3. Technical – both the production manager and Spinks want money to upgrade technical aspects of the company.

4. Managerial – West feels caught between being innovative and trying to improve the bottom line immediately.

5. Goals and values – corporate headquarters does not seem to value risk taking and moving into new projects. If their rejection of the lighting proposal is indicative of their decisions, the company as a whole may become entrenched in old technology.

IV. Alternatives 1. Before making a budget decision, West should contact corporate offices to see if additional funds are available for R&D. Spinks’ project would have a longterm effect on entire industry and possibly the parent company would contribute to the R&D project.

2. If additional funds are unavailable, the budget committee needs to make some compromises and come to a consensus-it should not be an all-or-nothing proposition. Funds should be allocated for both R&D and for upgrading essential equipment.

3. West should also ask the accountant, Preston, to make a three-tiered analysis of the project: (1) best-case scenario, (2) worst-case scenario, and (3) probable scenario.

4. West also needs to resolve his mixed feelings about the possibility of Spinks leaving. West needs to approach Spinks, praising him for what he has accomplished in the R&D department and asking him to help spread that high 48

Chapter 3 Changing the Culture .

degree of morale across the company. West needs to make Spinks an ally rather than a potential deserter.

V. Recommendations 1. First, try to obtain additional funds from parent company.

2. If additions are not available, obtain a consensus from the budget committee.

Compromises will have to be made on length of time for R&D projects, what equipment is needed, etc.

Chapter 3 Changing the Culture .

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STUDENT PREPARATIONS FOR THE NEXT CHAPTER 1. Read Chapter 4.

2. Read and complete Steps 1 through 4 of OD Skills Simulation 4.1.

3. Read and prepare Case: The Grayson Chemical Company.

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Chapter 3 Changing the Culture .

Chapter 4

Role and Style of the OD Practitioner

Learning Objectives 1. Define the role of an OD practitioner.

2. Identify your strengths and areas of improvement as a potential practitioner.

3. Experience and practice your own style of intervention and influence in a team.

Student Premeeting Preparation 1. Read Chapter 4.

2. Read and complete Steps 1 through 4 of OD Skills Simulation 4.1.

3. Read and prepare Case: The Grayson Chemical Company.

Instructor Preparation and Materials 1. Simulations: no special materials are required.

2. Stress to students that there are no right or wrong answers to the survey in Simulation 4.1. Become familiar with the scoring of the survey.

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51

LECTURE OUTLINE 1) Learning objectives. (pg. 87) a) Define the role of an OD practitioner. b) Identify your strengths and areas of improvement as a potential practitioner. c) Experience and practice your own style of intervention and influence in a team.

2) Haphazard versus planned change. (pg. 87) a) Change programs do not happen accidentally. i) They are initiated with a specific purpose and require leadership to function properly. ii) The OD practitioner must deal proactively with these changing competitive forces. iii) Everyone in the organization plays a crucial part in effective change programs. b) There are two types of change that may take place in an organization. i) One type is random or haphazard change.

(1) It is forced upon the organization by the external environment.

(2) It is not prepared for. ii) The second type of change results from deliberate attempts to modify organizational operations. c) This chapter discusses the second stage of an OD program, development of the practitioner-client relationship. (See Figure 4.1, Stage Two of Organization Development's Five Stages) 3) External and internal practitioners. (pg. 88) a) External practitioner. i) Someone not previously associated with the client system. ii) Advantages: (1) Sees things from a different viewpoint and from a position of objectivity.

(2) Does not depend upon the organization for raises, approval, or promotions. iii) Disadvantages: (1) Generally unfamiliar with the organization system.

(2) Unfamiliar with the culture, communication networks, and formal or informal power systems. b) Internal practitioner. i) Already a member of the organization who can be: (1) A top executive.

(2) An organization member who initiates change in his or her work group.

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Chapter 4 Role and Style of the OD Practitioner .

(3) A member of the human resources or organization development department. ii) Advantages: (1) Familiar with the organization’s culture and norms.

(2) Need not waste time becoming familiar with the system.

(3) Knows the power structure and who are the strategic people.

(4) Has a personal interest in seeing the organization succeed. iii) Disadvantages: (1) May have a lack of the specialized skills needed for OD. (2) Lack of objectivity.

(3) May be more likely to accept the organizational system as a given.

(4) Other employees may not understand the practitioner’s role.

(5) Other employees may be influenced by the practitioner’s previous work and relationships in the organization.

(6) May not have the necessary power and authority. c) The external-internal practitioner team.

(1) A team formed of an external practitioner working directly with an internal practitioner to initiate and facilitate change programs.

(2) Partners bring complementary resources to the team. (a) External practitioner brings expertise, objectivity, and new insights. (b) Internal practitioner brings detailed knowledge of organization issues and norms and an awareness of system strengths and weaknesses.

(3) Provides support to one another.

(4) Achieve greater continuity over the entire OD program. (a) The external practitioner will likely be available only a few days a month. (b) The internal practitioner is provides continuous contact to the organization.

(5) The team tends to combine the advantages of both external and internal practitioners while minimizing the disadvantages.

4) OD practitioner styles. (pg. 90) a) Internal or external practitioners have a variety of styles or approaches. b) One way to view styles is the degree of emphasis placed upon two dimensions: i) Effectiveness - the degree of emphasis upon goal accomplishment. ii) Morale - the degree of emphasis upon relationships and participant satisfaction. c) Based upon the two dimensions of accomplishing goals and member satisfaction, five different types of practitioner styles or roles can be identified. (see Figure 4.2, Practitioner Styles) i) Stabilizer style - maintains a low profile and it tries to survive by following directives of top management. ii) Cheerleader style - places an emphasis on member satisfaction and does not emphasize organization effectiveness. iii) Analyzer style - places emphasis on efficiency while giving little attention to satisfaction of members. Somewhat opposite of the cheerleader style.

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iv) Persuader style - seeks a compromise style between the cheerleader and the analyzer styles, but only achieves average performance on both styles. v) Pathfinder style - seeks both a high degree of organization efficiency and a high member satisfaction. This is the desired style for an OD practitioner. vi) The pathfinder practitioner focuses on six processes: (1) Communication.

(2) Member roles and functions in groups.

(3) Group problem-solving and decision-making.

(4) Group norms and growth.

(5) Leadership and authority.

(6) Intergroup cooperation and competition.

5) The intervention process. (pg. 92) a) Involves a collaborative relationship between a practitioner and a client system. b) The readiness of the organization for OD. i) The practitioner needs to wait until key personnel decide whether change is really needed. ii) Four questions for the practitioner to answer before going further: (1) Are the learning goals of OD appropriate?

(2) The cultural state of the client system ready for organization development?

(3) Are the key people involved?

(4) Members of the client system prepared and oriented to organization development? c) The intervention. i) Intervention refers to a coming between or among members or groups of an organization for the purpose of effecting change. ii) It refers to planned activities participated in by both the practitioner and the client. iii) Interventions occur throughout the OD program but here we are concerned with the practitioner’s initial contact with the client system. iv) The external practitioner generally intervenes through a top manager. d) Who is the client? i) Who the client is becomes more complex as the practitioner intervenes into more segments of the organization. ii) The client may be the organization, certain divisions, or an individual who contracted for the services. e) The OD practitioner role in the intervention.

(1) Operates on the belief that the team is the basic building block of an organization.

(2) Concerned with how processes such as communications and leadership occur in an organization.

(3) Operates on the notion that assisting the client instead of taking control will lead to a more lasting solution of the client’s problems.

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Chapter 4 Role and Style of the OD Practitioner .

f) OD practitioner skills and activities. i) One study found that the most practiced OD skill or activity was team development. (See Table 4.1, OD Practitioner Skills and Activities) ii) Six key skill areas that are critical to the success of the practitioner. (See Figure 4.3, Practitioner Skills Profile) (1) Leadership skills.

(2) Project management skills.

(3) Communication skills.

(4) Problem-solving skills.

(5) Interpersonal skills.

(6) Personal skills.

6) Forming the practitioner-client relationship. (pg. 96) a) The practitioner/client relationship is a system of interacting elements consisting of the practitioner, the client contact or sponsor, and the client target system. (See Figure 4.4, A System’s View of the Change Relationship) b) Initial perceptions. i) The initial intervention is similar to a reconnaissance on the part of both the client and practitioner where both are evaluating each other. ii) First impressions are important, as they tend to set the climate for the future. iii) Developing a relationship based on mutual trust and openness is important. c) Concepts of perception. (See Figure 4.6, Perception Formation and Its Effect on Relationships) i) Perception is the process whereby individuals give meaning to the environment by interpreting and organizing sensory impressions. ii) People behave on the basis of what is perceived versus what really is. iii) Perception.

(1) The process individuals use to interpret and organize sensory impressions.

(2) What one perceives can be substantially different from reality. iv) Selective perception.

(1) The selectivity of information that is perceived.

(2) The process in which people tend to ignore some information that is in conflict with their values and to accept other information that is in accord with their values. v) Closure.

(1) The tendency of the individual to fill in missing information in order to complete the perception.

(2) A person perceives more to the situation than is really there. vi) Dilemma interactions that occur include: (1) Questions about client’s definition of the problem.

(2) Client’s awareness of the need for change.

(3) Client’s unrealistic expectations.

(4) Client’s misuse of power.

(5) Value differences between client and practitioner. d) Practitioner style model. (See Figure 4.7, Practitioner Style Model)

Chapter 4 Role and Style of the OD Practitioner .

55

i)

The practitioner brings certain knowledge, skills, values, and experience to the situation. ii) The client system has its own subculture and level of readiness for change. iii) Together these determine the practitioner’s style and approaches. e) Developing a trust relationship. i) Openness and trust between practitioner and client is an essential aspect of the OD program. ii) Basic responses that a practitioner can use in the communication process.

(1) Questions.

(2) Applied expertise (advising).

(3) Reflection.

(4) Interpretation.

(5) Self-disclosure.

(6) Silence. f) Creating a climate for change. i) Practitioner should “practice what he or she preaches.” ii) Create climate of openness, authenticity, and trust. g) Practitioner-client relationship modes. (See Figure 4.8, Four Practitioner-Client Relationship Modes) i) Apathetic - keeps quiet about true ideas with practitioner, why bother because it won’t matter, skeptical about change. ii) Gamesmanship - keeps quiet about true ideas with practitioner, manipulates strategic factors to gain. iii) Charismatic - view of the changes are taken from cues from leaders; members view change as desirable if leaders approve; limited number of members share their own ideas. iv) Consensus - both client and practitioner share perceptions openly. The OD program is seen by the client as consistent with their way of operating.

Differences are worked through. The OD practitioner attempts to operate from this mode.

7) The formalization of operating ground rules. (pg. 102) a) Formalization of obligations in the form of a contract is usually advisable for an external practitioner. b) The internal practitioner does not need a contract, but operating ground rules should be formalized in some manner (memo, letter, etc.) c) The contract with the external practitioner normally specifies such items as: i) Point of contact. ii) Role of the practitioner. iii) Fees. iv) Schedule. v) Anticipated results. vi) Operating ground rules.

8) Warning signs in the practitioner-client relationship. (pg. 102) 56

Chapter 4 Role and Style of the OD Practitioner .

a) The level of commitment to change of the client. b) The degree of leverage or power to influence change. c) The client’s manipulative use of practitioner power.

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OD Application Bain & Co. (p. 93) SUMMARY Bain & Co., a major worldwide consulting firm, works collaboratively with clients to assist them in making decisions in areas including strategy, organization, and operations.

MAJOR POINTS • • • • • • • • •

Offers services to governments, business, and nonprofit organizations.

Bain is known as the creator of “relationship consulting.”

Bain consultants work directly with the chief executive.

Bain employees are secretive about their organization and their clients, and dedicate themselves to improving their customers’ competitive position.

Bain focuses on the total system.

Bain consultants work collaboratively with the client to study, define, and assist in the implementation of the solution.

As Bain’s consultants have experience working with a wide group of clients, they tend not to have tunnel vision.

Bain helps their clients to make the big decisions in areas of strategy, organization, operations, technology, and mergers and acquisitions.

Bain does not make the decisions, but their consultants serve as a catalyst to help in the process.

QUESTIONS 1. Do you agree with the relationship-consulting approach?

2. Visit Bain’s Web site (www.bain.com) and explore the firm’s current approaches to consulting.

3. Contrast the approach of a company trying to solve its own problems versus bringing in outside consultants.

Answer: Bain’s consultants operate from a larger frame of reference than do the managers from an organization. Though the consultants are careful not to disclose privileged information from other clients, they offer a perspective and point of view that comes from not being attached to a specific company or industry. A negative consequence is that the Bain consultant does not have the specific knowledge of a company.

4. What are the pros and cons of the external versus internal consultants?

Answer: External consultants may be more objective, but have less understanding of the organization. The external consultant is generally unfamiliar with the organization system, and unfamiliar with the culture, communication networks, and formal or informal power systems. Internal consultants are familiar with the organization’s culture and norms, knows the power structure and who are the strategic people, aware of problems, familiar with the organization (structure, power networks, nature of business, etc.), and has a personal interest 58

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in seeing the organization succeed. However, internal consultants may be afraid for their jobs and too close to situation.

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Review Questions 1. What are the pros and cons of external and internal practitioners?

Why is the team approach a viable alternative?

Answer: External consultants may be more objective, but have less understanding of the organization. The external consultant is generally unfamiliar with the organization system, and unfamiliar with the culture, communication networks, and formal or informal power systems. Internal consultants are familiar with the organization’s culture and norms, knows the power structure and who are the strategic people, aware of problems, familiar with the organization (structure, power networks, nature of business, etc.), and has a personal interest in seeing the organization succeed. However, internal consultants may be afraid for their jobs and too close to situation. The team approach allows for benefits of each and may help cancel out negatives. A team permits sharing of different points of view.

2. Compare and contrast the five basic practitioner styles.

Answer: Stabilizer: low emphasis on effectiveness, low on morale.

Cheerleader: high emphasis on morale, low on effectiveness.

Analyzer: high emphasis on effectiveness, low on morale.

Persuader: moderate emphasis on both effectiveness and morale.

Pathfinder: high emphasis on both effectiveness and morale.

3. Why is it important for an organization to be ready for an OD program?

Answer: Just because an organization is in need of an OD program does not mean that it is receptive to one. Without readiness, few changes can take place and be effective or lasting. Rather than impose organization development upon an organization, the practitioner needs to wait until key personnel decide whether change is really needed.

The motivation for a change program is then built in, not artificially contrived.

4. Identify basic problems in the practitioner-client relationship.

Answer: The client may not be committed to change.

Commitment may be based on words and not behaviors.

The client may not have the leverage or power to influence change.

The client may use the practitioner in a power struggle with other elements of the organization or as a means to gain information about others in the organization.

5. Explain the process of perceptions and how perceptions play a part in forming the relationship between the client and the OD practitioner.

Developing a practitioner-client relationship involves an interaction between the parties that includes initial perceptions and assessments by each of the other. Assessments involve the practitioner’s determination of whether or not to enter into a relationship. The practitioner’s assessment includes the degree of congruence between his or her values and those of the client system. In the initial meeting, the practitioner is trying to evaluate the organization’s readiness and commitment for change, while the client system is assessing the practitioner’s capabilities.

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KEY WORDS AND CONCEPTS Define and be able to use the following words and concepts: Analyzer style - high on effectiveness, low on morale. (p. 91) Apathetic mode - follows established routine and avoids responsibility. (p. 101) Charismatic mode - relies on leaders to determine if change is desirable. (p. 101) Cheerleader style - high on morale, low on effectiveness. (p. 91) Client sponsor - person or group within the organization that has requested the practitioner’s help and who interfaces with the practitioner. (p. 96) Client target system - organization needing help in change. (p. 97) Closure – tendency to fill in missing information to complete a perception (p. 97) Consensus mode - decisions are made through the sharing of viewpoints. (p. 101) Dilemma interactions - occur in assessment stage of intervention and result from questions from practitioner regarding the client’s problem definition, awareness of need for change, reduction of over-expectations, client’s misuse of power, and value differences. (p. 98) External-internal team - change agents from both outside and inside the organization. (p. 90) External practitioner - change agent from outside the organization. (p. 89) Gamesmanship mode - sees life as if playing a game and the main goal is to be a winner. (p. 101) Internal practitioner - change agent from within the organization. (p. 89) Interpretation - communication responses used by practitioner to explain the meaning of something in terms the client can understand. (p. 97) Intervention - refers to the entrance into the client system and includes a variety of roles and activities. (p. 93) Pathfinder style - high on effectiveness, high on morale. (p. 92) Perception - process that individuals use to give meaning to their environment by interpreting and organizing sensory impressions. (p. 97) Persuader style - moderate emphasis on both morale and effectiveness. (p. 91) Chapter 4 Role and Style of the OD Practitioner .

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Selective perception - selectivity of information that is perceived. People tend to ignore information that they do not want to hear and accept information that is in agreement with their values. (p. 97) Stabilizer style - low on effectiveness, low on morale. (p. 90)

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ADDITIONAL RESOURCES Readings: Schein, Edgar, Process Consultation: Its Role in Organization Development (Reading, Mass.: Addison-Wesley, 1988), p. 13.

Internet: The following are major management consulting firms with their Internet sites. Some have email services where they provide periodic updates.

McKinsey & Company www.mckinsey.com Boston Consulting Group www.bcg.com Bain & Co. www.bain.com You could assign each of these consulting firms to an individual or a team where they do additional research and report back to the class.

Video: Twelve O’clock High, 132 minutes. Twentieth Century Fox Film Corp. A tough general (Gregory Peck) takes over a bomber group in WW II. The bomber group is suffering from low morale and poor performance. He gets them into shape as a successful unit.

You could have the class assume Major Stovall (Dean Jagger) is an OD practitioner to the general and the bomber group. This film can also be used in Chapter 13.

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SIMULATION PROCEDURES Simulation 4.1 (p. 105) Practitioner Style Matrix 1. Student premeeting preparation: a. The survey should be completed prior to the class meeting to save class time. Taking the survey and then scoring it will take around 30 to 60 minutes. b. To avoid any misunderstanding in answering the questions, it may be helpful to briefly discuss the instructions during the previous class period.

2. Additional suggestions: a. We have found it helpful to put the survey in the perspective of being an additional piece of feedback that can be compared with feedback from other sources.

3. Discussion points: a. Importance of recognizing practitioner style. b. Importance of getting valid feedback on style. c. Did the survey results seem compatible with your own perceptions and feedback received from others? d. If the feedback is accepted as being reasonably valid, can a person, if they are not satisfied with the results, effectively make a change in their behavior?

4. Total time suggested: 30 to 45 minutes You will need to adjust these times to fit your specific schedule and class plans.

Minutes Steps 2 and 3 if needed 0 to 15 Step 5 30 Total 30 to 45

Notes

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Simulation 4.2 (p. 110) Conflict Styles 1. Student premeeting preparation: a. The story and Line A could be completed individually prior to the class meeting to save class time.

2. Suggestions: b. The team decision made in Step 2 should be conducted as a time pressure situation. Accordingly, you may find it necessary to alter the time allowed. c. For a large class, some of the steps that call for class discussion could be conducted within smaller groups; but it will likely prove beneficial for you to conduct some discussion with the entire class at the end of the simulation.

3. Discussion points: a. b. c. d.

Was there much disagreement within your group?

If there was, to what could it be attributed?

How did your group reach its decision (consensus, voting, etc.)?

To what extent do you feel that other members of your group support the group’s decision?

4. Total time suggested: 50 to 65 minutes You will need to adjust these times to fit your specific schedule and class plans.

Steps 1 and 2 Step 3 Step 4 Steps 5 and 6 Step 7 Step 8 Step 9

Minutes 5 10 to 15 5 to 10 5 5 15 5 to 10

Total

50 to 65

Notes

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Simulation 4.3 (p. 112) Perception 1. Student premeeting preparation: None.

2. Suggestions: a. This is a brief but effective simulation demonstrating the dynamics of perception. b. When having students count the number of “F’s,” try to keep the exercise moving quickly while letting the class have some fun. c. I take a quick survey of those counting exactly one F, then two, and ending with “Did anyone count more that six F’s.” I then ask them to count the number of F’s again. I usually have about 3 rounds of counting the F’s. With each round there are usually several students that change their count. On the last round I suggest for those not counting 6 F’s that they count the number of times the word “of” appears.

3. Discussion points: a. Perceptions. b. Do we sometimes overlook things that other people see? And how can this lead to disagreements? c. Is it possible to have confidence in what we see and hear but yet be flexible to other points of view?

4. Total time suggested: 20 minutes You will need to adjust these times to fit your specific schedule and class plans.

Steps 1 to 4 Step 5 Total

Minutes 10 10 20

Notes

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CASE TEACHING NOTES The Grayson Chemical Company (p. 113) I. Problems A. Macro 1. Grayson has become stagnant, failed to change, and is no longer competitive.

2. The current people at Grayson are not acceptable to change.

3. There is a culture of doing things by the book.

B. Micro 1. Incompetent managers promoted.

2. Board does not have a consensus of opinion.

II. Causes 1. Grayson has not been proactive with its environment.

2. Corporate culture is very resistant to change.

3. Board does not speak with one voice. So entire organization is somewhat disorganized in its operations—no clear direction or focus

III. Systems affected The entire organization is affected. The organization is still functioning; however, to be a healthy company and to grow, changes are needed.

1. Structural – with major changes, the structure could be radically altered.

2. Psychosocial – status quo and contentment seems to be prevalent among management.

3. Technical –there is evidence that managers are “fairly” competent technically, but this may not be enough to make the kind of changes that Grayson requires.

4. Managerial – the management currently seems to be comfortable in their positions and performance. The changes that Tom Baker may initiate would likely create turmoil in the management ranks.

5. Goals and values – the system seems to value putting in your time and you will get promoted. Excellence in performance is something not present at Grayson, but complacency seems to be prevalent.

IV. Alternatives 1. Maintain status quo—do nothing.

2. Develop a pathfinder style, involve board, and organization members in renewing the company.

3. Develop a persuader style and avoid “rocking the boat” by making gradual or slow changes.

V. Recommendations Develop pathfinder style, involve entire corporation in change process. Establish open communications with board and establish a consensus on what the board wants/expects/desires. Since incompetent managers have often been promoted, personnel changes should be made after thorough analysis of personnel.

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STUDENT PREPARATIONS FOR THE NEXT CHAPTER 1. Read Chapter 5.

2. Prepare for OD Skills Simulation 5.1. Form teams of six and select roles the preceding class. Complete Step 1.

3. Read and analyze Case: The Old Family Bank.

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Chapter 5

The Diagnostic Process

Learning Objectives 1. Identify system parameters and recognize the symptoms, problems, and causes of organizational ineffectiveness.

2. Recognize the various techniques for gathering information from client systems.

3. Describe the major diagnostic models and techniques used in OD programs.

4. Apply a systematic diagnosis to organizational situations.

Student Premeeting Preparation 1. Read Chapter 5.

2. Prepare for OD Skills Simulation 5.1. Prior to class, form teams of six and select roles. Complete Step 1.

3. Read and analyze Case: The Old Family Bank.

Instructor Preparation and Materials 1. Simulations: Duplicate answer to Simulation 5.1. The answer is located in the Simulation Procedures section of this manual.

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LECTURE OUTLINE 1) Learning objectives. (p. 116) a) Identify system parameters and recognize the symptoms, problems, and causes of organizational ineffectiveness. b) Recognize the various techniques for gathering information from client systems. c) Describe the major diagnostic models and techniques used in OD programs. d) Apply a systematic diagnosis to organizational situations.

2) Diagnosing problem areas. (pg. 116) a) Identification of areas for improvement and problems is an important element in developing a high-performance organization. b) Before implementing an OD program, it is important to assess the organization’s current quality or performance and to define the level of performance or quality it desires. c) Diagnosis provides information that allows a faster-reacting organization to emerge. d) Diagnosis rigorously analyzes the data on the structure, administration, interaction, procedures, interfaces, and other essential elements of the client system. e) Effective change must be based on a specific diagnosis of the problem. f) This chapter examines stage 3, the diagnostic process, of an OD program. (See Figure 5.1, Stage Three of Organization Development’s Five Stages)

3) What is diagnosis? (pg. 117) a) Diagnosis is a systematic approach to understanding and describing the present state of an organization. i) The purpose is to specify the nature of the problem requiring solution, to identify the underlying causal forces, and to provide a basis for selecting effective change strategies and techniques. ii) Diagnosis involves the systematic analysis of data regarding the organization structure and culture with the intention of discovering problems and areas for improvement. iii) Critical issues in diagnosis.

(1) Simplicity.

(2) Visibility.

(3) Involvement.

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(4) Primary factors.

(5) Measure what’s important.

(6) Sense of urgency. b) The process. i) Diagnosis is a cyclical process involving data gathering, interpretation, identification of problem areas, and potential action programs. (See Figure 5.2, The Diagnostic Process) (1) Step 1: Tentative problem areas identified.

(2) Step 2: Collect data.

(3) Step 3: Analyze data.

(4) Step 4: Feedback data.

(5) Step 5: Is more data needed?

(6) Step 6: Problems areas are identified.

(7) Step 7: Is the client motivated to work on the problem?

(8) Step 8: Diagnosis, target system identified, and work on the problem.

(9) Step 9: Monitor and assess results. c) The performance gap. i) The difference between what the organization could do and what the organization is actually doing. (See Figure 5.3, The Performance Gap) ii) Self-assessment gap analysis of four key areas.

(1) Organization’s strengths.

(2) What can be done to take advantage of strengths.

(3) Organization’s weaknesses.

(4) What can be done to alleviate weaknesses.

4) The data-collection process. (pg. 120) a) OD is a data-based change activity. b) Data is an aggregation of all signs, signals, clues, facts, statistics, opinions, assumptions, and speculations, including items that are accurate and inaccurate, relevant and irrelevant c) Information is data that have form and structure. d) Data collection consists of three stages: i) Definition of objectives. ii) Selection of factors. iii) Selection of data-gathering method. e) The definition of objectives. i) Define the objectives of the change program. ii) Identify preliminary diagnosis and what further information is required. f) The selection of key factors. i) Identify the central variables involved in the situation. ii) May be necessary to increase the range of depth of data beyond what is readily available.

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g) The selection of data-gathering method. i) Selection of one or more methods of gathering data.

(1) Because there is no one best method, a variety of methods may be used.

(2) The nature of the problem helps to determine the method. ii) Types of methods include: (1) Secondary sources. (a) Organization and industry data already available.

(2) Employee surveys and questionnaires. (a) Especially useful when a large number of people are involved. (b) However, the data may lack “richness.”

(3) Other types of instrument: (a) Sociogram. (See Figure 5.5, Example of a Sociogram) (i) A sociogram is a visual method of recording and analyzing the choices or preferences within a group. (ii) Each member of the group is represented by a circle. (iii) Communication between individuals is represented by arrows indicating the direction of choice. (iv) Stars - the highly chosen individuals. (v) Isolates - those with few or no choices. (vi) Mutual choice - certain individuals who choose one another. (vii) One-way choice - when an individual chooses another but is not chosen in return. (viii) Clique - when three or more persons within a larger group select one another (mutual choices). (b) Thematic apperception test (TAT), and collages.

(4) Direct observation. (a) Observing how people go about their tasks, norms, behaviors. (b) May use a sociogram to record observations.

(5) Interviews. (a) Is one of the most widely used methods of gathering data. (b) It is direct, personal and flexible. (c) Directed interview. (i) Open-ended questions. (ii) Closed questions. (d) Nondirected interview. (i) Direction chosen by respondent. (ii) Questions, if any, are open ended.

5) The implementation of data collection. (pg. 126) a) Decide from whom data will be obtained. b) Select an appropriate technique to gather data. c) Implement data-collection program. The use of an outside collection agent is recommended so the respondents will feel more secure that candid answers will not be used again them. d) The analysis of data.

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i)

The techniques used to analyze the data will be dictated by the method used to gather the data. ii) The type of analysis is decided prior to data collection. e) Guidelines for evaluating the effectiveness of data collection. i) The validity of the data. ii) The time to collect data. iii) The cost of data collection. iv) The organization culture and norms. v) The Hawthorne effect in data collecting.

6) Diagnostic models. (pg. 127) a) Diagnostic models may be used to analyze the structure, culture, and behavior of the organization. b) Models help provide a conceptual framework to understand the organization. c) Steps in implementation of model: i) Begins with study of degree of differentiation between units. ii) Then analyzes integration and cooperation required between units. iii) This provides a basis for structural and cultural changes in departments. d) The differentiation-integration model. i) Used for interdepartmental issues. ii) Examines four characteristics of departments. (See Table 5.1, Example of Survey Results Using the Differentiation and Integration Model) (1) Degree of departmental structure.

(2) Time orientation of members.

(3) Interpersonal orientation of members toward others.

(4) Organization members’ orientation toward goals. iii) The model’s objective is to help departments achieve integration. e) The sociotechnical-systems model. i) Two systems contained in each organization: (1) Social system, which consists of interpersonal relationships.

(2) Technical system, which consists of task, tools, and activities of organization. ii) The systems are interrelated. The diagnosis determines how the systems are interrelated and what type of feedback is required between the subsystems. f) The force-field analysis model. (See Figure 5.6 Force-Field Analysis Model and Figure 5.7, Example of the Use of Force-Field Analysis) i) Organizational behavior is a balance between forces working in opposite directions. ii) Restraining forces act to keep organization stable. iii) Driving forces act to change organization. iv) When two forces are equal, the organization is in a quasi-stationary state of equilibrium. v) Analysis of forces determines which force to increase or decrease to bring Chapter 5 The Diagnostic Process .

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about change.

7) Warning signs in the diagnosis process. (pg. 130) a) Confidentiality of the data is paramount. b) The over-diagnosis. i) The diagnosis drags on and so many problems are identified that the diagnosis becomes a ritual of continual analysis. c) The crisis diagnosis. i) Attending only to the immediate, short-term crisis. ii) Important but less visible problems are missed. d) The threatening or overwhelming diagnosis. i) The client is confronted by problems to the extent that the relationship with the practitioner is damaged. ii) It is difficult for the client to accept so much information and deal with it in any meaningful way. e) The practitioner’s favorite diagnosis. i) The practitioner imposes a special or favorite diagnosis regardless of the problem. ii) The diagnosis may be made to fit the practitioner’s own special skill areas. f) The diagnosis of symptom. i) Focuses on symptoms of the problems rather than on the underlying problems.

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OD Applications The Performance Gap at eBAY (p. 120) SUMMARY eBay’s successful model of offering on-line auctions has become outdated. An analysis of customer data indicated that Internet buyers are moving to fixed-priced Internet stores such as Amazon. eBay now concentrates on fixed prices and is trying to specialize in product areas such as collectables and overstocked items.

MAJOR POINTS • • • • • • • • •

eBay’s business model was originally the auction of merchandise on the Internet. eBay has no warehouses and does not take possession of the merchandise.

Revenue comes from listing fees, advertising, and its banking system (PayPal). eBay believes that if you understand the data, you can decide where to spend money, where people are needed, and which projects are working and failing.

Understanding the data is the way eBay learns about its customers.

Analysis of data showed that eBay’s traditional strategy of on-line auctions had become obsolete.

Fixed-priced sales were accounting for about half of all transactions. eBay is now focusing on fixed price sales in collectables, overstocked items, and last years models.

Though the company has attempted to change, the business continues to fall short of expectations.

QUESTIONS 1. What was the performance gap at eBay? Answer: eBay was assuming that their model of on-line auctions would continue to be popular with customers. However, Internet commerce matured and customers were less willing to spend the time monitoring auctions to purchase an item. eBay had been gathering large quantities of customer data but the analysis did not show changes in customer behavior until revenue had declined significantly.

2. What are some advantages and disadvantages of gathering large quantities of data?

Answer: Advantages include being capable of analyzing and identifying potential problem areas. Having collected detail data over years can reveal trend lines that otherwise might escape managers’ attention. This allows both problems and opportunities to be quickly identified. Disadvantages of collecting large quantities of data are that sophisticated systems need to be designed to analyze the data. Without proper analysis, managers can be overwhelmed with the volume of data and fail to take action.

3. Visit the eBay Web site at http://www.ebay.com/ to further your understanding of its business model.

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Data Collection and Diagnosis at McDonald’s (p. 125) SUMMARY Though for many years McDonald’s had been a successful restaurant, by the early 2000s they realized that they had a problem. However, a lack of customer data prevented the problem from being identified and solutions developed. Processes were developed to collect data over a long-term basis so that the data could be analyzed to solve problems.

MAJOR POINTS • • • • • • •

In 2002 McDonald’s top managers identified that they had a problem based on earnings and profitability.

An initial reaction might have been to build more stores, but managers realized that they did not have enough data to identify the problems.

Beginning in 2003 McDonald’s adopted a system of systematically gathering and analyzing customer data.

Data was obtained from trained “mystery diners” who graded stores in such things as service, food temperature, and cleanliness.

Simultaneously, McDonald’s conducted in-depth interviews with repeat customers.

Analysis of the data showed that the solution was in delivering a better experience for the customers rather than more restaurants.

Coffee stations with Starbucks style baristas are also part of the solution as the stations increase traffic at existing stores rather than McDonald’s opening more stores.

QUESTIONS 1. Research McDonald’s and evaluate their strategy of separate beverage stations.

2. In lieu of in-depth interviews, what are some other methods McDonald’s could have used to gather data? What are some advantages and disadvantages of McDonald’s method and your suggestions?

Answer: Other methods include survey cards completed by diners, telephone interviews, and on-the-street interviews. The data obtained from “mystery diners” could be compared to similar analysis of competing restaurants (Burger King, Taco Bell.) An advantage of the in-depth interviews is that the data has depth and richness. A disadvantage of interviewing repeat customers is that it does not include data from those who choose not to dine at McDonald’s. This could seriously compromise the validity of the data since McDonald’s is trying to expand their customer base.

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Review Questions 1. Describe the use of performance-gap analysis.

Answer: A method in the diagnostic process to determine the difference between what the organization could do by virtue of its opportunities and what it actually does. Data are collected on the actual state of the organization on a varying set of dimensions and also on the ideal or desired state. The difference is the gap which may be the result of ineffective performance from within the organization or because of competitive changes.

A performance gap may also occur when the organization fails to adapt to changes in its external environment.

2. Compare and contrast the interview and survey methods of data collection.

Answer: Interviews are more personal, surveys are less so; interviews allow for more feedback, surveys more objective. Surveys are used to gather a large number of quantitative responses. The data generated from surveys tend to be impersonal and anonymous and often lack feeling and richness, but this method easily lends itself to quantitative analysis. The survey may lead the practitioner to problem areas which can be investigated more deeply through an interview. Interviews are more direct, personal, and flexible than surveys and are very well suited for studies of interaction and behavior.

Interviews are flexible and can be used in many different situations. Interviewing also provides two-way communication.

3. List some possible types of organization data that you might find in your own organization or college that could be used in planning an OD program.

Answer: Pay policies, promotion possibilities, work environment, group interactions.

There are many possible correct answers depending on the organization.

4. Explain the difference between symptoms and causes.

Answer: The symptom is the manifestation of some underlying problem. Cause is the reason for the problem. The client is often aware of the evidence of the symptoms of a problem, such as declining sales or high turnover. Through data collection and analysis the practitioner tries to identify what factors are causing the problem, and therefore what needs to be changed to fix it.

5. Identify and give examples of the force-field analysis model.

Answer: It is a diagnostic technique that views organization behavior as a balance of forces that push for and restrain change. Restraining forces act on the organization to keep it stable and driving forces put pressure on the organization to change. If the forces for change and the forces against change are equal, the result is equilibrium and the organization remains stable. Change takes place when there is an imbalance between the two types forces and continues until the opposing forces are brought back into equilibrium.

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KEY WORDS AND CONCEPTS Define and be able to use the following words and concepts: Clique - in a sociogram, when three or more persons within a larger group select one another as a subgroup. (p. 124) Closed questions - specific questions that can normally be answered either yes or no. (p.

125) Data - unstructured, unformed facts. (p. 121) Diagnosis - analysis of problem(s). (p. 118) Diagnostic models - provide a conceptual framework to understand the organization, its many components, and how well they function as a system. (p. 127) Differentiation and integration model - a diagnostic model that stresses the importance of a sound analytical diagnosis as the basis for planned change in organizations. (p. 127) Directed interview - interview in which only specific information is sought. (p. 125) Driving forces - opposite forces to restraining forces. Driving forces put pressure on the organization to change. (p. 129) Equilibrium – a term used in the force-field analysis model that refers to the restraining forces and driving forces for change being equal or in balance. (p. 129) Force-field analysis model - this model weighs forces for and against change.

Restraining forces keep the organization stable and driving forces put pressure on the organization for change. (p. 129) Hawthorne effect - the effect of the observer on the subject. The act of investigating or observing may influence the behavior of those being investigated. (p. 127) Information - data that has structure and form. (p. 121) Isolates – in a sociogram, it is those individuals within a group who are only chosen rarely by others. (p. 124) Mutual choice - in a sociogram, when certain individuals within a larger group choose one another. (p. 124) Nondirected interview - the interview direction is chosen by the respondent. There is little direction by the interviewer. (p. 125) One-way choice - in a sociogram, when an individual in a group chooses another but is not chosen in return. (p. 124) 78

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Open-ended questions - this type of question allows the respondent to be free and unrestrained and to direct the interview. (p. 125) Performance gap - this is the difference between the desired and the actual performance of an organization. (p. 118) Questionnaires - this method of gathering data is normally used for a large number of responses. Although this method is impersonal, it lends itself to quantitative analysis. (p.

123) Restraining forces - these forces act to keep an organization stable. (p. 129) Sociogram - this is a diagram of relationships and interactions within a group. (p. 123) Sociometric approach – a technique for collecting quantitative data on work groups.

The data enable the investigator to diagram the structure and patterns of group interaction. The result of the approach is a sociogram. (p. 123) Sociotechnical-systems model - an organization has two systems that are interrelated— the social system and the technological system. This model determines how these systems interrelate and the feedback (or lack of it) between the subsystems. (p. 129) Stars – in a sociogram, it is those highly chosen individuals. (p. 123) Surveys - this method of gathering data is normally used for a large number of responses.

Although this method is impersonal, it lends itself to quantitative analysis. (p. 123)

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ADDITIONAL RESOURCES Readings: Bensoussan, Babette E. and Craig S. Fleisher, Analysis Without Paralysis, 10 Tools to Make Better Strategic Decisions, (Upper Saddle River, New Jersey: Pearson Education, Inc., 2008.

Lawrence, Paul and Jay Lorsch, Developing Organizations: Diagnosis and Action (Reading, Mass.: Addison-Wesley, 1969.) This is one of the titles in the Addison-Wesley series on organization development. The series is considered a classic and ole copies might be found on eBay or Amazon.

Nadler, David A., Feedback and Organization Development: Using Data-Based Methods, (Reading, MA, Addison-Wesley Pub. Co., 1977). This is another one of the Addison-Wesley series on OD.

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SIMULATION PROCEDURES Simulation 5.1 (p. 134) The Acquisition Decision 1. Student premeeting preparation: a. Form into teams and make role assignments in the preceding class period. b. Read S.O.S. Briefing Sheet and their role descriptions out of class. c. Stress that students do not read role descriptions for others.

2. Suggestion: a. Remind the observer not to take a part in the decision process, but he/she is a “process observer” and will provide feedback in Step 3.

3. Discussion points: a. The Decision Process—How was the decision made? During Steps 3 and 4, participants are usually more interested in the answers. Try to minimize this discussion and emphasize the process that was used to make the decision and how the process might have assisted or hindered in arriving at the answer. b. How effective was each team? c. Information Sharing—Was all information shared within the team? In diagnosis, determining what information is needed is a difficult task.

Getting the information is also a different and difficult task. d. Leadership Items—Was one individual dominant? When groups are involved, issues of leadership and influence are another barrier to effective decision making. A few members may dominate the group, and consequently, the full utilization of resources is often not accomplished.

4. Solution: One possible answer is Altitude company. It is the only company that fits all the requirements. The answer sheet follows.

5. Total time suggested: 65 minutes You will need to adjust these times to fit your specific schedule and class plans.

Step 2 Step 3 Step 4

Minutes 30 15 20

Total

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Notes

Answer: In addition to Table 5.2, Acquisition Alternative Summary Sheet in the textbook, the following table has additional columns that are highlighted. The data for the columns came from the information in the role descriptions. The Altitude company tends to meet more of the requirements found in the role descriptions though teams may easily come to a different conclusion based on the reasoning given by their members.

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CASE TEACHING NOTES The Old Family Bank (p. 141) I. Problems A. Macro 1. The lack of loyalty to the entire bank could affect the effectiveness (and profitability) of the bank.

2. The bank may have a poor process for setting pay policies.

B. Micro 1. Though the personnel in the computer services department have a strong team, they are not loyal to the larger organization.

2. Computer services personnel believe that management does not appreciate them, their skills, and contributions.

3. Computer services personnel may be underpaid when compared to similar workers in other companies.

II. Causes 1. The skilled workers in the computer services department do not recognize all of the factors that may affect pay and rewards.

2. The computer services personnel possibly have access to more company-wide information by virtue of the type of work their department does than do personnel in other departments. Consequently, they get a portion of the data without understanding how managers make decisions based upon that data.

III. Systems affected The attitudes of the computer services personnel to the bank likely affect the entire bank’s operations.

IV. Alternatives 1. H. Day gathers more data to confirm/disprove initial diagnosis.

2. Use a diagnosis model such as force-field analysis to understand better the problem. Working through the model may bring to light ways to change the situation in the computer services department.

3. Day checks on regional employment data to determine if computer services personnel are being paid competitively with similar workers in other companies.

Adjust pay if warranted by the data.

4. Meet with the department and explain the bank’s procedures and rationale for how pay levels are set.

V. Recommendations All of the alternatives listed above can be undertaken by Day.

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STUDENT PREPARATIONS FOR THE NEXT CHAPTER 1. Read Chapter 6.

2. Prepare for OD Skills Simulation 6.1. Complete Step 1 and read the Company Situation.

3. Read and analyze Case: The Hexadecimal Company.

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Chapter 6

Overcoming Resistance to Change

Learning Objectives 1. Identify the forces within individuals and organizations that cause resistance to change programs.

2. Recognize strategies that can increase the motivation to change.

3. Diagnose the forces driving and resisting organization change.

4. Experience reactions to a change situation.

Student Premeeting Preparation 1. Read Chapter 6.

2. Prepare for OD Skills Simulation 6.1. Complete Step 1 and read the Company Situation.

3. Read and analyze Case: The Hexadecimal Company.

Instructor Preparation and Materials 1. Simulations: Duplicate answer to Simulation 6.1. The answer is located in the Simulation Procedures section of this manual.

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LECTURE OUTLINE 1) Learning objectives. (p. 144) a) Identify the forces within individuals and organizations that cause resistance to change programs. b) Recognize strategies that can increase the motivation to change. c) Diagnose the forces driving and resisting organization change. d) Experience reactions to a change situation.

2) Change and reinvent. (p. 144) a) Faced with continuing economic pressures and increasing competition, many organizations are being forced to radically change and reinvent their processes. b) Organizations face a major challenge in managing change effectively. c) Organizations must have the capacity to adapt quickly in order to survive. d) People are the focus of some of the most serious challenges. e) When the changes are on a large scale and involve many individuals and subunits, there are often significant problems and challenges. f) On a personal level, change represents the alteration of: i) Set patterns of behavior. ii) Defined relationships with others. iii) Work procedures, and job skills. g) On an organizational level, change means that the following will no longer be the same: i) Policies. ii) Procedures. iii) Organization structures. iv) Manufacturing processes. v) Work flows.

3) The life cycle of resistance to change. (p. 145) a) The response to change tends to move through a life cycle. b) Phase 1, Change Introduced. i) There are only a few people who see the need for change and take the reform seriously. ii) Resistance appears massive.

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c) Phase 2, Forces Identified. i) The forces for and against the change become identifiable. ii) The change is more thoroughly understood. iii) The novelty and strangeness of the change tends to disappear. d) Phase 3, Direct Conflict. i) There is a direct conflict and a showdown between the forces pro and con. ii) This phase will probably mean life or death to the change effort. e) Phase 4, Residual Resistance. i) If the supporters of the change are in power, the remaining resistance is seen as stubborn and a nuisance. ii) There is still a possibility that the resisters will mobilize enough support to shift the balance of power. f) Phase 5, Change Established. i) The resisters to the change are as few and as alienated as were the advocates in the first phase.

4) Leading change. (p. 146) a) The major factors affecting the success of change include advocates of change, degree of change, time frame, impact on culture, and evaluation of change.(See Figure 6.1, Change Factors) b) Advocates of change. i) The person spearheading a change program is often the most important force for change. ii) An internal or external OD practitioner may be brought in to assist in the change project. c) Degree of change. i) Is the change minor or major? ii) The greater the degree of change, the more difficult it is to implement successfully. d) Time frame. i) Usually, the more gradual the change and the longer the time frame, the greater the chance of success. ii) Some organizations have become so ineffective that any chance they have for survival depends on radical change introduced swiftly. e) Impact on culture. i) The greater the impact on the existing culture, the greater the amount of resistance that is likely to emerge and the more difficult it will be to implement the change. f) Evaluation on culture. i) Standards of performance are developed to measure the degree of change and Chapter 6 Overcoming Resistance to Change .

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its impact on the organization.

5) A change model. (p. 148) a) Two major considerations in organizational change are the degree of change and the impact on the organization’s culture. (See Figure 6.2, Change Model) b) Quadrant 1: Minor change, low impact on culture. i) When the change is minor and the impact on the culture is small, resistance will be at the lowest level and success will be most probable. c) Quadrant 2: Minor change, high impact on culture. i) When the change is minor but the impact on the culture is high, some resistance can be expected. d) Quadrant 3: Major change, low impact on culture. i) When the change is major, but the impact on existing culture is minor, some resistance is likely. ii) Good management can probably overcome it. e) Quadrant 4: Major change, high impact on culture. i) When the change is large and the impact on the existing culture is high, the greatest resistance can be predicted. ii) The probability of success is low.

6) Driving forces toward acceptance of a change program. (p. 149) a) Driving forces are anything that increases the inclination of an organization to implement a proposed change program. b) Dissatisfaction with the present situation. i) The more intense the dissatisfaction with the present situation, the greater the motivation to change. ii) Some members are aware of need for improvement; not satisfied to be average. iii) In other organizations, its members are not aware of the need to change. iv) Stockholders may be dissatisfied with current performance. c) External pressures toward change. i) As an organization is part of a larger external environment, external pressures sometimes will cause the organization to change. ii) The organization may need to adopt new technologies to remain competitive, or may be required by law to make a change. d) Momentum toward change. i) When a change program is under way, certain forces tend to push it along. ii) Those involved in orchestrating the change will probably become committed to the program. iii) When an organization has committed money to start a change program, it likely will want to continue in order to get its money’s worth.

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iv) Once change has begun in one part of an organization, it may set off a chain reaction in other parts of the organization. e) Motivation by management. i) The manager or advocate of change becomes a motivating force. ii) Top managements’ words of encouragement and behavior can motivate change.

7) Restraining forces blocking implementation of change programs. (p.

151) a) Implementation of any OD change program needs to take account of the restraining forces of change. b) Uncertainty regarding change: “The Comfort Zone.” i) Past ways of doing things are well known and predictable. ii) Unwillingness to give up familiar tasks or relationships may cause resistance. c) Fear of the unknown. i) Lack of information or understanding causes rumor, speculation, and insecurity. d) Disruption of routine. i) Human behavior is governed largely by habit and routine. ii) There is little incentive to change when the old way seems to work. e) Loss of benefits: “what’s in it for me?” i) People may interpret the change as a loss of individual security. ii) People affected by a change tend to resist unless they see how they will benefit. f) Threat to security. i) There may be concern about vested interests, such as loss of the job or reduced wages or benefits. ii) People tend to resist change that threatens the security of their environment. g) Threat to position power. i) Change that causes a manager or group to “lose face” will be resisted. ii) To lower the status or prestige of the individual or group will probably meet with resistance even though the organization as a whole may benefit. h) Redistribution of power. i) If there is reorganization, it is implicit that there will be a redistribution of power and influence. ii) Individuals or groups who see a change as lessening their influence will strongly resist it. i)

Disturb existing social networks. i) Friendships, social cliques, or informal teams may be threatened by changes.

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j)

Conformity to norms and culture. i) Norms cannot easily be changed because of their strong group support.

k) Driving forces and restraining forces act in tandem. i) Effective change programs try to increase the driving forces toward acceptance of change and simultaneously to decrease the restraining forces blocking the change. ii) The force-field analysis model (discussed in Chapter 5) provides a useful way to view the driving and restraining forces.

8) Strategies to increase motivation. (p. 153) a) An OD program is more likely to be successful if resistance to change can be minimized. i) Resistance to change can be predicted. ii) Resistance cannot be repressed effectively in the long run. iii) The objective is to turn the energies generated by the anti-change resistance to good advantage. iv) A manager can minimize the threat that underlies resistance. v) Listening to comments and criticisms provides information that can be used to adjust the tempo and extent of the change program. vi) Resistance can provide functional conflict that contributes to the quality of the change program. vii) Absence of resistance may indicate a degree of disengagement and an indication of future problems. b) Climate conducive to change. i) Climate and culture of organizations are decisive in sustaining organizational change. ii) Attitudes of respect and understanding will help to break a cycle of reciprocal threat and aggressiveness. c) Clearly articulated vision. i) Create a vision for a team, division, and organization that describes a desired future state ii) A vision helps to give direction to a change program and to provide a bench mark to evaluate the success of the change. d) Effective communications. i) Communication can minimize the uncertainty and fear of the unknown associated with change. ii) Lack of reliable information leads to rumors and uncertainty. iii) Information concerning the “what and why” of the change program should be provided to all organization members. iv) Open-book management is one way to educate and inform organization members.

(1) It opens the books to employees.

(2) They can see the company’s financial records, expenses, and sources of profit.

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should be emphasized. v) Most managers underestimate the amount of communication needed, so it is better to use “overkill” than to understate the situation. e) Leadership of managers. i) Leadership of key managers is critical to the success of a change program. ii) Leaders with loyal followers set high standards and strive to attain exceptional results. iii) Through such methods as empowering employees, the leader can accomplish things that he or she could not accomplish if acting alone. f) Participation of members. i) The participation of employees in matters that concern them increases the probability that they will find the program acceptable. ii) If there is a union, it needs to be involved and supportive of the change program. g) Reward systems. i) Reinforcing the change by providing rewards and support for those involved can increase support for the change. ii) Rewards include promotions, financial, and public recognition. iii) Financial rewards include profit-sharing, knowledge-based pay, gain sharing, and stock-ownership plans. h) Negotiation, agreement, and politics. i) Negotiate with potential resisters. ii) Accommodation with the positions of resistors may be possible and could improve the change program. iii) Build a coalition of people who hold divergent points of view. iv) Compromise, reciprocity, and trade-offs may be necessary in building political alliances. i)

Power strategies. i) OD practitioners have historically been reluctant to deal with the use of power in organizations. ii) But most organizations operate within a power structure and it may be necessary to use it to persuade members of an OD program’s worthiness. iii) Though not without risks, dismissal or transfer may be necessary with some employees in order to bring about change. iv) Coercion may make support for future change programs difficult to obtain.

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OD Applications The Five Phases of Resistance to Change (p. 146) SUMMARY The response to change tends to move through a life cycle that typically consists of five phases. The environmental movement over the past forty years illustrates these phases.

MAJOR POINTS • • • • •

PHASE 1 – Change Introduced. The environmental movement began to grow in the 1970s though the forces for change were small.

PHASE 2 – Forces Identified. By the 1980s the forces for and against the change became organized and identifiable.

PHASE 3 – Direct Conflict. The Clean Air Act of 1990 was an event that brought the two opposing groups into direct confrontation.

PHASE 4 – Residual Resistance. Though opposing groups continued to have conflicts through the first decade of the 2000s, the resistance became less intense as world opinion coalesced around environmental responsibility.

PHASE 5 – Change Established. Much of the world now sees environmental responsible behavior and energy conservation as a necessity. The challenge is how to implement the changes.

QUESTIONS 1. Do you agree that the environmental movement has moved into the fifth phase?

2. Where do you see the environmental movement going? Stronger or weaker?

3. Will the environmental movement be worldwide or regional? Will developed nations have different responsibilities than developing nations?

4. Will there be lasting public and corporate support?

The World of Business (p. 150) SUMMARY Globalization has and will continue to have a significant impact on businesses, competition, governments, workers, societies, and cultures. Learning as much as possible about globalization can help a business deal with the changes that will undoubtedly result from increased globalization.

MAJOR POINTS •

Globalization has been occurring for hundreds of years but the within the last 30 years globalization has experienced exponential growth.

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• • • • •

Reasons for growth in globalization include improvement in communication and transportation, global banking system, surpluses in capital of some countries, and lowering of trade barriers.

The 1,000 largest multinational companies (MNCs) account for 80 percent of the world’s industrial production.

MNCs are base all over the world and are emerging in larger numbers in developing countries. (See Table 6.1, Fortune Top Global 500 Companies) MNCs help create markets by employing workers worldwide.

The trend has been for MNCs to blend into the local landscape by adapting to the local culture.

QUESTIONS 1. Why is it important for a business to understand globalization?

Answer: A business, no matter its size, is going to be increasingly affected by globalization in some manner. To survive in a world wide market place, it is prudent upon businesses to understand the challenges and potentials of globalization.

2. Do you think globalization is something that a business of any size can ignore? Support your position.

3. Research Fortune’s “Global 500” list of companies to see how trend lines are developing. The web site is at http://money.cnn.com/magazines and search for “global 500 list” or something similar.

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Review Questions 1. Trace the life cycle of change in an organization or an event occurring in society (suggestions are smoking in public places, energy conservation, or driving smaller automobiles).

Answer: The answer will vary depending on the example chosen but it will generally follow the five phases discussed in the text.

2. What are major forces in the change process?

Answer: Forces can be driving and restraining. Driving forces are anything that increases the inclination of the client system to implement the proposed change program.

Restraining forces hinder the development of the change program.

3. What strategies might be used in gaining acceptance for an OD program?

Answer: A systematic plan, inclusion of members, education and communication of proposed changes, managers creating a vision of the organization, recognition of resistance to change, providing support and a reward system for those involved, leadership of key managers, negotiation, explicit and implicit coercion, and power.

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KEY WORDS AND CONCEPTS Define and be able to use the following words and concepts: Driving forces - anything that increases the inclination of the client system to implement the proposed change program. (p. 149) Employee stock ownership plan (ESOP) - use various types of formulas to grant stock or stock options to a broad section of employees. (p. 157) Gain sharing - a reward system used as a basis for calculating pay that recognizes the value of a specific group based on measurable characteristics. (p. 157) Knowledge-based pay - a reward system based on the knowledge or skills a worker has.

Sometimes called skill based pay. (p. 157) Open-book management - opens the books to employees to see the company’s financial records, expenses, and sources of profit. A major benefit is that employees are able to analyze and understand the problems for themselves. (p. 156) Profit-sharing - uses the performance of the business to calculate employee pay. (p. 157) Restraining forces - forces that block the implementation of a change program. (p. 151) Vision - describes a desired future state for an organization and it can provide the members with a mental image of the future. (p. 154)

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ADDITIONAL RESOURCES Readings: Cash, L. and J. French Jr., “Overcoming Resistance to Change,” Human Relations, I (New York: Sage Publications, 1947).

Ford Jeffrey D. and Laurie W. Ford, “Decoding Resistance to Change,” Harvard Business Review, April 2009, p. 99-103; Jeffrey D. Ford, Laurie W. Ford, and Angelo D'Amelio, “Resistance to Change: The Rest of the Story,” Academy of Management Review, April 2008, pp. 362-377 Friedman, Thomas L., The World Is Flat, A Brief History of the Twenty-First Century, (New York: Farrar, Straus and Giroux, 2007.)

Greiner, Larry E. and Virginia E. Schein, Power and Organization Development, Mobilizing Power to Implement Change, (Reading, Mass.: Addison-Wesley Publishing Company, 1988.)

Kotter, John P., “Leading Change, Why Transformation Efforts Fail,” Harvard Business Review, Jan. 2007, pp. 96-103.

Schneider, Susan C. and Jean-Jouis Barsoux, Managing Across Cultures, (New York: Prentice Hall, 2003.)

Video: The Express. (Universal, 2008.) This is the true story of Ernie Davis, the first AfricanAmerican to win the Heisman Trophy. It is a good movie to trace the “life cycle of change” through the plot of the film and the characters. The movie takes place during the early 1960’s at a time when the civil rights movement was dividing America. The change in attitudes and values of Coach Ben Schwartswalder is particularly interesting to focus upon. Ernie Davis also serves as a good example of a change agent.

Stand and Deliver. (Warner Home Video-VHS, 1988.) A high school teacher in a Hispanic community brings about change in the school and education system by teaching calculus to students many, including the students, considered incapable. Based on a true story. Looks at issues of motivation, negotiation, creating of a vision, facilitation, rewards, coercion, and power. Presents an excellent view of the five phases of resistance to change. This was a PBS-produced film that received Academy Award Nominations.

One Flew Over the Cuckoo’s Nest. (Warner Home Video-DVD and Republic Pictures Home Video-VHS, 1975) A man is sent to a mental hospital and runs into conflict with the staff. Issues include an external person (McMurphy played by Jack Nicholson) bringing change to an organization with well-established values and culture. Won Academy Awards for best picture, director, actor, actress, and screenplay. The language is “colorful” and my suggestion is to review this film to see if it is appropriate for your students.

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SIMULATION PROCEDURES Simulation 6.1 (p. 160) Downsizing in the Enigma Company 1. Student premeeting preparation: a. Complete Step 1 before coming to class.

2. Suggestions: a. Discuss the concept of consensus decision making used in Step 2. b. I usually have students turn in an Enigma Rating Form from each team. I post the forms on a wall or class room bulletin board and leave the form up for several weeks. This “public exposure” tends to build more interests in the simulations and provides the teams a certain degree of motivation to operate at peak performance.

3. Discussion points: a. Degree of involvement - One basic issue is the degree of involvement in the decision process. b. How decision is made - Whether by consensus, majority, or by autocratic influence, the method for making decisions is important to the acceptance of the outcome. Having a voice increases individual commitment, while arbitrary decisions cause resistance, lack of involvement, etc. c. Decision quality - Another major consideration is the question of decision quality. There are conflicting views as to whether individuals or groups make higher-quality decisions. d. Time factor - Another variable is the time factor, the pressure to reach a decision within a time limit. The greater the involvement of members, the longer the time needed to make the decision. Thus, consensus usually takes longer than other decision methods.

4. Answers: See the end of this section for an answer sheet that you can reproduce to hand out in class.

A. Banks B. Brown C. Newton D. Fram C. Peters R. Salgado V. Green R. Chu

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5. Total time suggested: 60 minutes You will need to adjust these times to fit your specific schedule and class plans.

Step 2 Step 3 Step 4

Minutes 30 20 10

Total

60

Notes

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Answers for Simulation 6.1 Downsizing in the Enigma Company

A. Banks B. Brown C. Newton D. Fram C. Peters R. Salgado V. Green R. Chu

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Simulation 6.2 (p. 164) Driving and Restraining Forces 1. Student premeeting preparation: None 2. Discussion point: a. Explore with the students any advantages and disadvantages that could occur as a result of acknowledging the driving and restraining forces.

3. Total time suggested: 50 minutes You will need to adjust these times to fit your specific schedule and class plans.

Step 1 Step 2

Minutes 25 25

Total

50

Notes

Simulation 6.3 (p. 166) Strategies for Change 1. Student premeeting preparation: None 2. Total time suggested: 60 minutes You will need to adjust these times to fit your specific schedule and class plans.

Steps 1 to 4 Step 5 Total

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Minutes 45 15 60

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CASE TEACHING NOTES The Hexadecimal Company (p. 167) I. Problems A. Macro 1. Company resistance to change.

2. “Us” versus “them” view of practitioners forms company’s viewpoint.

B. Micro 1. Professor/external practitioner ended too soon; did not provide direction or continuity.

2. “In-group” image perpetuated by OD group.

3. President too involved in details at beginning.

4. “Internal” consulting group was mostly outsiders and not accepted by the company at large.

5. OD group had little familiarity with nature of firm (except maybe George Kessler).

6. OD program too ostentatious and too costly for company.

7. Lack of unity in purpose and techniques within OD group.

8. Kay and Indar’s isolation from others and closeness to president had negative effects in OD group.

9. Budgeting not clarified at beginning.

10. Evaluation late - 1 year later and then almost a do or die evaluation.

II. Causes 1.

2.

3.

4.

5.

Group too cohesive and creates images of “in-group.”

“Fancy” atmosphere perpetrated.

President too involved at first.

Company not prepared for OD and its needs and purposes.

OD groups consisted almost entirely of outsiders.

III. Systems affected 1. Structural - changing whom the OD group reports to will only confuse purpose and goals; Blake is not prepared.

2. Psychosocial - the OD group has caused at least as much antagonism as it has good results.

3. Technical - no reference to OD group’s effectiveness.

4. Managerial - too top-down thus far.

5. Goals and values – No indication that the company including top management (other than the OD group) knew or bought-in to the OD program. It was just a management training program.

IV. Alternatives 1. Keep as is.

2. Put under Blake.

3. Have professor help organize and budget for OD.

V. Recommendations Alternative three with central contact person and clear budget. If size of Hexadecimal 104

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allows, make OD a separate department with its own vice president. Keep reporting to president but keep him personally removed from specific decisions. Also, make reports to the executive committee and gain their support. Bring several line employees into OD.

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STUDENT PREPARATIONS FOR THE NEXT CHAPTER 1. Read Chapter 7.

2. Prepare for OD Skill Simulation 7.1 and complete Step 1. Form teams of eight members and assign roles the preceding class.

3. Read and analyze Case: The Farm Bank.

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Chapter 7

OD Intervention Strategies

Learning Objectives 1. Identify and understand the range of major OD intervention techniques and how they can be applied.

2. Identify the way various interpersonal, team, and intergroup techniques fit into an OD program.

3. Understand the change strategies.

Student Premeeting Preparation 1. Read Chapter 7 2. Prepare for OD Skill Simulation 7.1. Form teams of eight members and select roles.

Complete Step 1.

3. Read and analyze Case: The Farm Bank.

Instructor Preparation and Materials 1. Simulations: no special materials are required.

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LECTURE OUTLINE 1) Learning objectives. (pg. 175) a) Identify and understand the range of major OD intervention techniques and how they can be applied. b) Identify the way various interpersonal, team, and intergroup techniques fit into an OD program. c) Understand the change strategies.

2) Organizational change. (pg. 175) a) The starting point for setting a change program in motion is the definition of a total change strategy. b) An OD strategy is as a plan for relating and integrating the different organizational improvement activities engaged in to accomplish objectives. c) There are several major categories of OD strategies: structural, technological, and behavioral. d) Developing a strategy includes the planning of activities intended to resolve difficulties and build on strengths. e) This and the next eight chapters discuss the fourth stage of an OD program: action plans, strategies, and techniques. (See Figure 7.1, Stage Four of Organization Development's Five Stages)

3) Basic strategies to change. (pg. 176) a) Structural strategies. i) Changes that relate the elements of the organization to one another. ii) Other structural changes include removing or adding layers to an organization’s hierarchy. iii) Downsizing is often associated with restructuring efforts. iv) Structural changes of another type involve decentralization and centralization. v) Mergers use structural changes to bring two companies together. b) Technological strategies. i) Changes in machinery, methods, automation, and job design that bring an organization up to state of the art. ii) The changes have helped companies and their employees become more productive. c) Behavioral strategies.

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i)

Emphasizes the better utilization of human resources by improving the level of morale, motivation, and commitment of members. ii) In the past, behavioral strategies were often neglected when organizations implemented changes. iii) OD traditionally has been associated with behavioral strategies. d) In practice, changes made using any one strategy will likely require some use of the other two. e) Structural, technological, and behavioral change strategies are not OD change strategies per se. f) The determining feature of an OD strategy is the process used to arrive at and carry out the strategy.

4) Integration of change strategies. (pg. 178) a) OD attempts to deal with organization change from an integrated standpoint that considers structural, technical, and behavioral changes and how these change approaches influence one another. (See Figure 7.3 - An Integrated Approach to Change) b) Interdependence of subelements (departments) of an organization needs to be considered. c) Change strategies need to take account of both overt and covert elements of an organization. i) Covert elements are often obscured or hidden. (See Figure 7.4 - The Organization Iceberg Approach to OD) ii) Examples of covert elements include patterns of communication, trust, and openness. d) When developing a change strategy, second-order consequences should be considered where a change in one area influences other areas.

5) Stream analysis. (pg. 181) a) Stream analysis is a method useful in planning behavioral, structural, and technical changes. (See Figure 7.5 - Stream Analysis Chart) b) Stream analysis begins by identifying behavioral, technological, and structural interventions that the organization can implement as part of the OD program. c) Stream analysis helps the organization to diagnose and plan interventions over a period of time. d) It provides a graphical portrayal of the changes and allows for progress in implementing specific changes to be plotted.

6) Selecting an OD intervention. (pg. 182) Chapter 7 OD Intervention Strategies .

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a) Interventions are the range of actions designed to improve the health of the client system. b) Interventions are the specific means, activities, and programs by which change can be determined. c) In selecting a specific OD technique, the practitioner and the client consider a number of factors. i) The potential results of the technique. ii) The potential implementation of the technique including costs versus benefit. iii) The potential acceptance of the technique.

7) Overview of major OD intervention techniques. (pg. 183) a) Because OD is a dynamic discipline, there is debate upon what OD is and what OD is not. b) Intervention techniques include activities focusing on: (See Table 7.1 - An Overview of OD Interventions) i) The individual or interpersonal level. ii) The team or group level. iii) The intergroup level. iv) The total organizational system level. c) An intervention may fit into several or all categories. d) OD programs do not necessarily include all of the four levels. e) The next eight chapters are devoted to a more detailed discussion of these OD intervention techniques.

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OD Applications Changing P&G (pg. 181) SUMMARY Through establishing a vision of the future for P&G along with the company continually making changes in its management and strategy, P&G has maintained its profitability and its leadership roll in consumer products.

MAJOR POINTS • • • • • • •

Procter and Gamble is one of the largest consumer product companies in the world and a major manufacturer of home-cleaning products.

The culture at P&G is well established.

The chairman of board (retired as CEO) spends a large part of his day communicating his vision of P&G. A major part of the P&G strategy has been to focus on building strong brands that sell at premium prices.

With a major worldwide recession, the strategy was changed to offer more lowerpriced products.

P&G increased spending on innovating new products, engineering and manufacturing technology, and understanding the consumer.

Corporate headquarters has undergone changes by tearing down office walls and moving division presidents to be closer to their teams.

QUESTIONS 1. Of behavioral, structural, and technological change strategies, how would you describe P&G’s strategies?

Answer: The OD Application illustrates use of all three strategies. Examples of behavioral strategies include chairman of board communicating his vision of P&G. A structural strategy that overlaps with a behavioral strategy is tearing down office walls of top executives so that they share an open area and can communicate better. Another example is division VPs moving closer to their teams. This uses a structural strategy to make behavioral changes. An example of the use of technological strategies is the decision to continue to develop new products and improve manufacturing despite a worldwide recession.

2. Does P&G integrate the three change strategies and, if so, how?

Answer: Communicating the vision of P&G seems to be the centerpiece, the glue that binds, of the companies change program. The success of behavioral, structural, and technological change strategies seem to hinge upon everybody knowing what the goal is and how to get there.

3. Based on current information, evaluate the success of P&G.

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Review Questions 1. Compare and contrast the basic OD strategies.

Answer: Structural - changes that affect the way that the elements of an organization relate to one another.

Technical - changes that bring an organization up to the state of the art in machinery, methods, automation, and job design.

Behavioral - changes that improve the level of morale, motivation, and commitment of members.

Each of these three change strategies cannot be isolated from one another as a change in one area usually affects other areas, sometimes in unpredictable ways.

2. Identify and give examples of OD interventions for various target systems.

Answer: Individual or interpersonal level - job design and enrichment, goal setting, career planning, stress management.

Team or group level - team building, job design and enrichment, role negotiation, role analysis.

Intergroup level - intergroup development, third-party intervention, organization mirror.

Total organizational system level - goal setting, survey feedback, action research, Likert’s System 4.

3. Explain how stream analysis can be used in an OD program.

Answer: Stream analysis is a method used in planning the analysis and implementation of behavioral, structural, and technical changes. It helps the practitioner and client diagnose and plan the interventions and keeps track of their progress once the change program is underway. The information may be used to redesign the change program or to schedule time appropriately.

4. Describe an integrated approach to change.

Answer: A change oriented toward dealing with the total organization through an integration of behavioral, structural, and technical strategies. After the consultant and the client determine the major strategy, they then decide upon the specific OD techniques to implement in the change effort.

5. Explain three factors that should be considered in selecting a technique.

Answer: (1) The potential results of the technique. Will it solve the basic problems? Does it have any additional positive outcomes? (2) The potential implementation of the technique. Can the proposed technique actually work in a practical application? What are the actual dollar and human costs of this technique and the impact of costs upon the client system? How do the estimated costs of the technique compare with the expected results 112

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(costs versus benefit)? (3) The potential acceptance of the technique. Is the technique acceptable to the client system? Is the technique adequately developed and tested? Has the technique been adequately explained and communicated to members of the client system?

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KEY WORDS AND CONCEPTS Define and be able to use the following words and concepts: Behavioral strategies - places emphasis on the use of human resources. (pg. 178) OD intervention - the range of actions designed to improve the health or functioning of the client system in an OD program. (pg. 183) OD strategy - a plan for change using structural, technical, and behavioral methods. (pg.

175) Parkinson’s Laws - summarizes the problems of inefficient practices in organizations: (1) the law of multiplication of subordinates and (2) the law of multiplication of work. (pg.

183) Second-order consequences - indirect consequences that result from a change action. (pg. 180) Stream analysis - a method useful in planning the changes that plots the interventions over a period of time. (pg. 181) Structural strategies - alters the framework that relates elements of the organization to one another. (pg. 176) Technological strategies - changes in machinery, methods, automation, and job design. (pg. 177) Virtual teams – teams and their meetings occur electronically over telecommunications lines and in some cases over the Internet. The need for face-to-face meetings is reduced. (pg. 179)

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ADDITIONAL RESOURCES Readings: Lafley, A. G. “What Only the CEO Can Do,” Harvard Business Review, May 2009, pp.

54-62.

Lafley, A. G. and Ram Charan, The Game-Changer: How You Can Drive Revenue and Profit Growth with Innovation, (New York: Crown Business, 2008.)

OD Skills Simulation: An additional simulation that is not in the text follows on the next page.

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OD Skills Simulation “Real-World” Change Strategies A. Purpose To identify various OD strategies that might be implemented to improve the functioning of existing “real-world” organizations.

B. Procedures Step 1. This simulation can be completed on either an individual or team basis. If you are working with a team, form into teams of approximately five members.

Step 2. You are to analyze an existing organization, diagnose its problems, and develop an OD change strategy. Some possible organizations for you to analyze include: a. This class or a subgroup of class members if group membership has remained the same in the simulations. b. Another class. c. An organization, such as a business, in your community. d. An organization that has had articles written about it. Suggested sources for the articles include Forbes, Business Week, Fortune, and the Wall Street Journal.

Depending on the organization selected, you may need to make an on-site visit and interview members.

Step 3. Report to the class your findings. First, briefly describe the organization if others in the class are not familiar with the organization. Then identify the problems diagnosed and the recommended change strategies. The rest of the class may ask questions.

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SIMULATION PROCEDURES Simulation 7.1 (pg. 186) The Franklin Company 1. Student premeeting preparation: a. Form teams of eight for the Franklin Management Team. b. All class members are to read The Franklin Company Background.

Participants should read their respective role descriptions. c. Those serving as practitioners should become familiar with the OD Practitioner Guidelines and the Practitioner Diagnostic Form.

2. Suggestions: a. Stress that the emphasis in Step 4 is to obtain feedback. Try to avoid a situation where members become defensive and feedback is rejected. b. Additional time may be needed for more consulting teams.

3. Discussion points: a. b. c. d.

Look at the types of strategies used by the practitioners.

Did practitioner groups develop integrated strategies?

Were some types of strategies used more than others?

Were the practitioner groups able to accept the feedback from the Franklin Management Team at the conclusion of the role-play?

4. Total time suggested: 70 to 80 minutes You will need to adjust these times to fit your specific schedule and class plans.

Step 2 Step 3 Step 4 Step 5

Minutes 30 15 15 10 to 20

Total

70 to 80

Notes

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CASE TEACHING NOTES The Farm Bank (pg. 194) I. Problems A. Macro 1. Client system unprepared for change.

2. Client system unfamiliar with and unprepared for MIS. B. Micro 1. Top-down approach (Swain’s) excluded staff from decision and preparation for MIS. 2. Survey should have preceded, not followed, MIS. 3. Hassler not assertive enough to fulfill Swain’s goals by keeping Swain informed.

4. Particulars in MIS need to be changed (limit info after determining needs, change format, etc.).

5. Wyatt has been charged by Swain to make survey but her boss, Hassler, has told her not to give the report to Swain.

II. Causes 1. Conservative nature of firm (and age of staff).

2. Lack of education regarding MIS. 3. Lack of planning regarding functions MIS would perform for managers and firm.

4. Hassler more interested in personal security than in fulfilling purpose for which he was hired.

III. Systems affected 1. Structural - Chain of command prohibited Wyatt from improving MIS through using results of report.

2. Technical - MIS needs new form and new limitations. These are not being carried out.

3. Behavioral – Wyatt’s “fulfillment” and satisfaction of job well done are restricted.

Other staff’s expectations brought on by survey are frustrated by lack of followthrough. Swain hopes are not fulfilled. Hassler knows he is not fulfilling his role.

Managerial decisions company-wide are not being made in the best possible way, since information is not being managed in the most effective way possible.

4. Managerial – Hassler is uncomfortable about taking things up the chain. Possibly the president, Swain, has intimidated subordinates in the past. Or Hassler does not want to rock the boat, has a “full plate”, or maybe is lazy. It is difficult to access motives of managers.

5. Goals and values – Excellence and organization improvement does not seem to be valued by most managers except possibly Wyatt.

IV. Alternatives 1. Wyatt could convince Hassler it’s in his best interest to show Swain results of survey.

2. Wyatt could go along with Hassler’s inaction.

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3. Wyatt could go around Hassler and tell Swain.

V. Recommendations Wyatt needs to submit the report to Swain since this is the person who assigned her to do the survey. She needs to explain tactfully to Hassler the importance of her giving Swain the report. Once the report is sent to Swain, The Farm Bank needs to embark on a strategy of solving the problems identified in the survey. The approach should be an integrated one involving the people who use the MIS with then identifying specific problems and the steps to correct the problems. Hassler needs to be involved in making the changes as well as Wyatt.

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STUDENT PREPARATIONS FOR THE NEXT CHAPTER 1. Read Chapter 8.

2. Prepare for OD Skills Simulation 8.1. Prior to class, form teams of seven and assign roles. Complete Step 1.

3. Read and complete Steps 1 and 2 of OD Skills Simulation 8.2.

4. Read and prepare for Step 1 of OD Skills Simulation 8.3.

5. Read and analyze Case: The OD Letters.

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Chapter 8

Process Intervention Skills

Learning Objectives 1. Understand the key OD process skills and determine how they can be applied.

2. Practice using OD process skills.

3. Identify and gain insights into your OD style.

Student Premeeting Preparation 1. Read Chapter 8.

2. Prepare for OD Skills Simulation 8.1. Prior to class, form teams of seven and assign roles. Complete Step 1.

3. Read and complete Steps 1 and 2 of OD Skills Simulation 8.2.

4. Read and prepare for Step 1 of OD Skills Simulation 8.3.

5. Read and analyze Case: The OD Letters.

Instructor Preparation and Materials 1. Simulations: no special materials are required.

2. I have found that, for most students, reading and hearing a lecture about process skills and interventions is not enough to grasp fully the idea. It may help your students understand the nature of process interventions if they see it demonstrated. As the text points out, “modeling” is one way organization members can learn to give process observations. It may be helpful to set up a role-play for the class where you get one student to act as a manager with some kind of work problem. Then you act as an OD practitioner using process interventions. It does not need to be a long role play - just long enough to get the idea across.

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LECTURE OUTLINE 1) Learning objectives. (pg. 198) a) Understand the key OD process skills and determine how they can be applied. b) Practice using OD process skills. c) Identify and gain insights into your own OD style.

2) A new paradigm in organizations. (pg. 198) a) A change is occurring in leadership style that has come about largely because of the increasing importance of teams in today’s organization. b) Organizations are relying increasingly on the team approach to managing. c) Major changes of managing have been thrust upon both lower and middle managers. i) They will need new skills in performance management and work redesign. ii) Also, new skills will be required to serve as a coach where the managers support and nurture employees. d) An understanding of group and team behavior is needed.

3) Process interventions. (pg. 199) a) Process intervention is an OD practitioner skill for helping work groups become more effective. b) Process activities help the work group or client to perceive, understand, and become more aware of the way it operates and the way its members work with one another. c) The manager practicing process interventions observes individuals and teams in action and helps them learn to diagnose and solve their own problems. d) The managers asks questions, focuses the team’s attention on how it is working together, teaches or provides resources where necessary, and listens. e) Teams become more independent and do not have to look to the manager to solve problems.

4) Group process. (pg. 200) a) Process interventions concentrates on how groups and individuals within those groups behave. i) Process is the how of the group.

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ii) Content is the what of the group. b) Five areas crucial to effective organization performance are communication, member roles and functions in groups, group problem-solving and decisionmaking, group norms and growth, and leadership and authority. (See Figure 8.1 Group Process Interventions) c) Communications. i) Analyzing the communications process within a group. ii) Examples include observing frequency and length of time each member talks, who talks to whom, and who interrupts whom. d) Member roles and functions. i) Observing the roles and functions that members have assumed. ii) Roles can be divided into three categories. (See Table 8.1 Group Members’ Behaviors) (1) Group task - member behaviors that directly help the group solve its task such as seeking and giving opinions, asking questions, and summarizing.

(2) Group building and maintenance - behaviors that help the group grow and improve its members’ interpersonal relationships such as harmonizing, encouraging, and compromising.

(3) Individual - behaviors that satisfy individual needs and are inconsequential to the group’s task and maintenance. e) Group problem solving and decision making. i) Helping the group understand how it makes decisions and the consequences of each method of decision-making. ii) A decision made by group consensus is one that all the members have shared in making and one they will support and buy into even though they may not be totally supportive. f) Group norms and growth. i) Assisting the group in understanding its norms and how the norms affect decision making. ii) The group will improve its decision-making process as members grow and become more supportive of one another. g) Leadership and authority. i) The group better understands the impact of leadership styles and authority. ii) The roles of formal and informal leaders are clarified and developed. iii) Leadership functions are shared among the work group members.

5) Types of process interventions. (pg. 203) a) Process interventions differ in many ways, but they never involve the group’s task. b) The concern is how the group is going about accomplishing its task. c) Process interventions include clarifying, summarizing, synthesizing, generalizing, probing, questioning, listening, reflecting feelings, providing Chapter 8 Process Intervention Skills .

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support, coaching, counseling, modeling, setting the agenda, feeding back observations, and providing structural suggestions. d) Clarifying and summarizing. i) The purpose is to resolve misunderstandings in what members are saying. ii) Provides a summary of the major points. iii) This sometimes helps the group to understand where it is. iv) Example: “Mary, I seem to be hearing you say . . . Is this correct?” e) Synthesizing and generalizing. i) This puts several points and ideas together into a common theme. ii) Takes the ideas or feelings of one person and attaches them to the entire group. iii) Example: “Am I correct in assuming the rest of you share Irwin’s position?” f) Probing and questioning. i) Seeks additional information and asks questions when the group needs additional information. ii) May be especially useful at the beginning of a discussion if members are reaching hasty conclusions. iii) Example: “Larisa, you mentioned . . . I’m not sure everyone understands your point. Could you explain it in more detail?” g) Listening. i) Communicates nonverbally that one is listening through eye contact, nods of the head, and body posture. ii) Hears the entire message including feelings. iii) Examples: eye contact, nod of the head, body posture. h) Reflecting feelings. i) Communicates back to the speaker the feeling part of the message that has been heard. ii) The listener practices empathy. iii) Reflecting feelings refers to communicating back to the speaker the feeling part of the message that has been heard. iv) Example: “Shannon, am I correct in assuming you have a problem with what Murphy has just reported?” i)

Providing support, coaching, and counseling. i) Gives assistance to the group or an individual on behaviors that can improve group functioning. ii) Encourages group members to talk and express their ideas. iii) Complements the group for a particularly productive meeting.

j)

Modeling. i) Refers to learning to give process observations by observing someone else making process observations. ii) Members are encouraged to take over the role of providing process interventions.

k) Setting the agenda.

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i)

Sets aside time when process issues will be discussed apart form content issues. ii) This may include issues such as how well members communicate with each other. l)

Feeding back observations. i) Provides feedback to members on the group process. ii) Limited to the extent that the group is able to accept the feedback.

m) Structural suggestions. i) Provides suggestions pertaining to group membership, communication patterns, allocation of work, and lines of authority. ii) The manager avoids stepping in and taking over.

6) Results of process interventions. (pg. 205) a) Little empirical evidence on success of process interventions. b) Some findings suggest positive effects on participants. c) Despite lack of empirical evidence, process interventions are relied upon by OD practitioners and are increasingly being used by line managers in daily operations.

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OD Applications Leaders Shape the Culture at Disney (pg. 203) SUMMARY The philosophy of managing the Disney theme parks is that the actions of leaders inspires and motivates everyone with whom they come in contact.

MAJOR POINTS • • • • • • • • •

Disney has one of the world’s most deeply rooted corporate cultures.

The leadership and management methods of theme parks have been used since the first theme park, Disneyland, opened in the mid 1950s.

Leaders are inclusive and share information with other employees.

They spend a majority of their time working frontline shifts in operating areas.

Disney calls this “walking the front.”

In areas where it has implemented leadership improvement, the guest return rate has risen by more than 10 percent and cast member turnover rates have dropped.

The Disney methods are shared with other organizations at the Disney Institute.

Topics at the institute include leadership excellence, loyalty, quality service, and creativity.

The leadership methods at Disney have helped to shape the culture.

QUESTIONS 1. Research the programs at the Disney Institute. See its web site at www.disneyinstitute.com/ for additional information 2. Compare Disney’s practice where leaders “walk the front” with other companies where their employees directly meet the customer (examples: other amusement parks, retail stores, and restaurants).

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Review Questions 1. Explain how process interventions can be used in an OD program.

Answer: Process interventions can help a group look at how it is solving its problems and making decisions. The objective is for the group to become more effective. The OD practitioner can use process interventions such as feeding back observations, coaching, clarifying, summarizing, synthesizing, probing, questioning, listening, reflecting feelings, providing support, counseling, modeling appropriate behavior, setting the agenda, and making structural suggestions

2. What is the difference between group task functions and group maintenance functions?

Answer: Members of existing groups take on roles that can be categorized as group task functions and group maintenance functions. Group task functions include member behaviors that directly help the group solve its task. These behaviors include initiating and suggesting what is the goal of the group, how the group can proceed to accomplish its goal, seeking opinions and information, giving opinions and information, asking questions of clarification, summarizing, and testing for group consensus. Group maintenance functions include behaviors that help the group grow and improve its members’ interpersonal relationships. Maintenance functions also include harmonizing, compromising, and encouraging behaviors.

3. Identify and explain the communication processes that a manager can use in a work group.

Answer: The communication process largely follows process interventions. The manager can make statements that clarify what a person has said and summarize the group’s position. When the team needs to explore additional ideas, the manager may seek more information and ask questions. At times it may help to pull several ideas together. The manager can reflect back what a speaker has said from both a content and feeling point of view. The manager can practice empathy by trying to see the world from the speaker’s point of view. The manager can often communicate best by encouraging others to talk and express their ideas. Listening is one of the more important communication processes.

Listening is an active process that includes making eye contact and nodding of the head.

Listening also involves hearing the entire message including the feelings of the speaker, which are communicated nonverbally (tone of voice, facial expressions, and body posture.)

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KEY WORDS AND CONCEPTS Define and be able to use the following words and concepts: Agenda setting interventions - a type of process intervention that sets aside time when process issues will be specifically discussed apart from content issues. Agenda-setting interventions do not include determining the task items to be discussed. (pg. 205) Empathy - a process intervention where the listener tries to see the world from the speaker’s point of view. (pg. 204) Group building and maintenance functions - include behaviors that help the group grow and improve its members’ interpersonal relationships. (pg. 201) Group consensus - a decision made by a group that all members can support. Decision making by consensus is the ideal technique though it is the most difficult to obtain. (pg.

202) Group content - the task or what a group does. (pg. 200) Group process - how the group goes about accomplishing its task. (pg. 200) Group task functions - functions include member behaviors that directly help the group solve its task. (pg. 201) Individual functions - behaviors of group members that satisfy individual needs and are inconsequential to the group’s task and maintenance. (pg. 202) Member roles - functions that individual members play in a group. The roles can be broadly categorized as group task, group maintenance, and individual. (pg. 200) Norms - the organized and shared ideas regarding what group members should do and feel. (pg. 202) Process interventions - those specific practitioner interventions whose concern is how the group is going about accomplishing its task. Types of interventions include summarizing, synthesizing, questioning, listening, reflecting feelings, coaching, modeling, setting the agenda, feeding back observations and structural suggestions. (pg.

199)

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ADDITIONAL RESOURCES Readings: Schein, Edgar, Organizational Culture and Leadership (San Francisco: Jossey-Bass, 2004.)

Schein, Edgar, Process Consultation: Its Role in Organization Development, Volume I, 2nd ed. (Reading, Mass.: Addison-Wesley, 1988).

Schein, Edgar, Process Consultation: Lessons for Managers and Consultants, Volume II (Reading, Mass.: Addison-Wesley, 1987).

Schein, Edgar, Process Consultation Revisited, Building the Helping Relationship, (Reading, Mass.: Addison-Wesley Publishing Co., Inc., 1999).

Thompson, Leigh L., Making the Team, A Guide for Managers, (Upper Saddle River, NJ: Pearson/Prentice Hall, 2008.) Part Two, Internal Dynamics is particularly germane.

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SIMULATION PROCEDURES Simulation 8.1 (pg. 207) Apex Oil Spill 1. Student premeeting preparation: a. Students form into groups of seven with members each selecting one role. Depending on class size, any additional members will serve as observers. b. All students read the APEX OIL SPILL BACKGROUND INFORMATION and only their respective role descriptions. The observer is to study carefully the Observer Forms.

2. Discussion points: a. It is tempting for the practitioner to get involved in the content of the APEX meeting instead of focusing on the processes involved during the meeting. b. Were committee members willing and receptive to the process interventions of the practitioner? c. It is sometimes difficult for students to understand the difference between content and process. If the class had difficulty focusing on process interventions, perhaps you could work with one team as an OD practitioner demonstrating process interventions with the remainder of the class observing

3. Total time suggested: 70 minutes You will need to adjust these times to fit your specific schedule and class plans.

Step 2 Step 3 Step 4

Minutes 40 15 15

Total

70

Notes

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Simulation 8.2 (pg. 213) Trust Building 1. Student premeeting preparation: a. This simulation is dependent upon Simulation 8.1 or some other similar team exercise having been completed.

2. Discussion points: a. Emphasize that the purpose of the feedback is to enable participants to improve when working in groups. Feedback intended to make the receiver feel good may not always be helpful to that person in the end.

On the other hand, the feedback should not be overwhelming and perceived as an attack. b. Other’s perceptions of an individual may not be correct. Perceptions of an individual may influence others behavior toward the individual that may in turn influence that individual’s future behavior (self-feeding cycle). c. Initial perceptions can be very difficult to change.

3. Total time suggested: 25 to 35 minutes You will need to adjust these times to fit your specific schedule and class plans.

Step 1 (may be completed out of class) Step 2 (may be completed out of class) Steps 3 and 4 Step 5 Total

Minutes 0 to 5 0 to 5 10 15 25 to 35

Notes

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Simulation 8.3 (pg. 217) Process Interventions 1. Student premeeting preparation: a.

Each person should come to class with a class or work problem that can be shared with two other students.

2. Suggestions: a. It is sometimes difficult for students to get involved in this simulation.

There seems to be reluctance among some to share meaningful and real problems and a contrived problem is usually not very effective. A few words from you encouraging the students to share meaningful problems can facilitate the success of the simulation. b. It is sometimes helpful for students to form into groups with people whom they are not very familiar. This may reduce some of the threat in sharing problems. c. Be sure that all groups have at least three members. Should class numbers require a group of four, assign two persons to be observers at a time.

3. Discussion points: a. Were problems or symptoms of problems dealt with? b. What techniques or words from the practitioner seemed to be effective? c. Did practitioners practice process skills?

4. Total time suggested: 60 minutes You will need to adjust these times to fit your specific schedule and class plans.

Steps 1 and 2 Step 3 Total

Minutes 45 15 60

Notes

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CASE TEACHING NOTES The OD Letters (p. 217) I. Problems A. Macro 1. Lack of clear objectives.

2. Little evidence of top management support.

3. XRS Laser does not seem interested in more than a weekend low-involvement training program.

B. Micro 1. If Ryan accepts the assignment, what training programs should he implement?

II. Causes 1. John Everet does not set an example of commitment to the employees.

2. There is little evidence that top management is interested in an OD program. If there are management problems, they are not aware of them or are not interested in solving them.

III. Systems affected 1. Structural - John Everet’s attitudes and behaviors permeates through the levels of the organization.

2. Psychosocial - personal commitment to change is not in evidence.

3. Technical - none apparent.

4. Managerial - managers key off John Everet as shown by decreasing attendance at the training sessions.

5. Goals - no indication that change goals have been set.

IV. Alternatives 1. Ryan rejects training offer.

2. Ryan accepts training offer but is prepared for this to be a low-level, one-time relationship.

3. Ryan meets with John Everet before going on the trip to determine what the goals and motivation of John are. Mutual expectations are explored and defined.

4. Ryan accepts training offer. In the training sessions Ryan confronts behaviors through process observation skills. This may at times be confrontational but Ryan’s demeanor is calm.

V. Recommendations Combinations of alternatives 3 and 4.

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STUDENT PREPARATIONS FOR THE NEXT CHAPTER 1. Read Chapter 9.

2. Prepare for OD Skills Simulation 9.1. Prior to class, form teams of six or more and assign roles before class. Complete Step 1.

3. Complete Steps 1 and 2 of OD Skills Simulation 9.3.

4. Read and analyze Case: The Sundale Club.

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Chapter 9

Employee Empowerment and Interpersonal Interventions

Learning Objectives 1.

2.

3.

4.

Recognize the need for employee empowerment interventions in an OD program.

Experience the dynamics involved in interpersonal communication.

Practice giving and receiving feedback on your personal communication style.

Describe career life planning and stress management as OD techniques.

Student Premeeting Preparation 1. Read Chapter 9.

2. Prepare for OD Skills Simulation 9.1. Prior to class, form teams of six or more and assign roles before class. Complete Step 1.

3. Complete Steps 1 and 2 of OD Skills Simulation 9.3.

4. Read and analyze Case: The Sundale Club.

Instructor Preparation and Materials 1. Duplicate the answer to Simulation 9.1. It is in the Simulation Procedures section of this manual.

2. Review the scoring procedures for Simulation 9.2.

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LECTURE OUTLINE 1) Learning objectives. (pg. 223) a) Recognize the need for employee empowerment interventions in an OD program. b) Experience the dynamics involved in interpersonal communication. c) Practice giving and receiving feedback on your personal communication style. d) Describe career life planning and stress management as OD techniques.

2) Empowering the individual. (pg. 223) a) Empowerment is the process of giving employees the power to make decisions about their work. b) Power and decision making are delegated to lower levels to engage all employees. c) A range of OD intervention activities aim at enhancing the development and empowerment of the individual members of the organization. d) The interventions include helping organization members to improve their communication abilities, interpersonal skills, and managerial performance. e) The techniques discussed in this chapter include: i) Employee empowerment. ii) Laboratory learning. iii) Interpersonal style. iv) Transactional analysis. v) Career life planning. vi) Stress management.

3) Employee empowerment. (pg. 223) a) The individual is one of the most critical elements in any large-scale organizational change. b) Central to empowerment is: i) The delegation of power and decision-making to lower levels. ii) The promulgation of a shared vision of the future. iii) Engaging all employees so that they develop a personal sense of pride, selfrespect, and responsibility. c) Employees who are empowered are more proactive and self-sufficient. d) The individual is one of the most critical elements in any large-scale 136

Chapter 9 Employee Empowerment and Interpersonal Interventions .

organizational change. e) The purpose is to have the individual’s purpose and vision congruent with the organization’s. f) In many organizations, employee empowerment has become a basic cornerstone of change and development programs. g) General Electric has a company wide version of employee involvement that they call “Work-Out.” h)

Empowerment concepts are interwoven through OD interventions that will be discussed in future chapters including: i) Team and system interventions. ii) Total quality management. iii) Self-managed work teams. iv) Learning organizations. v) High-performance systems.

4) Laboratory learning. (pg. 225) a) Laboratory learning is sometimes called encounter groups, sensitivity training, training groups, or simply T-groups. b) Laboratory learning involves using a group as a laboratory for experimenting, learning, and discovering cause-and-effect relations in interpersonal communication. c) Laboratory learning grew rapidly through the mid-1970s though recently it has been used less as an OD technique. d) Laboratory learning programs usually include 10 to 12 participants who typically do not know one another and one or two experienced trainers or facilitators. e) Objectives of laboratory learning include: i) Insights into managerial and personal style. ii) Determine impact upon others. iii) Awareness of group functioning. iv) Analyzing and coping with change. f) There are no clear-cut empirical studies to document effectiveness. g) Organizations that use some form of laboratory learning methods are more likely to combine it with other OD interventions.

5) Interpersonal Style: The Johari Window Model. (pg. 226) a) The Johari Window Model is a technique for identifying interpersonal communication style.

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b) If the organization uses formal communications, most of the communication between members may not be authentic. c) Communication is a critical dimension in determining the effectiveness of organizations. d) The Johari Window Model is a technique for identifying interpersonal communication style. (See Figure 9.1, The Johari Window: A Model of Interpersonal Communication Processes.) e) The model presents a two dimensional, four cell figure based on the interaction of the self and others. i) The public area - behavior, thoughts, and feelings which are known both to the person and to others. ii) The blind area - aspects of the self not known to oneself but readily apparent to others. iii) The closed area - behaviors and feelings know only to oneself but not to others. iv) The unknown area - aspects of the self not known to oneself or others. f) Movement along the two dimensions of receiving feedback and disclosure of self changes an individual’s interpersonal style. g) Disclosure involves the open disclosure of one’s feelings, thoughts, and candid feedback to others. h) Feedback is the behavioral process used to enlarge the public area and reduce the blind area.

6) Transactional analysis. (pg. 228) a) TA is a model for analyzing human behavior using familiar terminology. b) Structural analysis is useful to understand how we get to be who we are. i) A person has three sources of behavior called ego states. (See Figure 9.2, Ego States) (1) Parent - behaviors copied from those of a parental figure.

(2) Adult - behaviors involving the basis of objective facts.

(3) Child - behaviors retained from the individual’s childhood. ii) All three ego states exist within everyone and a certain amount of each ego state is necessary for a well-integrated personality. iii) Structural analysis can enable people to better understand the source of their values, behaviors, and thoughts. (See Figure 9.3, Ego States of an Organization) iv) This increased awareness can help in improving one’s effectiveness in an organization. c) Understanding transactional theory. i) A transaction is a basic unit of communication. ii) Every interaction between people involves a transaction between their ego states (parent, child, and adult.)

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iii) Transactions are classified as: (See Figure 9.4, Types of Interactions) (1) Complementary transaction - occurs when a message sent from one ego state receives an expected response from the other person’s appropriate ego state.

(2) Crossed transaction - occurs when a message from one ego state receives a response from an inappropriate or unexpected ego state.

(3) Ulterior transaction involves two ego states simultaneously: the literal words of the transaction, which may mean one thing, and the underlying intent, which may mean something entirely different. iv) A stroke is any form of recognition including physical, verbal, and visual.

(1) Strokes may be conditional and unconditional. (a) Conditional strokes are tied to some type of performance by the receiver of the stroke. (b) Unconditional strokes are given to a person with no strings attached. (c) Both types of strokes are appropriate.

(2) Strokes may also be positive, negative, and crooked. (a) Positive strokes. (i) Transactions that provide an expected response and reassure a person’s worth. (ii) Results in a “You’re OK” feeling. (b) Negative strokes (i) Critical transactions resulting in an unexpected, unreassuring response. (ii) Results in a “You’re not OK” feeling. (c) Crooked strokes. (i) Transactions that have a double meaning. (ii) It transmits a message different from the words a person uses. d) Psychological positions and scripts. i) A psychological position is a person’s general outlook on life and how he or she relates to others. ii) Psychological positions are: (1) I’m OK, you’re OK. - an acceptance of self and others, a healthy outlook.

(2) I’m OK, you’re not OK. - tendency to mistreat, blame, and put down others.

(3) I’m not OK, you’re OK. - feelings of low self-esteem or of lack of power or inadequacy compared to others.

(4) I’m not OK, you’re not OK. - feelings of low self-esteem or of hopelessness and loss of interest in living, with feelings of confusion and depression. e) Authentic communication and relationships. i) TA emphasizes open, authentic communications and relationships. ii) TA provides a framework for examining how people relate, communicate, and work. iii) Adult-to-adult transactions make for a more effective organization and help develop employee involvement and empowerment. iv) TA is more useful when it is used by a person to understand and improve their own communications.

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7) Career life planning interventions. (pg. 232) a) These interventions are aimed at helping individuals better manage their career on an interpersonal level. b) Career life planning is the process of choosing occupational, organizational, and career paths. c) One of the objectives is to help individuals that feel caught in an “organizational trap” when their career path reaches crisis points. d) Steps in career life planning: i) The participant prepares a set of career life goals. ii) He/she goes through the list with a practitioner or another person to test for reality, to determine priorities, and to look for conflicting goals. iii) Make a list of important accomplishments and things that have made the participant feel happy or satisfied. iv) With the other person, the participant works through the list of goals and the list of past accomplishments looking for conflicts. v) Prepare a detailed plan of action to get from where the participant is to where he/she would like to be. e) There is little documented evidence on the results of this technique though organizations using it report favorable results.

8) Stress management and burnout. (pg. 233) a) Though work-related stress to some extent may improve performance, excessive work stress and personal stress can become dysfunctional. b) Stress is an interaction between an individual and the environment characterized by emotional strain affecting a person’s physical and mental condition. c) Stressors are what causes stress. d) Stress requires two simultaneous events: i) An external event (stressor). ii) An emotional or physical reaction (normally regarded as a negative reaction) to the stressor, such as fear, anxiety, muscle tension, and increased heart rate. e) Major sources of stress. i) Stress can be traced to on-the-job activities and to events occurring away from work; however, the two are interrelated and are complex issues. ii) A recent study shows that jobs causing the most problems are lower-level jobs where there is a high psychological demand coupled with little control over the work place and little use of skills. iii) Potential stressful work activities include a change in policy, reorganization, unexpected changes in work schedules, conflicts with other people, lack of feedback, not enough time to perform duties, lack of participation, and job ambiguities.

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f) Job burnout. i) Job burnout refers to the emotional exhaustion and reduced accomplishment sometimes experienced by those who work with people or do “people work” of some kind. ii) It is a response to the chronic emotional strain of dealing extensively with other human beings, particularly when they are troubled or having problems. iii) Job burnout is more common among people in professions who must deal extensively with other people (clients, subordinates, and customers). iv) When job burnout occurs, the individual is no longer able to compete with the demands of the job. v) The cost to both the organization and individuals can be high. g) Stress management interventions and coping with stress. i) A stress management intervention is an activity or program that attempts to reduce the cause of work-related stresses or helps individuals to cope with the negative outcomes of exposure to stress. ii) Stress management interventions include time management, delegation, and self-awareness. iii) The OD program itself is a stress management intervention in that OD tries to create an organization in which there are fewer harmful stressors. h) Wellness program - helps employees to improve diet and exercise, sometimes providing company-built training facilities. i)

Relaxation techniques - two commonly used techniques are biofeedback and meditation.

j)

Career life planning - sessions may be one-to-one or group sessions.

k) Stress management training - instruction in time management, goal setting, relaxation techniques, and conflict resolution. l)

Seminars on job burnout - workshops to help employees understand nature and symptoms of job problems.

m) Results of stress management interventions. i) Medical research has shown the positive effect of exercise and the ability of healthy individuals to cope with increased levels of stress. ii) Stress management training, meditation, and biofeedback have been found to decrease pulse rate and blood pressure.

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OD Applications How W. L. Gore Empowers Individuals and Teams (pg.

225) SUMMARY Gore depends on continual innovation by relying on a flat organization system that makes extensive use of associates (employees) ideas and resourcefulness.

MAJOR POINTS • • • • • • • • • • • •

W. L. Gore depends on continuous innovation.

Gore uses the flat lattice system.

There is no assigned authority, few job titles, no chains of command, and no predetermined channels of communication.

With a company size of about 8,000 associates, Gore has found the lattice system is most effective with plants no larger than 150 to 200 associates.

Associates work on the projects that they believe are most worthy of their time.

Leaders emerge rather than being appointed.

If new hires are required on a project, the team does the interviewing and hiring.

A new associate is assigned a sponsor who is also part of the project.

The team becomes successful because they make sure that individual members are successful.

Seniority and education do not count.

Associates’ contributions are reviewed annually by other associates, and they are compensated on how much they contribute to the firm.

All associates, both salaried and non-salaried, are offered a stock option plan and profit sharing.

QUESTIONS 1. How does Gore empower teams by empowering individual associates?

Answer: Teams are empowered by allowing them to form based on the interests of the associates. As the team develops, leaders emerge as they acquire followers who are also interested in working on the project. The team acquires its members from within Gore and can bring in associates from outside the company. The team becomes successful because it makes sure that individual members are successful. Through the process of a team deciding on who will be its members and evaluating the members based upon their contributions, the team and its members become empowered.

2. What is the lattice system of organization?

Answer: The lattice system at Gore is based upon the writings of Douglas McGregor and his ideas of Theory Y management. In the lattice system there are few job titles, no chains of command, and no predetermined channels of communication. The system uses sponsors rather than managers and associates rather than employees. Associates’ evaluations, made by their peers, are based upon their contributions. This has created a company that has a free flow of knowledge and a structure that stimulates communications.

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3. Do additional research on Theory Y and Theory X. 4. Do you think other companies could use these managerial strategies and structures? Or is this something unique to Gore?

5. Using the latest edition of Fortune’s “100 Best Companies to Work For in America,” find out what is Gore’s current ranking. See Fortune’s web site at www. money.cnn.com/magazines/fortune.

6. You can find additional information on Gore’s lattice system and management at the company's Web site, www.gore.com.

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Review Questions 1. What are the objectives of laboratory training?

Answer: Laboratory training or learning provides insight into personal behavior and how one affects others. The goal is for participants to develop self-insight and awareness, to increase sensitivity to one’s effect on others, and to bring to the surface data on one’s blind spots and hidden areas. The laboratory provides a safe climate away from the work organization where participants can try new behaviors and receive candid feedback from others on the effectiveness of those behaviors. Participants can then take back to their work new ways of behaving and working with others.

2. Identify and explain the four areas of the Johari Window Model.

Answer: 1. The public area - includes behavior, thoughts, and feelings that both the person and others know.

2. The blind area - represents aspects of the self not known to oneself, but readily apparent to others.

3. The closed area - involves behavior, thoughts, and feelings known only to oneself but not to others. For others to become aware of this area, it must be disclosed by the person.

4. The unknown area - the behavior and feelings that are inaccessible both to oneself and to others.

3. How can you use the Johari Window Model as a tool to understand interpersonal communications?

Answer: Most organizations find that poor communication is the most important problem preventing effectiveness. The model presents a technique for identifying interpersonal communication style. It shows an individual the extent they are willing to receive feedback and disclose information about themselves. By enlarging the public area, an individual behaves in less defensive ways and becomes more open and trusting. Others will tend to react toward him/her with increased openness and trust.

4. What is the interrelationship between the Johari Window Model and laboratory learning?

Answer: The ideas of the Johari Window can be used with laboratory learning to help participants understand their effect on others (disclosure) and how their behavior comes across to others (feedback).

5. Explain how transactional analysis can help you better understand your communication patterns.

Answer: TA is a way for people to understand themselves better and to improve their communication and interpersonal relation skills. TA provides a model for analyzing and understanding human behavior using terminology familiar to many people.

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6. Explain the steps in a career life planning program.

Answer: Step 1 Each person independently prepares a list of career life goals that usually includes career, professional, personal, and relational goals (list 1).

Step 2 Working in pairs, the practitioner (partner) then goes through the list, reality testing (are goals realistic?), helping set priorities, and looking for conflicting goals.

Step 3 Each person makes a list of important accomplishments or happenings, including peak experiences and satisfactions (list 2).

Step 4 The practitioner then works through a comparison of the individual’s goals (list 1) with the list of achievements (list 2), looking for conflicts or differences between the two lists. The practitioner points out the differences to his or her partner. Each person prepares a new list of goals with relative importance of the goals (list 3) based on working with the practitioner.

Step 5 Each person prepares a detailed plan of action specifying how to get from where he or she is to where the goals show that he or she would like to be.

7. Identify and explain stress management interventions.

Answer: A stress management intervention is any activity or program that attempts to reduce the cause of work-related stresses or helps individuals to cope with the negative outcomes of exposure to stress. Stress management interventions include: Wellness programs – physical fitness, nutrition counseling, and smoking cessation.

Relaxation techniques - Biofeedback and meditation are commonly used relaxation techniques.

Career life planning – usually a seminar or training program in a one-to-one or group session.

Stress management training - may include instruction in time management, goal setting, delegation, counseling of subordinates, self-awareness, relaxation techniques, and conflict resolution.

Seminars on job burnout - Seminars to help employees understand the nature and symptoms of job problems.

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KEY WORDS AND CONCEPTS Define and be able to use the following words and concepts: Biofeedback - instruments take brain wave, heart, temperature and muscle readings which enable people to see and control nervous system reactions and stress. (pg. 237) Career life planning - matching career and life goals. (pg. 233) Complementary transaction – occurs when a message sent from one ego state receives an expected response from the other person’s appropriate ego state. (pg. 230) Crooked stroke – has a double meaning. It transmits a message different from the words that a person uses. (pg. 230) Crossed transaction - occurs when a message from one ego state receives a response from an inappropriate or unexpected ego state. (pg. 230) Disclosure - used in Johari Window model to enlarge public area vertically. The process of communicating one’s feelings, thoughts, and candid feedback to others. (pg.

228) Ego states - the three separate sources of behavior used in Transactional Analysis used to describe Parent, Adult, and Child feelings, attitudes, and behaviors. (pg. 228) Empowerment - delegates power and decision making to lower levels and to engage all employees so that people develop in themselves a sense of pride, self-respect, and responsibility. Engages all employees to develop and responsibility. (pg. 223) Fade out - occurs in laboratory learning programs when participants return to their work organizations. Back at work support is often lacking for participants’ new ways of behaving. (pg. 226) Feedback - the behavioral process used to enlarge the public area horizontally allows one to reduce the blind area. (pg. 228) Job burnout - emotional exhaustion and reduced accomplishment that can occur among individuals who do people work of some kind. A response to the chronic emotional strain of dealing extensively with other human beings who are troubled or having problems. (pg. 235) Johari Window Model - a model for identifying communication style where four areas of knowledge about the self are identified: public, blind, closed, and unknown. (pg. 227) Laboratory learning - simulated situations allowing for evaluation and reactions to others. Uses a group as a laboratory for experimenting, learning, and discovering causeand-effect relations in interpersonal communication. (pg. 225) 146

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Meditation - a commonly used relaxation technique where the user repeats a specific sound called a mantra during two 20-minute sessions a day. (pg. 237) Negative strokes - sometimes called cold prickles in TA terms. Results in an unexpected, unreassuring response with a “You’re not OK” feeling. (pg. 230) Positive strokes - in TA language, warm fuzzies. Transactions that provide an expected response and reassure a person’s worth, esteem, or competency: “You’re OK!” (pg.

230) Psychological positions - feelings based on one’s previous experiences lead to positions toward oneself and others. The positions are I’m OK, you’re OK; I’m OK, you’re not OK; I’m not OK, you’re OK; and I’m not OK, you’re not OK. (pg. 231) Psychosocial system - includes the network of social relationships and behavioral patterns of members, such as norms, roles, and communication. (pg. 224) Stress - the interaction between an individual and the environment characterized by emotional strain affecting a person’s physical and mental condition. (pg. 234) Stress management intervention - methods such as biofeedback, wellness, career counseling to help an individual deal with personal and work related stress. (pg. 236) Stressors - events that create a state of disequilibrium within an individual. (pg. 234) Stroking - a concept in TA theory referring to a form of recognition, including physical, verbal, or visual recognition, of one person by another. (pg. 230) Structural analysis - used to understand the three ego states: parent, adult, and child. (pg. 228) Transaction - an interaction between people involving a communication between their ego states. The basic unit of communication classified as complementary, crossed, and ulterior. (pg. 229) Transactional analysis - (TA) an interpersonal relationship model that OD practitioners apply in organization change programs as a way for people to understand themselves better. (pg. 228) Ulterior transaction - involves two ego states simultaneously: the literal words of the transaction, which may mean one thing, and the underlying intent, which may mean something entirely different. (pg. 230) Wellness programs - stress reduction programs initially associated with physical fitness, nutrition counseling, and smoking cessation. (pg. 236)

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ADDITIONAL RESOURCES Readings: Black, J. Stewart and Hal B. Gregersen, It Starts with One, Changing Individuals Changes Organizations, (Upper Saddle River, N.J.: Wharton School Publishing, 2008).

Hamel, Gary, The Future of Management (Boston, MA: Harvard Business School Press, 2007).

Hirotaka Takeuchi, Emi Osono, and Norihiko Shimizu, “The Contradictions that Drive Toyota’s Success,” Harvard Business Review, June 2008, p. 98.

Mathieu, John E. and Lucy L. Gilson, “Empowerment and Team Effectiveness: An Empirical Test of an Integrated Model,” Journal of Applied Psychology, vol. 91, no. 1 (January 2006), pp. 97–108.

Video: Driving Miss Daisy, 1989, Warner Home Video (DVD). It is the story of the relationship between an elderly Jewish woman (Jessica Tandy) and her African-American chauffer (Morgan Freeman) in the U.S. South. The movie can be used as a tool for viewing some of these issues: The driver, Hoke Colburn, can be viewed as a practitioner. He is employed by the son (Dan Aykroyd), but who is his client? Does his character follow the characteristics of a process practitioner and, if so, how? Does he confront Miss Daisy at the appropriate times? And does he back-off and console appropriately? Trace the changes in the Johari Windows for Miss Daisy and Hoke through the movie.

Additional Simulation An additional simulation that is not in the textbook follows on the next page:

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OD Skills Simulation The Microlab Total time required: approximately 2 ½ hours.

A. Purpose The microlab is used to demonstrate or provide insight into how laboratory training may be used as a technique for personal growth or organization development. It also provides an opportunity for experiencing the dynamics of a group in a brief period.

B. Procedures Step 1. Form groups of 10 to 12 members each, with one facilitator per group.

Step 2. Start microlab on the following schedule. Usually, the facilitator provides a brief introduction stating the goals and purpose of the microlab.

Step 3. 10 minutes—total group (12 people). Participants are to focus on awareness of their own feelings, group processes, and the here-and-now situation.

Step 4. 2 minutes—dyads to process what went on in the total group. The participants pair off to share feelings and discuss what they saw happening in the group. (This may give participants points to discuss in the next group session). In the dyads, participants are to: 1. Share their feelings (i.e., I felt uncomfortable).

2. Share perception of other’s behavior (i.e., You talked a lot, or you looked very relaxed).

3. Share perception of group process (i.e., I felt Gene was trying to dominate the group).

Continue as follows: 10 minutes—T-groups (12 people) 2 minutes—dyads 10 minutes—subgroups (6 people) 2 minutes—dyads (new partners within subgroups) 10 minutes—T groups 2 minutes—dyads (new or old partners) 10 minutes—subgroups 2 minutes—dyads 10 minutes—T groups 2 minutes—dyads (new partners) (As the interaction increases, times may be increased to 15 minutes for the total group and 5 minutes for dyads.)

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Step 5. Process Analysis—a discussion of the microlab.

1. What were your reactions to the microlab experience?

2. What did you learn?

3. How did you feel it went? (Was it successful?)

4. How might this technique be used as an OD intervention?

Time suggested for Step 5: 15 minutes (Although there are many microlab designs, this is based upon the ideas of James Clark, formerly of UCLA.)

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SIMULATION PROCEDURES Simulation 9.1 (pg. 240) SACOG 1. Student premeeting preparation: a. Read SACOG background information, your role description, and become familiar with the observer forms. Complete Step 1.

2. Suggestions: a. Depending on the motivation of the class up to this chapter, I may have students complete and turn in the SACOG Decision Form. I post the results on the classroom bulletin board. b. There is a suggested correct answer to the problem based on members sharing material in the simulation. The answer provided is open to interpretation and the group’s answer will reflect the personalities and values of the participants. c. Participants should read only their role description. Emphasize that participants share information about their ideas in a conversational manner in the role-play and they should be discouraged from reading aloud their role descriptions. d. The dynamics of the simulation can usually be increased by keeping a time record of when each group completes the project. This may help point to the “real world” competition between groups and emphasize the need for departmental collaboration to arrive collectively at a correct answer.

3. Discussion points: a. Examine the internal behaviors of the various groups, especially between the first and last groups to complete the simulation. b. Sharing of information between members; competition and collaboration. c. Optimization of departmental improvement (to get money) at the expense of organization goal attainment. d. Look at the Johari Window and transactional analysis as tools for understanding member and group behavior.

4. Solution: a. See the solution sheet at the end of this section. b. Try to downplay the correct answer to the simulation as it is open to interpretation. Emphasize the simulation should be used as a vehicle for exploring and learning more about individual behavior in work teams.

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5. Total time suggested: 60 minutes You will need to adjust these times to fit your specific schedule and class plans.

Step 2 Step 3 Step 4

Minutes 30 15 15

Total

60

Notes

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Answer to SACOG The correct answer as judged by a number of managers in a survey is the Alcohol Education Rehabilitation area. This area meets the six criteria used for selection. Though some areas are well qualified for selection, the Alcohol Education and Rehabilitation area better meets the qualifications as described in the role descriptions.

A brief justification follows: Job Training and Education - High unemployment rate, particularly among minorities.

Minorities reluctant to accept services. Facilities not located in rural areas.

Drug Abuse - Facilities concentrated in the three larger towns. A large minority population living in rural areas is not served.

Marriage and Family Counseling - Facilities geared to handle a larger usage but people reluctant to use services. Getting people to come in for assistance seems to be a major problem which will effect future results.

Mental Health - Facilities not located in outlying areas. Minorities tend not to use services although a study indicates few mental problems among minorities.

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Simulation 9.2 (pg. 246) Johari Window 1. Student premeeting preparation: a. If analyzing a case, read the case before coming to class.

2. Instructor premeeting preparation: Review the scoring procedures.

3. Discussion points: a. b. c. d.

Did I recognize blind areas in others? In myself?

Did I self-disclose any closed areas? Did others?

How honest was I with others in giving them feedback?

What determines the extent to which we will give others feedback?

4. Total time suggested: 60 minutes You will need to adjust these times to fit your specific schedule and class plans.

Step 1 Step 2

Minutes 25 25

Total

50

Notes

Simulation 9.3 (pg. 251) Career Life Planning 1. Student premeeting preparation: a. Lists 1 and 2 (Steps 1 and 2) can be completed prior to class.

2. Suggestions: a. This simulation can be very meaningful for both the younger students and those students with more experience. When undertaken seriously by the students, it can result in the public area of their Johari Window being 154

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enlarged. As a result, it can be a threatening simulation and requires risktaking on the part of the participants. Stress that the information shared by participants during the simulation be considered confidential.

3. Discussion points: a. Discuss that the process of sharing information about career life goals increases the public area of their Johari Window. b. The information shared during the simulation is confidential and this is often similar to situations in which an OD practitioner will encounter.

The information obtained in a session should not be used in the future with the client as leverage or “extortion” to bring about change. The long-range cost will be a loss of credibility with the client. c. Did the participants gain perspective on the congruence of goals and accomplishments? d. Was the feedback valuable?

4. Total time suggested: 60 minutes You will need to adjust these times to fit your specific schedule and class plans.

Step 3 Step 4 Step 5

Minutes 25 15 20

Total

60

Notes

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CASE TEACHING NOTES The Sundale Club (pg. 253) I. Problems A. Macro 1. Division within organization due to poor relationships among personnel.

2. Lack of leadership and direction within organization.

B. Micro 1. Johnson’s (reputed) behavior.

2. Loss of members.

3. Chain-of-command difficulties: Frank Havens unable to talk to boss, Bob Watts uninterested in problem.

4. Poor staff morale; treatment of Pat indicates problem.

II. Causes 1. No recognition/follow-through for staff. Pat overlooked for promotion.

2. Personal relationship between Chuck Johnson and Ted Ellis detracts from goals of organization and from staff morale.

3. Bob’s upcoming retirement detracts from interest in problems.

III. Systems affected 1. Structural - personal relationships and director’s lack of interest hurt chain-ofcommand effectiveness.

2. Psychosocial - low morale within staff due to favoritism, disinterest, loss of membership, lack of direction of system.

3. Technical – none apparent.

4. Managerial - organization’s purpose and source of money undermined by personal interests and lack of direction. Managers who had authority, such as Bob Watts, are unwilling to take action.

5. Goals and values – there is no sense organization goals among management or staff despite declining membership. Staff and even some managers are increasingly interested in protecting their jobs or finding another job elsewhere.

Consequently, there is little concern for providing service to the membership.

IV. Alternatives 1. Leave as is.

2. Let Bob Watts retire; explain problem to new director.

3. Unite staff (as Carol has started); include in meeting with new director/board.

4. Carol Happ hire OD practitioner to intervene and unite staff, but this will be difficult as Watts seems to be “coasting” until retirement.

V. Recommendations Realistically, not much can happen until Bob Watts retires. Before Watts retires, some of the staff could unite under the leadership of Carol Happ and meet with Bob. But this has definite risks, particularly for any staff under Ted Ellis. Approach Watts from viewpoint of helping increase memberships and how unity, etc., is needed for this to occur. If Happ and the staff can gain Watts’ support, hire an external OD practitioner.

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STUDENT PREPARATIONS FOR THE NEXT CHAPTER 1. Read Chapter 10.

2. Prepare for OD Skills Simulation 10.1. Prior to class, form teams of six and assign roles. Complete Steps 1 and 2.

3. Complete Step 1 of OD Skills Simulation 10.2 after finishing OD Skills Simulation 10.1.

4. Read and analyze Case: Steele Enterprises.

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Chapter 10

Team Development Interventions

Learning Objectives 1. Identify how team development techniques fit into an OD program.

2. Recognize team problems and why teams may not be operating at optimum capacity.

3. Experience the process of team development.

Student Premeeting Preparation 1. Read Chapter 10.

2. Prepare for OD Skills Simulation 10.1. Prior to class, form teams of six and assign roles. Complete Steps 1 and 2.

3. Complete Step 1 of OD Skills Simulation 10.2 before class but after finishing OD Skills Simulation 10.1.

4. Read and analyze Case: Steele Enterprises.

Instructor Preparation and Materials 1. Simulations: Duplicate the answer sheet for Simulation 10.1 to hand out in class. It is located in the Simulation Procedures section.

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LECTURE OUTLINE 1) Learning objectives. (p. 261) a) Identify how team development techniques fit into an OD program. b) Recognize team problems and why teams may not be operating at optimum capacity. c) Experience the process of team development.

2) Organizing around teams. (p. 261) a) A team is a group of individuals with complementary skills who depend upon one another to accomplish a common purpose or set of performance goals for which they hold themselves mutually accountable. b) Teamwork is work done when the members subordinate their personal prominence for the good of the team. c) Many management theorists see the team-based organization as the wave of the future.

3) The team approach. (p. 262) a) Many organizations are attempting to increase productivity by implementing team-based programs. b) Interdependence refers to situations where one person’s performance is contingent upon how someone else performs. c) Baseball, football, and basketball provide some useful parallels for understanding the workings of teams in other types of organizations. i) Baseball is a game of pooled interdependence where team member contributions are somewhat independent of one other. ii) Football involves sequential interdependence. iii) Basketball exhibits the highest degree of interdependence. d) Organizations frequently use sport teams as a model. i) Some organizations require close teamwork similar to basketball, whereas other organizations require team involvement similar to baseball. ii) A production manager at P&G says that he sees a production team working similar to that of an ideal basketball team. e) One major OD technique is team building or team development. i) The terms team building and team development are used interchangeably. ii) Team building is where the members of a work group examine such things as their goals and culture to improve their ability to work together effectively and efficiently.

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f) Team building grew out of the application of laboratory learning, used principally during the 1950s and 1960s (see Chapter 9). g) There are several reasons for using team development to improve organizational effectiveness. i) The work group is the basic unit of the organization and provides a supportive change factor. ii) The operating problems of work groups are often sources of inefficiency.

4) The need for team development. (p. 264) a) Teams are the primary unit in an organization. b) There are two types of teams. i) Natural work team.

(1) People come together because they do related jobs.

(2) They also come together because of the structure of the organization’s design. ii) Temporary task team.

(1) Groups meet for limited periods to work on a specific project and disband after they solve it.

(2) There is an increasing need for collaboration and coordination of the resources that are brought together. c) The need for team development in an organization varies with the situation. d) Situations that require interaction tend to fall into three categories: (See Figure 10.1 - Situation Determines Teamwork) i) Simple.

(1) People working alone and no need to involve others.

(2) Little team development necessary. ii) Complex.

(1) Information must be shared in order to complete the task but interaction is not on a deeply personal nature.

(2) Some team development necessary. iii) Problem.

(1) Unusual and unprecedented situations having impact outside an individual’s scope of influence.

(2) Requires a team development approach. e) Operating problems of work teams include the following: (See Figure 10.2 Sources of Team Problems) i) Goals - groups lose their purpose and direction. ii) Member needs - interpersonal differences and conflicts. iii) Norms - lack of norms and acceptable behavior patterns. iv) Homogeneous members - Groups that are homogeneous tend to produce homogeneous ideas. v) Decision making - authoritative decision making. vi) Leadership - degree of power and control of members is inappropriate. vii) Size - number of members is too small or too large for effective interaction.

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5) Cohesiveness and groupthink. (p. 268) a) Group or team cohesiveness refers to the unity that the members of a group have for one another. b) A high degree of cohesiveness can be a problem for groups and results in groupthink. i) Groupthink is a deterioration of reality testing and moral judgment that results from group pressures. ii) Likely to happen when agreement becomes such a dominant force that it tends to outweigh consideration of alternatives. c) Eight characteristics of groupthink: i) Illusion of invulnerability. ii) Rationalization. iii) Illusion of morality. iv) Shared stereotypes. v) Direct pressure. vi) Self-censorship vii) Illusion of unanimity. viii) Mind guards.

6) The purpose of team development. (p. 269) a) It is to integrate the goals of the individual and the group with the goals of the organization. b) It involves the following: i) Identify objectives, set priorities. ii) Examine performance of team. iii) Analyze group process. iv) Improve communications. v) Improve problem-solving ability. vi) Increase cooperation. vii) Work more effectively with other teams. viii) Increase respect of other team members.

7) The team development process. (p. 271) a) Team development process involves 2 types of activities. i) Family group diagnostic meetings.

(1) Aimed at identifying group problems. ii) Family group team-building meetings.

(1) Aimed at improving the team’s functioning. b) Team development is one of the most widely used OD activities. c) A team development meeting has two objectives: i) The task or work agenda of the group.

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ii) The processes by which members work on the task. d) General procedure of a team development training meeting follows these steps: i) Step 1: Initiate the team development meeting.

(1) Need has been identified in previous stage of OD program or team’s manager.

(2) Members of the team discuss the degree to which they support team development and if a team is necessary given the work situation. ii) Step 2: Setting objectives.

(1) Team agrees on broad objectives of team development meeting.

(2) Pertinent questions to the work group include: (a) What is the purpose of the meeting? (b) Are the team members really interested and committed? (c) What does the team want to accomplish? iii) Step 3: Collecting data.

(1) Additional and more detailed information about the team is obtained through surveys, questionnaires, interviews, etc.

(2) The practitioner also may have a two- to four-hour pre–team development meeting with members. iv) Step 4: Planning the meeting.

(1) The agenda for the team development meeting is planned based on data collected and objectives.

(2) Planning includes logistics and resources required. v) Step 5: Conducting the meeting.

(1) Usually lasting several days, the team works through the objectives.

(2) The purpose is for the team to develop a specific action plan for improving the ways to reach its organization goals. vi) Step 6: Evaluating the team development process.

(1) Examines action items to determine those that are working and those that need further work. e) Results of team development meetings. i) Research finds that it is very effective and is a popular intervention used in many organizations. ii) Research found that team building to be the most effective OD intervention.

8) Outdoor experiential laboratory training. (p. 273) a) Sometimes called outdoor labs, wilderness labs, adventure learning, or the corporate boot camp. b) Takes a group of people who normally work with one another and place them in an outdoor setting where they participate in experiential exercises. c) The training seems to hasten discussions surrounding leadership styles, team work, and interpersonal relationships. d) The labs have participants involved in activities that require teamwork and allow opportunities to work on leadership and team development. e) The learning provides participants with insights into their leadership and Chapter 10 Team Development Interventions .

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interpersonal styles. f) After an exercise, the team and the consultant critique the exercise with an emphasis upon what they learned and how it applies to work g) The outdoor lab process. i) Specialized training companies typically offer outdoor labs. ii) An outdoor lab is part of a larger program that lays the groundwork for it and follows through after it has ended. iii) An assessment of the team is made prior to the training session. iv) An orientation meeting is held with participants at their normal work site. v) Lab exercises are selected that fit the goals and abilities of the team. vi) The team arrives at the training site and participates in exercises. vii) After an exercise, the trainers ask the team to reflect on the process. viii) Discussion centers around how they operated as a team, helpful and not helpful behaviors, risk taking, and leadership. ix) Before returning to the workplace, participants summarize what they have learned and how it applies to their work. x) At work, the team follows through with goal setting and plans for meeting goals. h) Cautions when using outdoor labs. i) Safety is a major concern. ii) Participation is voluntary. iii) Participants should have fun and labs not become too serious. i)

Results of outdoor labs. i) The labs have become very popular and widely used. ii) They are relatively new and need more research into their effectiveness. iii) Some initial research shows favorable results. iv) Should be part of a larger change program such as OD in order to be more effective.

9) Role analysis and role negotiation. (p. 276) a) Role analysis technique is designed to clarify role expectations by analyzing roles of team members. i) Role conception is the focal person’s ideas about appropriate behavior. ii) Role ambiguity refers to the team member not fully knowing what others expect. iii) Role conflict occurs when there is a difference between what is expected of a team member and the member’s actual behavior. iv) Role analysis is used to clarify role discrepancies. v) Steps in role analysis are: (1) Role analysis - role incumbent describes their role as they see it. Others may add or modify list.

(2) Role incumbent expectations of others - a list of role incumbent’s expectations of other group members is set forth. Others may add to or modify list.

(3) Role expectations - others list expectations of role incumbent.

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written summary. vi) The above steps are followed until each group member has completed a role profile. vii) Role profiles are periodically reviewed. b) Role negotiation looks at the work relationships among team members. i) It involves controlled negotiations between participants. ii) Directed at the work relationships among team members. iii) During the role negotiation, managers discuss what they want from one another and explain why. iv) Steps in role negotiation are: (1) Contract setting - each member makes a list for every other member with three items: things to do more, things to do less, things to do the same.

(2) Issue diagnosis - each member makes a master list that combines all the things that others have written about him/her.

(3) Role negotiation - members decide which items they want to work on most and form into pairs to negotiate.

(4) Written role negotiation agreement - outcome is a written role negotiation of agreement between members.

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OD Applications Virtual Teams (p. 263) SUMMARY Virtual team meetings use advance technology to electronically bring people together to collaborate and share ideas.

MAJOR POINTS • • • • • •

Virtual team meetings have been occurring in some form since the beginning of the Internet.

Advancements in software and technology to conduct meetings has made meetings seem more life-like.

GE has change the way it works with its 340,000 worldwide employees, its suppliers, and customers.

Advanced telepresence systems use an array of large high definition monitors, video cameras, and high speed communication lines.

P&G uses telepresence to bring together divisions in different parts of the company so that they can collaborate with one another to come up with new products.

Some of the reasons for the growth in telepresence are: expensive air travel, fast pace that organizations must operate to be competitive, technology becoming more advance and less expensive, and employees comfortable with new technologies.

QUESTIONS 1. Compare the methods used at GE, P&G, and other companies to promote virtual teams.

Answer: GE and P&G use telepresence technology in a similar manner. Both companies operate in a highly competitive and worldwide environment where they must act quickly to market and economic conditions. Telepresence allows them to bring people together to work on common projects without the delay of days that physical meetings require.

2. What do you see as the advantages and disadvantages of virtual meetings?

Answer: For companies (including their suppliers and customers) who are located in multiple places, virtual meetings allow interested groups to meet quickly. The advantages include reduce costs of air travel and employee costs involved with traveling. In addition, organizations can act more quickly in moving projects and products to markets. The disadvantages include less human interaction which may especially be an issue for people who are not experienced with electronic communication. More subtle forms of communication such as some nonverbal signals may be missing.

3. Visit the Web sites of HP at www.hp.com and search for Halo and Cisco at www.cisco.com and search for TelePresence to research current information on telepresence technology.

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Groupthink at the White House (p. 269) SUMMARY Janice Irving research and writings in groupthink frequently used major foreign policy mistakes as examples. Leading up to and soon after President Barack Obama took office, he used the term “groupthink” in at least three news conferences that included references to avoiding the mistakes of groupthink.

MAJOR POINTS • • • • • • •

Janis Irving did extensive research into groupthink during his 40 years at Yale University His books on groupthink looked at recent and major U.S. foreign policy fiascoes like the attack on Pearl Harbor, the Bay of Pigs, and the escalation of the Vietnam War. President Obama seemed to be aware of the term and the research that surrounded it regarding the making of previous foreign policy.

He used the term several times at news conferences just before and soon after taking office.

November 26, 2008: “The walls of the echo chamber can sometimes keep out fresh voices and new ways of thinking. You start engaging in groupthink.”

December 1, 2008: “One of the dangers in the White House, based on my reading of history, is that you get wrapped up in groupthink and everybody agrees with everything and there’s no discussion and there are no dissenting views.”

February 6, 2009: “I'm not interested in groupthink, which is why the board reflects a broad cross-section of experience and expertise and ideology.”

QUESTIONS 1. Does groupthink play a part in teams and work groups of other types of organizations than governmental policy making groups? Support your position.

2. Try to cite personal examples of groupthink.

EcoSeagate and Team Development (p. 274) SUMMARY Each year Seagate Technology brings together 200 of their employees from around the world on a $2 million outdoor lab experience.

MAJOR POINTS •

The lab, called EcoSeagate, is where they hold team development sessions in the desolate mountains and glaciers of New Zealand.

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• • • • • • •

CEO Watkins started the outdoor labs with the belief that if he showed the value of teamwork away from work, participants would transfer the experience back into their work.

Participants come from a cross section of the company.

Teams are composed of five people and made in advance.

Composition is based on having a mix that includes physical ability, level within the company, sex, nationality, and personality.

The lab takes place over five days where teams go through competitive events that encourage each team to learn how to work together.

CEO Watkins has no quantitative results of the outdoor labs and has received criticism from stockholders for the event.

He says, “The only thing you know for sure is that if you do nothing, then nothing will happen, and nothing will change.”

QUESTIONS 1. What is your opinion of EcoSeagate?

2. Should the CEO attempt to quantify the results? And if so, how? Support your position.

3. Would your class teams benefit from this type of training? How?

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Review Questions 1. Identify the characteristics of an effective team. Is a golf team really a team, or just a group?

Answer: Characteristics included cooperation, teamwork, and effectiveness in accomplishing goals by involving participation from all. In effective teams, members are open and honest with one another, there is support and trust, there is a high degree of cooperation and collaboration, decisions are reached by consensus, communication channels are open and well developed, and there is a strong commitment to the team goals.

2. Identify and give examples of ways of increasing team effectiveness.

Answer: Examples are open communication, clarity of goals, room for input from all, satisfaction of members. One major OD technique, termed team building or team development, is used for increasing the communication, cooperation, and cohesiveness of units to make them more productive and effective.

3. Identify the symptoms of groupthink. Explain how groupthink can be avoided through team development.

Answer: Symptoms are illusion of invulnerability, rationalization, illusion of morality, shared stereotypes, direct pressure, self-censorship, illusion of unanimity, and mindguards.

Groupthink can be avoided through team development by being aware of group processes, improved communications and relationships among members, encouraging dissenting opinions, identifying objectives, increasing respect for others, and improving problemsolving ability of groups.

4. Select an example of groupthink occurring in an organization and critique the results and consequences to that organization. This could be an organization that is familiar to you or one that you have researched.

5. Identify the six steps in the team development process.

Answer: Initiate the team development meeting, set objectives, collect data, plan the meeting, conduct the meeting, and evaluate the process.

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KEY WORDS AND CONCEPTS Define and be able to use the following words and concepts: Group cohesiveness - the attractiveness a group has for its members. (p. 268) Groupthink - describes the problems of group cohesiveness. Refers to a mode of thinking that people engage in when they are deeply involved in a cohesive in-group and when the members striving for unanimity override their motivation to realistically appraise alternative courses of action. (p. 268) Interdependence - situations where one person’s performance is contingent upon how someone else performs. (p. 262) Natural work team - people coming together because of the related jobs or the structure of the organization design. (p. 264) Outdoor experiential laboratory training - takes a group of people who work together, place them in an outdoor setting, and allows them to experiment and discuss leadership styles and teamwork. (p. 273) Role ambiguity - the role incumbent’s being unaware of or lacking sufficient knowledge of the expectations of others. In other words, he or she does not fully know what others expect. (p. 277) Role analysis - a team development method for clarifying role expectations. Role analysis is used to clarify such role discrepancies, leading to improved group cohesiveness and functioning. (p. 276) Role conception - the person’s own ideas about appropriate role behavior. (p. 277) Role conflict - discrepancy between role conception and others’ expectations. (p. 277) Role expections - the behaviors expected or prescribed for one member of the team by the other team members. (p. 277) Role negotiation - an OD team building technique that is directed at the work relationships among group members. The technique involves a series of controlled negotiations between participants. During the role negotiation, managers discuss what they want from each other and explain why. (p. 277) Team - a group of individuals who depend upon one another to accomplish a common objective. (p. 261) Team building - also called team development. Is a data based intervention where a work group examines such things as their goals, structure, procedures, culture, norms, and interpersonal relationships to improve their ability to work together effectively and efficiently. (p. 262) 170

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Team development – also called team building. See team building. (p. 262) Teamwork - work done by members, all subordinating personal prominence for the good of the team. (p. 261) Temporary task team - refers to groups meeting for limited periods of time to work on a specific project of problem, and after the solution of the problem they disband. (p. 264)

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ADDITIONAL RESOURCES Readings: Bennis, Warren, “The End of Leadership: Exemplary Leadership Is Impossible Without Full Inclusion, Initiatives, and Cooperation of Followers,” Organizational Dynamics, vol.

28, no. 1 (Summer 1999), pp. 71–80.

Hamel, Gary, “Break Free,” Fortune, October 1, 2007, pp. 119-26.

Lencioni, Patrick, The Five Dysfunctions of a Team: A Leadership Fable, (San Francisco: Jossey-Bass, 2002).

Thompson, Leigh L., Making the Team, A Guide for Managers, (Upper Saddle River, NJ: Pearson Education, Inc., 2008).

Video: Thirteen Days. (2000, New Line Cinema) This docudrama is an account of the Cuban Missile Crisis in October 1962. The movie is based on The Kennedy Tapes: Inside the White House During the Cuban Missile Crisis. and not Robert Kennedy’s book, Thirteen Days. The movie focuses upon the decision-making process when a group is confronted with a complex and highly important problem. The movie alludes to the Bay of Pigs fiasco (invasion of Cuba), which was used as an example by Irving Janis in his writings on groupthink. Several key decision makers, including President Kennedy, mention that they cannot make the same mistakes they made planning for the Bay of Pigs invasion.

There are excellent examples of the operation of subgroups and the techniques they use to pressure the President to accept their position.

North Dallas Forty. (1979 / DVD available) Quotes from the book were used in the chapter and the movie also looks at issues of teamwork. Several students could be assigned to read the book and give a brief report to the class.

Twelve Angry Men looks at decision making within teams. The movie provides opportunities to observe groupthink and problems of group cohesiveness. Twelve Angry Men is an old black and white movie (1957 / VHS and DVD) but it is a classic that is often used by consultants in OD team building training. The movie has been remade as a TV movie (1997 / VHS) and is also available.

Guest Speaker: A coach of a football, basketball, etc. team could speak to the class about teamwork, its importance, and how teamwork is built.

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SIMULATION PROCEDURES Simulation 10.1 (p. 279) Organization Task and Process 1. Student premeeting preparation: a. Complete Step 1 by forming teams of six members and selecting roles the preceding class period. Also, complete Step 2.

2. Suggestions: a. Emphasize there is only one correct solution. b. Forty-five minutes is usually long enough to reach a decision and still retain some time pressures. c. Duplicate the answer sheet found below. d. Upon completion of the simulation, we have students turn in the Energy International Decision Form to be posted on the classroom bulletin board.

3. Discussion points: a. Examine extent to which the groups use resources effectively. b. Usually groups get very involved in this simulation, often loosing sight of process issues. c. This simulation also sets the foundation for Simulations 10.2 and 10.3.

4. Answers: a. The answer sheet follows on the next page.

5. Total time suggested: 70 minutes You will need to adjust these times to fit your specific schedule and class plans.

Step 3 Step 4 Step 5

Minutes 45 10 15

Total

70

Notes

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ENERGY INTERNATIONAL PROBLEM SOLUTION Name

Age

Education

Nationality

Experience

American

Language Spoken Portuguese

Illin

35

Hule

42

Gadolin

41

Samar

33

Lute

36

Noddy

43

Lanta

36

N.Y. School of Mines N.M. Inst. of Earth Science N.Y. School of Mines Mass. Inst. of Sciences N.Y. School of Mines St. Francis University Mass. Inst. of Sciences

American

Portuguese

7 years

American

Portuguese

6 years

American

Portuguese

5 years

American

No Portuguese Portuguese

9 years

American Canadian

2 years

14 years 4 years

The New Mexico Institute of Earth Sciences and St. Francis University require three special subjects for graduation and are therefore smaller than the Massachusetts Institute of Sciences or the New York School of Mines. St. Francis is not the smallest; therefore, the New Mexico Institute of Earth Sciences must be. This makes N.M.I.E.S. a women’s university. Brazilians hold a feudal attitude toward women.

Seismology and paleontology are essential for General Membership. St. Francis does not offer seismology; therefore, no graduate of St. Francis can qualify for General Membership.

None of the Brazilian staff understands English, nor do the government inspectors; therefore, before the General Manager can countersign the inspector’s report, he must be able to read Portuguese.

Each candidate except Gadolin is disqualified because he lacks the qualifications outlined.

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Simulation 10.2: Team Development (p. 285) and Simulation 10.3: Role Analysis Team Development (p.

288) Simulation 10.1 needs to be completed before doing either Simulations 10.2 or 10.3.

Review both of the simulations and determine which one will best meet the needs of your class. Both simulations are not intended to be used, although if you want to emphasize team development both simulations could be used.

Simulation 10.2 (p. 285) Team Development 1. Student premeeting preparation: a. If required by time constraints, students can complete the Team Development Profile and the Decision Critique Form in Step 1.

2. Suggestions: a. Encourage students to focus on becoming more effective versus fault finding.

3. Discussion points: a. Issues of leadership, authority, communication, interdependence, etc.

4. Total time suggested: 80 minutes You will need to adjust these times to fit your specific schedule and class plans.

Steps 1 and 2 Step 3 Step 4 Step 5 Total

Minutes 30 20 15 15 80

Notes

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Simulation 10.3 (p. 288) Role Analysis Team Development 1. Student premeeting preparation: a. None.

2. Suggestions: a. Encourage students to focus on becoming more effective versus finding fault.

3. Discussion points: a. Issues of leadership, authority, communication, interdependence, etc.

4. Total time suggested: 80 minutes You will need to adjust these times to fit your specific schedule and class plans.

Steps 2 through 4 Step 5 Step 6 Total

Minutes 50 15 15 80

Notes

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CASE TEACHING NOTES Steele Enterprises (p. 289) I. Problems A. Macro 1. Lack of communication between departments and from the top down.

2. Role conflict.

3. Competition rather than cooperation.

B. Micro 1. How to resolve and prevent personal disputes between Dick and Donna.

II. Causes 1. Dick and Donna do not seem to be aware of their respective assignments.

2. Role ambiguity exists between Dick and Donna. There is a lack of clarification regarding roles and duties.

3. Possible “personality conflict” between Dick and Donna.

III. Systems affected 1. Structural - there is a clear organization structure defining the Chemical and Mechanical departments.

2. Psychosocial - the behavior of Dick and Donna is disruptive and may soon filter down to other people in their departments.

3. Technical – none apparent.

4. Managerial - the management structure between Gene and his two subordinates, Dick and Donna, is degenerating into a fighting match with Gene as the referee.

5. Goals and values – Dick and Donna do not give indications of valuing teamwork and seem to be more interested in competing with one another.

IV. Alternatives 1. Gene can transfer either Dick or Donna so they will not be in contact with one another.

2. Gene can make sure assignments given to Dick and Donna do not overlap. Also, Gene can reduce contact between the two.

3. Undertake team development training initially between Gene, Dick, and Donna.

With time, bring in members of their departments. Perhaps consider an outdoor lab.

V. Recommendations Team development as explained in three above.

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STUDENT PREPARATIONS FOR THE NEXT CHAPTER 1. Read Chapter 11.

2. Prepare for OD Skills Simulation 11.1. Read and familiarize yourself with the rules and procedures of the Disarmament Game. Complete Step 1.

3. Read and analyze Case: The Exley Chemical Company.

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Chapter 11

Intergroup Development

Learning Objectives 1.

2.

3.

4.

Identify problems of intergroup conflict and suboptimization.

Experience the negative effects of competition on organization effectiveness.

Observe and develop strategies for collaborative intergroup relations.

Diagnose the causes of cooperative versus competitive group relations.

Student Premeeting Preparation 1. Read Chapter 11.

2. Prepare for OD Skills Simulation 11.1. Read and familiarize yourself with the rules and procedures of the Disarmament Game. Complete Step 1.

3. Read and analyze Case: The Exley Chemical Company.

Instructor Preparation and Materials 1. Simulations: Simulation 11.1 The Disarmament Game is involved and the rules are complicated. Review the rules carefully as you will likely have to answer questions.

See the “Instructor premeeting preparation” and “Suggestions” material in the Simulation 11.1 section of this instructor manual for more information.

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LECTURE OUTLINE 1) Learning objectives. (pg. 294) a) Identify problems of intergroup conflict and suboptimization. b) Experience the negative effects of competition on organization effectiveness. c) Observe and develop strategies for collaborative intergroup relations. d) Diagnose the causes of cooperative versus competitive group relations.

2) Changing relationships in today’s organizations. (pg. 294) a) Managers are concentrating their efforts on shared responsibilities among work teams. b) Organizations create situations of team interdependence where the performance of one group is contingent upon another group. c) People and groups often fail to cooperate with others and may be in open conflict. d) One set of OD interventions aims specifically at improving interdepartmental interfaces and intergroup operating problems. e) These OD interventions aim at developing effective working methods between teams.

3) Collaboration and conflict. (pg. 296) a) An organization, consisting of departments and divisions, requires cooperation to be effective. b) However, differences in objectives, values, efforts, and interests occur between groups. c) It is inevitable that conflict and competition between groups will occur. d) The dysfunctional nature of the conflict can be reduced with an emphasis placed on collaboration and cooperation. e) Boundaryless is a term that describes General Electric’s approach to maintaining collaboration between divisions and subscribing to interdependent teams. f) Dysfunctional conflict is reduced through intergroup interventions.

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a) Conflict between groups depends on how incompatible the goals are, the extent to which required resources are scarce and shared, and the degree of interdependence of task activities. (See Figure 11.1 - Factors Involved in the Potential for Conflict) b) Suboptimization occurs when a group optimizes its own subgoals but loses sight of the larger organizational goals. c) Intergroup competition involves groups with conflicting purposes or objectives. d) Perceived power imbalance between groups occurs where there is a perceived imbalance between units or when previously established relations are altered. e) Role conflict and role ambiguity. i) Role conflict occurs when an individual belongs to two or more groups whose goals are in conflict. ii) Role ambiguity exists when an individual of a group is not clear about his/her functions, purposes, and goals. f) Personality conflict arises from interpersonal differences between members.

5) Cooperation versus competition. (pg. 299) a) Though competition is often perceived to be beneficial, the research results of competition and cooperation among groups is mixed. b) Members of competitive groups have more self-esteem for their groups. c) Groups competing with one another are more highly oriented toward accomplishing the task, but there is a lack of evidence that competition will increase productivity. d) Research indicates that cooperation promotes productivity between groups when the task is complicated and requires coordination.

6) Managing conflict. (pg. 300) a) Organizational conflict does not need to be eliminated but instead managed. b) Diagnosing conflict situations involves learning the basic conflict styles used in dealing with interpersonal or intergroup conflict. c) Conflict styles are based on 2 dimensions: (See Figure 11.3 - Conflict Styles) i) Desire to satisfy self. ii) Desire to satisfy others. d) Five styles represent the different levels of cooperative versus assertive behavior: i) Avoiding - low concern for both self and others. ii) Obliging - low concern for self and high concern for others.

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iii) Dominating - high concern for self and low concern for others. iv) Compromising - moderate concern for self and moderate concern for others. v) Integrating - high concern for self and others. e) Several OD intergroup techniques are available to deal with problems between groups. i) Dealing with conflicts openly provides a way to manage tensions creatively. ii) OD techniques for dealing with intergroup problems include third-party consultation, the organization mirror, and intergroup team building. f) Third-party consultation. i) Uses a third party, usually an outside practitioner, to help open communications, level power, and confront problems between groups. ii) The third party provides diagnostic insight, is nonevaluative, and is a source of emotional support and skills. g) Organization mirror. i) Gives work units feedback on how other elements of the organization view them. ii) Normally using a practitioner, the work group obtains specific information from other groups that it comes in contact with. iii) The units meet together to process the data with the objective of identifying problems and formulating solutions. h) Intergroup team building. i) Key members of conflicting groups meet to work on issues of interface. ii) The meeting usually involves the following steps: (See Table 11.1 Intergroup Meeting Listings) (1) Step 1. Working separately, the two work groups make three lists: (a) How we see ourselves. (b) How we think the other group sees us. (c) How we see the other group.

(2) Step 2. Meeting with the other group, a spokesperson from each group presents their lists.

(3) Step 3. Groups meet separately to discuss the information.

(4) Step 4. Subgroups of five or six are formed by mixing members of the two groups. Their objective is to develop problem-solving alternatives with action plans.

(5) Step 5. A follow-up meeting is held to evaluate progress.

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OD Applications Harley-Davidson’s Plant Run by Work Teams (pg. 295) SUMMARY Harley-Davidson Motor Co. (HD) at its Kansas City plant is relying upon workers’ teams to assist in operating the plant.

MAJOR POINTS • • • • •

• • • • • • • • • •

HD, over 100 years old, manufactures motorcycles that are known throughout the world.

In 2007 HD began to experience significant challenges in changing demographics and the recession.

Their Kansas City plant is an example of how it is building on employee strengths so that HD will once more be the success that it once was.

Before the plant opened it worked for two years with the union on a labor agreement.

The result was “The 23 Elements of Shared Responsibility,” which empower workers’ teams to: o Make their schedules and work rules. o Train new workers and evaluate fellow workers. o Manage the plant’s operating budget. o Approve plant strategies.

The plants structure centers around the employees.

A production worker is a member of a natural work group of 8 to 15 people.

Each group sends a representative to an operating group.

The plant has four operating groups that oversee its division.

Each group elects a representative to serve on the Plant Leadership Group.

The Plant Leadership Group includes the plant manager, both union presidents, six managers, and a representative from maintenance.

The plant is open and does not have walls for offices.

Employees chosen to work at the plant are rigorously screened.

New hires go through training lasting up to six months and includes technical and teamwork training.

Productions workers receive financial rewards based on the performance of the plant.

QUESTIONS 1. Research Harley’s current financial picture. Its annual reports are available at www.harley-davidson.com/.

2. Do you think the Kansas City plant is a realistic idea? Support your position.

3. What could be some problems with this type of structure?

Answer: The ability to make fast decisions could be sacrificed by the work groups taking longer to reach agreement. Time that otherwise would be devoted to production could be sacrificed when team members are attending plant meetings. If workers do not see how their work is translated into rewards that Chapter 11 Intergroup Development .

183

they receive, they may become apathetic towards their work. A recession, such as the one that began in late 2007, could demoralize the teams when they encounter situations where no matter how well and hard the teams are working, the company’s sales and financial health still decline.

4. Do you have any suggestions to improve the plant?

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Review Questions 1. Identify major sources of organizational conflict.

Answer: Limited resources, competition, power conflict, role conflict, role ambiguity, personality conflict, goal conflict, and suboptimization.

2. Many people approach conflict as a win-lose situation. Why is a win-win approach more likely to work?

Answer: Research indicates cooperation in some situations promotes productivity; however, there is lack of evidence to support intergroup competition promoting productivity. In simple tasks, competition tends to be superior to cooperation as it provides incentive. Tasks that are more complicated require coordination and sharing of information which competition tends to discourage. A “win-win” approach encourages interaction and negotiation to increase frequency of communication that in turn promotes cooperation.

3. What are the anticipated behaviors of competitive conflict that occur in work teams?

Answer: Competing groups see the best in itself and the worst in the other group.

Communication decreases between groups and hostility increases toward the other group.

The group becomes more cohesive, structured, and organized. Also within the group, concern for task accomplishment increases while concern for psychological needs of members decreases. Leadership styles become more autocratic and less democratic. After the groups complete the task and there is a winner and a loser, the winning group will become more cohesive but, with their self-image of being better than the other group, they will become complacent. The winning group will become more concerned for member’s psychological needs and less concerned for task accomplishment. The losing group denies the loss if the situation is ambiguous enough or rationalizes the loss by blaming it on bad luck or unclear rules. Initially the group splinters, tries to find someone to blame, and has less concern for member’s psychological needs. Over time, however, the loosing group usually learns more about itself because its preconceived ideas about being the best group are upset. The long-term result of the loss can have positive outcomes if the losing group realistically accepts its loss.

4. Identify and compare the five major conflict styles.

Answer: Avoiding - low concern for both self and others.

Obliging - low concern for self and high concern for others.

Dominating - high concern for self and low concern for others.

Compromising - moderate concern for self and moderate concern for others.

Integrating - high concern for self and others.

5. Compare and contrast the methods used in the different approaches to resolving intergroup conflict.

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Answer: Third-party consultation - one method of increasing communication and initiating intergroup problem solving through the use of a third party, usually an outside practitioner. In this process the parties directly engage each other and focus on the conflict between them.

Organization Mirror - a technique designed to give work units feedback on how other elements of the organization view them. This intervention is designed to improve relationships between groups and increase effectiveness.

Intergroup Team Building - an intergroup team building or confrontation technique where key members of conflicting groups meet to work on issues or interface. An interface is any point at which contact between groups is essential to achieving a result.

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KEY WORDS AND CONCEPTS Define and be able to use the following words and concepts: Avoiding Style - a style of managing conflict that avoids conflict by withdrawing. (pg.

300) Boundaryless - a term used by General Electric that refers to reducing conflict between divisions and departments (i.e., there are no boundaries between departments). (pg. 296) Compromising style - a style of managing conflict that tends to seek out compromise between conflicting parties. (pg. 301) Confrontation - the process in which the parties directly engage each other and focus on the conflict between them. (pg. 302) Dominating style - a style of managing conflict that attempts to attain personal objectives and often ignores the needs of others. (pg. 300) Integrating style - a conflict style where there is high concern for self and others. This style is concerned with problem solving; uses openness, sharing of information, and the examination of differences to reach a consensus solution. (pg. 301) Interdependence - situations where the performance of one group is contingent upon another group. (pg. 296) Interfaces - meeting point between groups. (pg. 296) Intergroup competition - A condition causing intergroup problems which involves groups with conflicting purposes or objectives. This condition emerges when a group desires or pursues one goal while directly opposing values that exist in another group. (pg. 298) Intergroup interventions - OD interventions that attempt to increase cooperation among organization subsystems. (pg. 297) Intergroup team building - An OD intervention technique where key members of conflicting groups meet to work on issues or interface. (pg. 303) Meta goals - the superordinate organization goals. (pg. 302) Obliging style - a style of managing conflict that is concerned with people satisfactions and smoothing over conflicts. (pg. 300) Open loop - elements of an organization such as departments operating without feedback. There is no mechanism for corrective action to take place. (pg. 297)

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Organization mirror - a technique designed to give work units feedback on how other elements of the organization view them. This intervention is designed to improve relationships between groups and increase effectiveness. (pg. 303) Suboptimization - when the goals of operating divisions are interdependent, optimization by one group may result in decreased goal attainment for other groups and the organization. Occurs when a group optimizes its own subgoals but loses sight of the larger organization goals. (pg. 298) Team interdependence - the performance of one group is contingent upon another group. (pg. 294) Third-party interventions - method of increasing communication and initiating intergroup problem solving using a third party, usually an outside practitioner. In this process the parties directly engage each other and focus on the conflict between them. (pg. 302)

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ADDITIONAL RESOURCES Readings: Cannon, Alan and Caron H. St. John, “Synergy through Collaboration: A Theory of Culture's Effects,” Academy of Management Proceedings, August 2008, pp. 1-6.

Cross, Rob, Kate Ehrlich, Ross Dawson, and John Helferich, “Managing Collaboration: Improving Team Effectiveness through a Network Perspective,” California Management Review, vol. 50, no.4 (Summer 2008), pp. 74-98.

Thompson, Leigh L., Making the Team, A Guide for Managers, (Upper Saddle River, NJ: Pearson Education, Inc., 2008). Chapter 12, Interteam Relations: Competition and Cooperation.

Walton, Richard E., Interpersonal Peacemaking: Confrontations and Third-Party Consultation, (Reading, Mass.: Addison-Wesley Publishing Co., Inc., 1969). This is one of the titles in the Addison-Wesley series on organization development. The series is considered a classic and might be found on eBay or Amazon.

Video: Miracle. (2004, Buena Vista Pictures) This movie, based on a true story, is of the 1980 U. S. men’s Olympic hockey team. It illustrates how individual hockey players became a team in a short time and won a gold medal over the much more experienced and highly favored Soviet team. Players with old college rivalries who once competed with one another come together as a team.

Master and Commander: The Far Side of the World. (2003, DVD). This is a long movie (138 minutes run time) and the point of teamwork and leadership can be made by showing the following segments.

From 0 to 20 minutes of the movie – Illustrates teamwork and leadership.

Personal and team gains (safety) are subordinated to the needs of the ship. If the ship does not survive, then personal safety is moot.

At 40 minutes - Another example of individual sacrifice for the ship.

At 45 minutes – Teams doing their tasks to keep the shi from going down in heavy seas. One member goes overboard ad the Captain makes the decision to sacrifice the crew member for the survival of the ship.

At 1 hour, 10 minutes – Team training. Similar to Extreme teams in OD in Practice in Chapter 11.

You might want to explore with the class if teamwork in military situations has any application to non-military organizations.

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SIMULATION PROCEDURES Simulation 11.1 (pg. 306) The Disarmament Game 1. Student premeeting preparation: a. Students should read and become familiar with the rules and procedures of the simulation before coming to class. b. Students cut out play money before class to save class time. Having students use their own money or some ratio to the amount in the simulation is desirable but not necessary for the success of the simulation.

2. Instructor premeeting preparation: a. The class will need to be divided so there will be two teams working with each other. Depending on the size of your class, you will need to consider further dividing so you will have two different Disarmament Games, both composed of two teams each. Try to avoid a team size of less than five. b. It will help to have the assistance of several people who are experienced and trained observers. In addition, you will need a referee for each set of two groups. I use an observer for each group and another observer at the negotiations. Their comments are helpful in Simulation 11.2. I have used observers who are class members and, when possible, other professors, graduate students, or students who previously had the course. c. Separate rooms for each group are desirable and a neutral zone away from their groups for the negotiations is also helpful. The groups should not be able to hear each other. d. It is desirable to have a three-hour block of time (or more). Segmenting the simulation (also segmenting Simulation 11.2 from 11.1) tends to diminish some of the dynamics. For shorter class periods, I have sometimes been able to negotiate with the students an alternative meeting time when a longer block of time is available.

3. Suggestions: a. If students have normally been working with the same people in previous simulations, staying in these same groups will help them to identify more closely with their team in this simulation. b. It is strongly suggested that Simulation 11.2 be a follow up to this simulation. I have found that in classes when time got short and we either glossed over or did not do Simulation 11.2, there was animosity between students in competing groups and they became dysfunctional for the remainder of the semester. The impact of Simulation 11.1 should not be underestimated; I have yet to use it when it fell “flat.” Several semesters later, this simulation is brought up in conversations with my x-students.

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4. Discussion points: a. Many factors contribute to the development or breakdown of cooperation and collaboration. One of the most important is the existence of distrust when we doubt another’s intentions or suspect his/her motives. b. Look at the difference between win-win strategies and win-lose strategies. c. Did the two groups take the opportunity to collaborate and break the World Bank? Why or why not? d. Discuss the idea of trust. Did one group trust the other but at its own expense? e. Were individuals heard within each group?

5. Total time suggested: 120 minutes You will need to adjust these times to fit your specific schedule and class plans.

Steps 1 and 2 Step 3 Step 4 Step 5 Total

Minutes 90 5 10 15 120

Notes

Simulation 11.2 (pg. 313) Intergroup Team Building 1. Premeeting preparation: a. Complete Simulation 11.1.

2. Suggestions: a. If there were observers used in Simulation 11.1, they should be used to share their observations. b. It may be difficult to get students to focus on team building and instead they may persist in arguing about Simulation 11.1. A certain amount of replaying 11.1 is necessary for this simulation but you may need to Chapter 11 Intergroup Development .

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remind the students of the objectives. You may be acting as a third-party practitioner to the groups. This is helpful as students can experience first hand the role and behavior of a practitioner. c. If the class is large where two sets of Disarmament Games were played, one set of teams can be in the fishbowl (or inner circle) while the other set observes.

3. Discussion points: a. Were any of the difficulties that were created in Simulation 11.1 resolved? b. Be particularly aware of class members who are unusually quiet.

4. Total time suggested: 75 minutes You will need to adjust these times to fit your specific schedule and class plans.

Steps 1 and 2 Step 3 Step 4 Step 5 Total

Minutes 30 10 20 15 75

Notes

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CASE TEACHING NOTES The Exley Chemical Company (pg. 313) I. Problems A. Macro 1. Geographic separation of plants.

2. Unclear delineation of responsibility; duplication of roles among departments.

3. Competition, rather than cooperation, within and between departments.

B. Micro 1. Personal territoriality in departments.

2. Lack of integration of efforts.

II. Causes 1. Poor communication.

2. Poor planning.

3. Lack of shared objectives.

III. Systems affected 1. Structural - responsibilities overlap without coordination of people involved.

2. Managerial - managers sometimes operate at cross purposes to one another.

Other managers tend to drop the ball if they are not given specific authority for an area.

3. Psychosocial - Some departments (for example, Exley’s research person in charge of polymers) see the need for better teamwork on the projects. Without direction from corporate headquarters, managers seem to identify more with their departments than the entire organization.

4. Technical - the ability to develop new products is being hindered.

5. Goals and values - each department identifies with their own goals and not the meta or organization-wide goals of Exley.

IV. Alternatives 1. Intergroup development including third-party consultation, organization mirror, and intergroup team building.

2. Get rid of product development division and create teams of involved employees to head-up the development, introduction, manufacturing, and sales of products.

3. Return to traditional method used before the creation of the product development division.

V. Recommendations A combination of alternatives 1 and 2. Make all affected divisions responsible for new products. This will require a high degree of intergroup development.

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STUDENT PREPARATIONS FOR THE NEXT CHAPTER 1. Read Chapter 12.

2. Prepare for OD Skills Simulation 12.1. Prior to class, form teams of seven and

assign roles. Complete Step 1.

3. Complete Step 1 of OD Skills Simulation 12.2.

4. Read and analyze Case: Valley Wide Utilities Company.

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Chapter 12

Goal Setting for Effective Organizations

Learning Objectives 1. Recognize how goal setting can be used as part of an OD program.

2. Apply the major findings of the research on goal setting to develop organizational and personal goals.

3. Describe how management by objectives (MBO) can be applied as a management system.

4. Experience and practice goal-setting approaches.

Student Premeeting Preparation 1. Read Chapter 12.

2. Prepare for OD Skills Simulation 12.1. Prior to class, form teams of seven and assign roles. Complete Step 1.

3. Complete Step 1 of OD Skills Simulation 12.2.

4. Read and analyze Case: Valley Wide Utilities Company.

Instructor Preparation and Materials 1. Simulations: no special materials are required.

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LECTURE OUTLINE 1) Learning objectives. (pg. 319) a) Recognize how goal setting can be used as part of an OD program. b) Apply the major findings of the research on goal setting to develop organizational and personal goals. c) Describe how management by objectives (MBO) can be applied as a management system. d) Experience and practice goal-setting approaches.

2) Goal-setting Theory. (pg. 319) a) Goal setting is invariably part of an OD program, though a formal goal-setting program may not be. However, a formal program is more likely to produce favorable results. i) Goal setting may be organization-wide, department-wide, individual, or an integration of the three. ii) A goal is anything an individual is trying to accomplish and is the object of action. b) Major findings relevant to goal-setting theory: i) More difficult goals produce better performance. ii) Specific hard goals are better than “do your best” goals. iii) People may abandon goals if the goals become too hard. iv) Participation in setting goals increases commitment and attainment of goals. v) Feedback to an individual about accomplishment of goals improves performance. vi) Education levels, seniority, and position in organization of participants do not predict success of goal setting. vii) Goal-setting in teams deserve special consideration. viii) Support of management is critical.

3) Goal-setting model. (pg. 323) a) First three factors in goal setting are determining the goal, achieving goal commitment, and overcoming resistance. (See Figure 12.2, Goal Setting) b) Goals are developed which are difficult, specific, and are work group or individual. c) Commitment to goals can be achieved by: i) Mutual trust in and by upper management. ii) Support by management. iii) Competition between employees and teams but care should be used in 196

Chapter 12 Goal Setting for Effective Organizations .

designing competitive situations. d) Overcoming resistance to goals by providing: i) Special training if required. ii) An effective reward and incentive system. iii) Participation by employees in setting goals. e) A period of performance during which support and feedback by management are given. i) Employees may require additional training and resources. ii) Managers may need to work with employees to develop action plans. iii) Managers provide timely and objective feedback. f) A number of studies on goal setting show favorable results.

4) Management by objectives (MBO) (pg. 324) a) MBO is a specific technique for setting goals. b) It is aimed at the integration of individual and organization goals. c) Definition of MBO. i) It is a system of management set up to help in planning, organizing, problemsolving, motivating, and other important managerial activities. ii) MBO is a process where the superior and subordinate managers of an organization: (1) Jointly identify its common goals (2) Define each individual’s major areas of responsibility in terms of results expected.

(3) And use these measures as guides for operating the unit and assessing the contribution of each of its members. iii) MBO involves the participation of subordinates and their managers in setting and clarifying the goals for subordinates. d) There are two underlying purposes of MBO. i) One is to clarify the organization’s goals and plans at all levels. ii) The other is to gain better motivation and participation from the organization’s members. e) The MBO process includes the following phases: i) Top management team studies the system. ii) The team sets up methods of measuring performance. iii) Goal-setting sessions are held down through the organization. f) Steps in the MBO process. (See Figure 12.3, Steps in the MBO Process) i) Subordinate proposes specific goals and ways to measure them for a designated time period. ii) Subordinate and superior jointly develop mutually agreed upon goals. iii) A period of performance. iv) Feedback of results with comparison between actual performance and goals.

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v) Previous step sets the stage for a recycling of the goal-setting process. g) Criticisms of MBO. i) Implementing MBO is expensive and time-consuming. ii) It has traditionally been limited to managerial and professional employees where the costs can be justified. iii) Joint goal-setting among unequals is difficult and may not be possible. iv) MBO may be too quantitative, and setting objectives as explicitly as possible may not be functional. v) Areas that cannot be quantified easily may be ignored. vi) MBO may be implemented in some organizations as the top dictating to the bottom. vii) Some OD practitioners question if MBO is an OD intervention. h) Results of MBO. i) It has been difficult to measure success of MBO, perhaps because of the proliferation of so many different approaches in its application in organizations. ii) Absence of current research which may indicate declining use of MBO. iii) Available research shows mixed results, though generally favorable.

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OD Applications Goal Setting in Teams at General Mills (pg. 320) SUMMARY General Mills has improved its teams by looking for examples outside the company.

MAJOR POINTS • • • • • • • • •

The chief technical officer of General Mills, Randy Darcy, is looking at groups that take team performance to the extreme.

The teams General Mills looks to are ones that dissect their operations, analyze them, change them, and put them back together.

Teams General Mills examined were a NASCAR pit crew and the way that Stealth bomber pilots and ground crews cooperate.

The purpose is to jolt employees into thinking of new ways of doing their jobs.

Cross-team cooperation was examined.

Studying the cooperative methods between SWAT team units helped General Mills to replace separate performance goals for engineering, purchasing, and production with a single set of goals.

Though General Mills identified extreme teams outside of the company when the program began in the early 2000s, they currently have their own examples of extreme teams.

Extreme teams cut costs through “margin management” where small changes can add up to big savings.

Each division in General Mills has a three-year savings goal, and everyone usually meets once a week to look at costs.

QUESTIONS 1. Do you agree with Darcy’s approach of going to teams that take

performance to the extreme?

2. What are some other examples of extreme teams that General Mills or

any organization might study?

Answer: Sport teams such as college and professional football, musical groups such as bands and orchestras, and military units that could include the Navy Seals.

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Review Questions 1. Identify and discuss the major factors in effective goal setting.

Answer: Goals should be difficult and specific, but they should not be impossible to attain. Frequent, relevant, and specific feedback is important. Goal setting can be successful regardless of the education level, position in the organization, or seniority of the participant. Support from management is critical.

2. Discuss the role of participation in goal setting.

Answer: Participation, though not mandatory, tends to lead to participant commitment.

Commitment is a crucial ingredient in effective goal setting. Management should also participate in a goal program by providing timely and specific feedback .

3. Describe Locke and Latham’s goal-setting model.

Answer: The first three factors in the goal-setting process are determining the goal, achieving goal commitment, and overcoming resistance to goal acceptance. The following goal attributes or characteristics tend to work best in setting goals. Goals should be difficult and challenging but not impossible to accomplish. They should be specific and measurable and they should be compatible with goals formulated at higher levels of the organization. The next step is a period of performance. The results of the employees’ performance can be beneficial or negative. Higher performance and pride in achievement of successes can be expected. Negative consequences can be expected, particularly when the goals are not achieved.

4. What are the typical steps in an MBO program?

Answer: Step 1 - The subordinate proposes to his/her manager a set of goals for the upcoming time period that are formulated to be congruent with goals set at the next higher level.

Step 2 - The subordinate and the manager jointly develop specific goals and targets.

Step 3 - A period of performance in which the individual involved is attempting to accomplish the individual goals.

Step 4 - The manager feeds back results to the subordinate and gives appropriate rewards for performance.

Step 5 - The outcome of the performance review provides the basis for setting new performance goals and recycling of the goal-setting process.

5. Compare and contrast the factors that make for successful and unsuccessful MBO programs.

Answer: Mutual goal setting is not always possible; MBO may be expensive and time consuming; managers may resist required changes in style. If participative and clear, it is more likely to be successful.

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KEY WORDS AND CONCEPTS Define and be able to use the following words and concepts: Goal - what an individual is trying to accomplish and is the object or aim of action. (pg.

320) Goal setting - a process intended to increase efficiency and effectiveness by specifying desired outcomes toward which individuals, teams, and organization should work. (pg.

319) Management by objectives (MBO) - a specific technique used by organizations for setting goals. It is a system of management set up to help in planning, organizing, problem solving, motivating, and other important management activities. (pg. 324)

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ADDITIONAL RESOURCES Readings: Jones, Graham, “How the Best of the Best Get Better and Better,” Harvard Business Review, June 2008, pp. 123-6.

Video: Flight of the Phoenix, 1965, remake 2004, 142 minutes, Twentieth Century Fox Film Corp. The story of a plane crash in the desert and the difficulty of survival. Subjects include goal setting, conflict, teamwork, and leadership styles.

Additional Simulation: An additional simulation that is not in the text follows on the next page.

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OD Skills Simulation GOAL SETTING (Total time required: approximately 1 hour) A. Purpose To gain practice setting goals and to improve your abilities in helping others set and refine their goals.

B. Procedures Step 1. Make a list of three or four things you would like to accomplish. You may want to refer to Simulation 2.1 where you set goals. Your goals can relate to several areas: they can be personal involving your family, friends, social life, and community; and they can be work or school related involving your career and on-the-job accomplishments. At this point, don’t worry about the wording or whether they meet all the criteria of a properly worded goal. Just get your ideas down on paper.

1.

2.

3.

4.

Step 2. Goals to be effective need to meet certain characteristics as the text pointed out.

Continue refining the goals to meet these criteria including being difficult and challenging, achievable and realistic, measurable, specific, and time-framed with a date of accomplishment.

1.

2.

3.

4.

Step 3. Form into teams of three members. One person will serve initially as the client, another person as the practitioner, and the third person as the observer. The simulation will have three rounds in which the roles will rotate.

The practitioner: As the practitioner, assist the client to further refine the goals.

Working from the process model, you may want to help the client focus on the following issues: 1. What factors influenced you in the choice of these goals?

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2.

3.

4.

5.

Are the goals difficult and challenging yet achievable and realistic for you?

How do you plan to measure your progress toward these goals?

Will the accomplishment of the goals be observable to others?

What factors in yourself, others, and the environment will help and hinder you in accomplishing the goals?

The observer: During the meeting, the observer will carefully note the process using the Observer Form found at the end of the simulation. A report on the observations will be made after each of the goal-setting meetings.

The client: The final wording of the goals can be recorded in the following space: 1.

2.

3.

4.

Continue this step until all members have served as a client, consultant, and observer.

Time suggested for Step 3: 60 minutes OBSERVER FORM Instructions: Based on the scale, select the number that indicates your observation of the following areas. Record your choice in the blank to the right.

Very 1 Little

2

3

4

5

6

Very 7 Much

Did the practitioner: 1. Establish a relationship?

_____

2. Take over the problem?

_____

3. Focus on feelings?

_____

4. Encourage the client to be specific?

_____

5. Allow the client to talk?

_____

6

Lead and direct the conversation?

_____

7. Show indications of judging the client?

_____

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SIMULATION PROCEDURES Simulation 12.1 (pg. 328) Organization Goal Setting 1. Student premeeting preparation: a. Form into teams of seven the preceding class and select roles. b. Students should read the Vernal Corporation Background Information, their role description, and become familiar with the simulation.

2. Suggestions: a. Emphasize that students read only their role description.

3. Discussion points: a. Would team building as discussed in Chapter 10 help in setting goals? b. Discuss the problems of the compatibility of personal and organizational goals. c. Also, discuss the problems of conflict of goals between individuals and how they are or are not resolved. What norms have emerged?

4. Total time suggested: 60 minutes You will need to adjust these times to fit your specific schedule and class plans.

Step 2 Step 3 Step 4

Minutes 30 15 15

Total

60

Notes

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Simulation 12.2 (pg. 335) Managing By Objectives 1. Student premeeting preparation: a. Review list of objectives from Simulation 2.1. b. Also, review process practitioner techniques.

2. Suggestions: a. emphasize the importance of the observer role.

3. Discussion points: a. b. c. d.

Goal-setting and behavioral objectives.

How can one obtain feedback about one’s behavior?

Difference between ideal and actual.

Practice skills in giving and receiving feedback.

4. Total time suggested: 60 minutes You will need to adjust these times to fit your specific schedule and class plans.

Steps 1 to 3 Step 4 Total

Minutes 45 15 60

Notes

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CASE TEACHING NOTES Valley Wide Utilities Company (pg. 337) I. Problems A. Macro 1. Difficulty in setting standards 2. Low morale, resistance to measurement.

3. Goals don’t appear to be mutually set.

4. MBO set for the purpose of evaluating department managers, not as a method of setting goals.

B. Micro 1. Not enough input from below; too top-down.

2. “Management by exception” doesn’t allow for causes; too numerical, not enough human factor.

II. Causes 1. Rewards overlooked; failure emphasized; too negative.

2. No employee input.

3. Standards not agreed upon.

4. Goals ignored.

III. Systems affected 1. Structural – Givens and Hirsh seem to be staff managers. Yet they are imposing goals on line and operational units.

2. Psychosocial – people not truly committed to goals, lack of personal involvement in setting goals.

3. Technical – repairs to lines and other emergency situations may not be corrected in future if people blindly adhere to the goals.

4. Managerial – lack of flexibility. Managers may become “robot-like” if MBO goals are imposed without consideration for unforeseen problems and situations.

5. Goals and values – the goals of Valley Wide can suffer as there is no clear policy and procedures regarding goal setting. Goal setting and MBO was tried briefly, didn’t work immediately, and quickly dropped. This could create a precedent for future programs to improve the organization.

IV. Alternatives 1. Team and interteam development.

2. MBO with team input.

3. Role clarification.

V. Recommendations All of the alternatives can be used with a revised MBO goal setting program.

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STUDENT PREPARATIONS FOR THE NEXT CHAPTER 1. Read Chapter 13.

2. Prepare for OD Skills Simulation 13.1. Prior to class, form teams of six to eight members and assign supervisor and observer roles. Complete Step 1.

3. Prepare for OD Skills Simulation 13.2. Form teams of six and assign roles. Complete Step 1.

4. Read and analyze Case: Wengart Aircraft.

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Chapter 13

Work Team Development

Learning Objectives 1. Describe the major OD quality and productivity interventions.

2. Diagnose job design problems as part of an OD program.

3. Identify the similarities and differences in job design, total quality management, and self-managed work teams.

4. Experience how an OD practitioner can help an organization to make productivity changes.

Student Premeeting Preparation 1. Read Chapter 13.

2. Prepare for OD Skills Simulation 13.1. Prior to class, form teams of six to

eight members and assign supervisor and observer roles. Complete Step 1.

3. Prepare for OD Skills Simulation 13.2. Form teams of six and assign roles.

Complete Step 1.

4. Read and analyze Case: Wengart Aircraft.

Instructor Preparation and Materials 1. Simulations13.1 Paper House Production Scissors, cellophane tape, rulers, marking pens, and 5” x 8” cards are required. The amount of supplies will vary with class size. It is normal for groups to over-estimate their needs during the first production period. I normally have two of each piece of equipment (scissors, etc.) for each group. Two hundred cards for each group should be adequate.

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LECTURE OUTLINE 1) Learning objectives. (p. 341) a) Describe the major OD quality and productivity interventions. b) Diagnose job design problems as part of an OD program. c) Identify the similarities and differences in job design, total quality management, and self-managed work teams. d) Experience how an OD practitioner can help an organization to make productivity changes.

2) Continuous improvement processes. (p. 341) a) The message for organizations is clear: change or face elimination. b) OD interventions are helping organizations meet these challenges. c) Trends in organizations are toward decentralization, fewer levels of management, a decrease in staff positions, and broader spans of control. d) More decision-making authority is being pushed down to the lowest levels of the organization where the employees are most aware of the problems. e) Through high-involvement management, line workers are planning, organizing, controlling, and leading. f) The design and organization of jobs is changing to accommodate the demands of changing organizations.

3) Job design involves changing the nature of jobs to improve workers’ satisfaction and productivity. (p. 342) a) Job design moving away from scientific management and time-and-motion studies that were introduced in the early 1900s. b) Job design looks at production line work and work in general. c) The objective is to redesign jobs to improve worker satisfaction and productivity. d) Many variables involved: i) Worker. ii) Nature of the work. iii) Organizational climate. iv) Manager’s style. e) Two closely related theories of job design: i) Job characteristics theory. ii) Job enrichment theory.

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4) Job characteristics theory. (p. 342) a) The theory attempts to develop objective measures of job characteristics that can directly affect employee attitudes and work behaviors. b) Work motivation and satisfaction are affected by five core job dimensions: (1) Skill variety - the number and types of skills involved.

(2) Task identity - degree to which job is an identifiable whole piece of work.

(3) Task significance - the degree to which job impacts lives of others, either in or out of the organization.

(4) Autonomy - the degree to which job provides independence in scheduling work and determining procedures to be used.

(5) Job feedback - the degree to which the job results in obtaining direct feedback about effectiveness. c) Jobs that measure high on the preceding dimensions produce increased personal and work outcomes. d) A mathematical score that reflects a job’s motivational potential is based on the formula:

e) Methods for improving jobs include: (1) Take fractionalized tasks and put them together to form a larger module of work.

(2) Form natural work units.

(3) Allow employee to have direct contact with people using product or service.

(4) Allow an employee to decide on work methods, when to take breaks, making budgets, and managing crises.

(5) Establish feedback channels so employees can learn how they are performing.

5) Job enrichment theory. (p. 344) a) The theory holds that jobs should be redesigned to improve the motivators related to a job by permitting employees to attain more responsibility and achievement. b) Changes are made in the nature of jobs in a way that increases achievement, recognition, responsibility, advancement, and challenge for an employee. c) There are may techniques for improving motivational factors of jobs including: (1) Arrange a job into natural and complete units of work.

(2) Add more difficult assignments.

(3) Grant additional authority.

(4) Allow employees to become experts in specialized areas.

(5) Make information directly available.

(6) Remove controls while still holding employee accountable. d) Extrinsic rewards such as money are important but in themselves are not motivators. e) Job enrichment theory holds that in order to improve worker performance, enhance both the quality of the work and rewards are required. f) Research on job design programs are generally favorable and bear out validity of the theories.

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6) Total quality management (TQM). (p. 345) a) TQM is the management of activities that involve improving the quality of the organization’s product or service. b) It is an organizational strategy that is committed to improving customer satisfaction by developing techniques to carefully manage output quality. c) Characteristics of TQM : i) Organization wide. ii) Top management support. iii) A value in the culture. iv) Partnership with customers and suppliers. v) Everyone in the organization is a customer. vi) Reduced cycle time. vii) Techniques range in scope including: (1) Statistical quality control.

(2) Job design.

(3) Empowerment.

(4) Self-managed work teams. viii) Do it right the first time. ix) The organization values and respects everyone – both in and out of the organization. x) TQM is designed to fit the organization. d) Dimensions of quality include performance, features, reliability, durability, and aesthetics. e) The Malcolm Baldrige National Quality Award is a U.S. government response to encourage organizations to improve quality of products and services. i) The award is given annually to recognize exemplary organizations. ii) The criteria for the award includes leadership, strategic planning, customer focus, human resource focus, and business results. f) TQM and OD hare similar values. i) TQM may be used in an organization but not as part of an OD program. ii) TQM as a stand-alone program assumes the problems and solutions relate to quality issues. iii) The OD practitioner should guard against being a “quality management expert.” iv) An OD program may incorporate TQM as one of many techniques that may be used.

7) Self-managed work teams. (p. 349) a) What they are: i) Autonomous group whose members decide how to handle their task. ii) Teams are composed of people from different parts of the organization with different skills.

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iii) Groups may be permanent work teams or temporary teams. b) Characteristics include: i) The structure of the organization is based on team concepts. Few management levels and few job descriptions. ii) Lack of status symbols. iii) The team as functional boundaries that member can identify. iv) Number of team members are kept as small as possible, usually 5 to 15 members. v) The team orders material and equipment; they set their goals and rewards. vi) Team members have a sense of vision for their team and organization. vii) Strong partnership between members and management. viii) There is a diversity in team members’ backgrounds and viewpoints. ix) Information is openly shared. x) Members are skilled and knowledgeable in their areas. xi) Training and cross-training is important. xii) Members are knowledgeable of customers, competitors, and suppliers. c) The design of jobs. i) The five core job dimensions (skill variety, task identity, task significance, autonomy, and job feedback) help in evaluating to what extent a team is selfmanaged. d) New organization structures usually emerge. i) The organization structure is modified to accommodate the teams. It is one that is flat and has few levels of support staff. ii) The team provides their own management and support including hiring and firing. iii) The work team carries out functions that would normally be performed by upper management. iv) There are fewer support staff, such as engineering and purchasing, because the work team performs these jobs. e) The teams usually have three levels of management: i) Internal leader - usually elected by the members. Makes sure equipment and supplies are available. Does work similar to other team members. ii) Coordinator or external leader - is an encourager, teacher, and facilitator and helps the team obtain outside resources. Usually is responsible for a few to several dozen teams. iii) Upper management or support team - does general planning, making broad goals, and dealing with outside parties. iv) Some organizations have a council made up of representatives from throughout the company to deal with organization-wide concerns. f) Reward systems are based on team performance and individual performance. i) This type of reward system is typically called gain sharing. ii) A general guideline is that at least 80 percent of the available rewards should be distributed equally among team members. iii) Rewards may be given to the team as a whole, and then the team decides how they should be distributed among the members. iv) The teams should be small enough for an individual’s performance to be Chapter 13 Work Team Development .

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reflected in his or her own paycheck but also in the paycheck of everyone else on the team. g) If a labor union is present, it is involved. h) Cautions in using self-managed teams include: i) Self-managed work teams may not be appropriate to the task, people, and context. ii) Managers and leaders are vague and confused about their roles. iii) Organizations that do not reward performance are likely to run into problems. iv) A lack of training can cause self-managed work teams to fail. i)

Evidence points to the effectiveness of self-managed teams.

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OD Applications When Teams are 14 Time Zones Apart (p. 344) SUMMARY ValiCert, a software engineering company, moved much of its programming to India when confronted with rising costs and competition from overseas.

MAJOR POINTS • • • • •

• • • • • • • •

The move seemed straightforward but ValiCert did not fully analyze their solution.

Its programmers were accustomed to dealing with programmers down the hall— not separated by 14 time zones.

Experienced programmers were difficult to find in India and it did not hire a manager in India.

The U. S. programmers were not used to working with programmers who were not familiar with their software products and customers.

The result of lack of planning included: o Frustrated Indian programmers and lack of direction. o Rejected software. o Resignation by 80 percent of Indian programmers. o Delayed software projects. o Reduced costs but also reduced revenues. o Lowered reputation with customers.

Confronted by bankruptcy, ValiCert decided that operations needed to change between India and U. S. operations.

Indian programmers were given entire projects instead of small parts of a bigger project. This reduced the need for contact with the home office.

The times of telephone calls were rotated between the two offices.

Indian employees were included in company-wide e-mails.

A new position was created to coordinate the U.S. and Indian teams.

Some companies use culture-awareness training to prepare teams from different countries to work together.

Subjects include religion, language, communications (verbal and nonverbal), business attire, and protocol.

Small differences in culture and language can cause misunderstandings that have a way of creating major problems.

QUESTIONS 1. What were the challenges faced in outsourcing work to India?

Answer: Challenges include time zone differences, finding experienced programmers, no local manager in India, lack of planning, and no clear instructions.

2. Can you think of any other things that will help Indian and U.S. teams work better together?

Answer: Face to face or telepresence meetings, bring key Indian programmers to U. S. to meet with other ValiCert employees and end-users of the software, make Chapter 13 Work Team Development .

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sure that the Indians understand where their part of the project fits into the finished software package.

3. What do you think of the culture-awareness training that some companies are using?

Chugach School District and the Baldridge Award (p.

348) SUMMARY The Baldrige Award is given every year to U.S. organizations that have exemplary achievements in quality.

MAJOR POINTS • •

•

•

•

Chugach School District (CSD) is in Alaska, encompasses 22,000 square miles and has only 214 students that live in remote areas.

Prior to a comprehensive restructuring in 1994, measurements of student performance were well below state and national averages. o Only one student had gone to college in 26 years. o Staff turnover exceed 50 percent a year.

As part of the change program, CSD pioneered a standards-based system of “whole child education.” o It emphasizes real-life learning situations. o The change was a collaboratively one between staff, current and past students, parents, school board members, and business and community leaders. o Meetings with the groups produced a core vision, shared values, and common performance goals. o Accountability for results was built into the program.

The approach is individualized and student-centered. o There are 10 content areas and minimum graduation levels of mastery. o Students are evaluated in the traditional areas of reading, writing, mathematics, social science, and science. o Nontraditional areas of measurement include service, career development, technology, cultural awareness, and personal development. o Students work at their own appropriate pace.

Highlights of 10 years of results include: o Student performance exceeds state and national norms. o CSD topped the state average in state exams. o More students are going onto college. o Faculty turnover rate has gone from 55 to 12 percent.

QUESTIONS 1. Research the Baldridge Awards at http://www.quility.nist.gov/ to find out what organizations are the current award winners.

2. At this web site research the application requirements.

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Review Questions 1. Explain total quality management and how it can be used to improve quality and productivity.

Answer: TQM seeks to have organization members who are committed to continuous improvement in meeting or exceeding customer expectations. TQM applies human resources and analytical tools. It seeks to develop a culture with a strong commitment to improving quality in all organizational processes. TQM improves quality and productivity through several processes: (1) It is organization wide and supported by top managers.

(2) It is part of the culture.

(3) A partnership with customers and suppliers is formed.

(4) Everyone in an organization is a customer.

(5) Cycle times for new products and services is reduced.

(6) Quality is manufactured into the product or service at every stage.

(7) The organization values both customers, suppliers, and employees.

(8) There is no single best way to implement TQM.

2. What are some problems that organizations might have in implementing total quality management?

Answer: Problems follow closely not adhering to the characteristics of TQM. This includes: Lack of top management support.

Not organization wide or at least an identifiable unit.

Not part of the corporate culture.

Little or no partnership with customers and suppliers.

Not treating everyone in the organization as a customer.

Long development time for products and services.

Waiting to product/service is completed before inspecting for quality.

Withholding respect for customers and employees.

Using a “cook-book” approach for implementing TQM.

3. What are the characteristics of self-managed work teams?

Answer: The structure of the organization is based on team concepts.

Few management levels and few job descriptions.

Lack of status symbols.

The team has functional boundaries that member can identify.

Number of team members are kept as small as possible, usually 5 to 15 members.

The team orders material and equipment; they set their goals and rewards.

Team members have a sense of vision for their team and organization.

Strong partnership between members and management.

There is a diversity in team members’ backgrounds and viewpoints.

Information is openly shared.

Members are skilled and knowledgeable in their areas.

Training and cross-training are important.

Members are knowledgeable of customers, competitors, and suppliers.

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4. Would you like to work in a self-managed work team? Explain your

answer. Are classroom team projects similar to self-managed teams? Why or why not?

Answer: No specifics but look for reasons and support.

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KEY WORDS AND CONCEPTS Define and be able to use the following words and concepts: Autonomy - one of the five core job dimensions in the job characteristics model; the degree to which the job provides independence to the individual in scheduling the work and determining procedures. (p. 342) Baldridge Award - an award established by Congress and given annually to U.S. organizations that have exemplary achievements in quality. (p. 347) Coordinator - a term used in self-managed work teams that refers to the external leader of a team. The coordinator provides encouragement to the team, is an energizer, and serves as a teacher and facilitator for the team (p. 351) Gain sharing - an incentive system sometimes used in the self-managed work teams. It should be significant. The rewards may be distributed equally among team members or decided upon by the members. (p. 352) Internal team leader - the leader of a team who is usually selected by the members. (p.

351) Job characteristics model - attempts to develop objective measures of job characteristics that can directly affect employee attitudes and work behaviors. Includes these dimensions: skill variety, task identity, task significance, autonomy, and job feedback. (p. 342) Job design - the way a job is structured. (p. 342) Job enrichment theory - a method that builds in satisfaction to a job; includes changing a job to have increasing levels of achievement, recognition, and responsibility. (p. 344) Job feedback - the degree to which carrying out the work activities required by the job results in the individual obtaining direct and clear information about the effectiveness of his or her performance. (p. 343) Motivating potential score (MPS) - a measurement of job’s ability to produce increased personal and work outcomes. (p. 343) Self-managed work teams - an autonomous group whose members decide how to handle their task. The task of the team is an identifiable task, service, or product. (p. 349) Skill variety - the degree to which a job requires a variety of activities that involve the use of different skills and talents. (p. 342) Support team - a term used in self-managed work teams that refers to a team of top management such as a plant manager in a traditional organization. Responsible for general planning, making broad goals, and dealing with outside parties. (p. 351)

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Task identity - the degree to which the job requires completion of a whole and identifiable piece of work. (p. 342) Task significance - the degree to which the job has a substantial impact on the lives of other people, whether in the same organization or in the external environment. (p. 342) Total Quality Management (TQM) - an organization strategy of commitment to improving customer satisfaction by developing techniques to carefully manage output quality. (p. 345)

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ADDITIONAL RESOURCES Readings: Kozlowski, Steve W.J. and Daniel R. Ilgen, “Enhancing the Effectiveness of Work Groups and Teams,” Psychological Science in the Public Interest, vol. 7, no. 3 (December 2006), pp. 77-124.

Video: Twelve O’clock High, 132 minutes. Twentieth Century Fox Film Corp. A tough general (Gregory Peck) takes over a bomber group in WW II. The bomber group is suffering from low morale and poor performance. He gets them into shape as a successful unit.

You could have the class make the assumption of Major Stovall (Dean Jagger) being an OD practitioner to the general and the bomber group. This film was also suggested for Chapter 4.

Additional Simulation: See the next page for a simulation that is not in the text.

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OD Skills Simulation Work Structuring Interview Total suggested time: 1 hour, 30 minutes plus 10 minutes for each team presentation.

A. Purpose This simulation will allow you to practice interviewing a person concerning their work so that you may analyze their job and design structural changes in work design.

B. Procedures Step 1. Invite a person to class or choose a class member to interview to determine the exact nature of his/her job. Have the person describe in as much detail as possible what their job entails. Read Steps 2 through 5 so you may become familiar with the requirements of the remainder of the simulation. The interview may be conducted in smaller groups if more than one interviewee is available.

Time suggested for Step 1: 30 minutes.

Step 2. Based on the presentation, identify motivational factors in the position described.

Time suggested for Step 2: 10 minutes.

Motivational factors:

Step 3. Using the job characteristics model, identify the details of the five core job dimensions for the position described.

Time suggested for Step 3: 10 minutes.

Skill variety:

Task identity:

Task significance:

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Autonomy:

Job feedback:

Step 4. On an individual basis and then as a team, rate from 0 (low) to 10 (high) the five job dimensions. Complete the motivation potential score.

Time suggested for Step 4: 10 minutes.

Step 5. Working first in your team, apply the concepts in the chapter to restructure the work in order to improve the job. This could include job design and self-managed work teams.

Discuss with the entire class the results of your group discussions.

Time suggested for Step 5: 30 minutes for group analysis and 10 minutes presentation per group.

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SIMULATION PROCEDURES Simulation 13.1 (p. 355) Paper House Production 1. Student premeeting preparation: a. Complete Step 1. Form teams of six to eight members. Assign supervisor and observer roles in the preceding class period. b. Students should read and become familiar with the simulation before coming to class.

2. Instructor premeeting preparation: a. Be sure to have adequate supplies. Scissors, cellophane tape, rulers, marking pens, and 5” x 8” cards are required. The amount of supplies will vary with class size. It is normal for groups to over-estimate their needs during the first production period. I normally have two of each piece of equipment (scissors, etc.) for each group. Two hundred cards for each group should be adequate. b. Stress that the note to the supervisor for the first and second planning meetings should be read only by those serving as supervisors. Encourage these students to act out their role descriptions as defined in the simulation.

3. Discussion points: Productivity improvements are an ongoing process and not something that happens once to a job.

Discuss how the changes would be implemented as part of an OD program versus a stand-alone program.

4. Total time suggested: 150 minutes You will need to adjust these times to fit your specific schedule and class plans.

Step 2 Step 3 Step 4 Step 5 Step 6 Step 7 Step 8

Minutes 25 30 10 25 30 10 20

Total

150

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Notes

Simulation 13.2 (p. 361) TQM in the University Setting 1. Student premeeting preparation: a. Complete Step 1. Form teams of six; assign roles in the preceding class period.

2. Suggestions: Have students refer to TQM characteristics in the text. Look for points and common elements from each presentation.

3. Total time suggested: 60 minutes You will need to adjust these times to fit your specific schedule and class plans.

Step 2 Step 3 Step 4

Minutes 35 15 10

Total

60

Notes

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CASE TEACHING NOTES Wengart Aircraft (p. 364) I. Problems A. Macro 1. Quality and profits.

2. Allan Yoshida as well as other higher levels of management do not understand TQM. No training program.

3. Employees and managers are not getting upper management support.

4. Employees quickly learned that “anything that is not worth doing is not worth doing well.”

B. Micro 1. Down time, long coffee breaks.

II. Causes 1. Lack of a clearly defined vision communicated to all employees.

2. Top management too preoccupied with short-range problems such as trying to maximizing the current value of their stock.

3. Top management’s lack of commitment to and understanding of TQM. 4. Top management not able to build a climate of trust between the levels of employees.

III. Systems affected 1. Structural – lack of effective communication channels from one level to another.

2. Psychosocial – little trust in higher levels of management. Lack of commitment and willingness to tackle the hard problems.

3. Technical – lower-level employees appear to hold a lot of knowledge on how to solve production problems.

4. Managerial – upper management seems to have lost touch with their responsibilities. No vision is communicated downward.

5. Goals and values – Larsen’s lack of commitment to TQM will quickly cause the failure of TQM. Lower level managers and employees see TQM similarly to how Larsen sees it: just another mandated program that is not to be taken seriously.

IV. Alternatives 1. Implement TQM with the full support of top management.

2. Top management communicates a clear vision of how the company should operate.

3. A systematic planned change program such as OD can be used to implement TQM.

V. Recommendations Implement all of the alternatives. Use OD as a way to introduce TQM. TQM would be one element of a much larger change program aimed at improving overall organization 226

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effectiveness. Larsen and other top executives demonstrate their commitment to TQM by attending more detailed training programs. This commitment is communicated through successive layers of the company down to the rank-and-file.

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STUDENT PREPARATIONS FOR THE NEXT CHAPTER 1. Read Chapter 14.

2. Prepare for OD Skills Simulation 14.1. Form into teams of seven to eight members and select roles. Complete Step 1.

3. Read and analyze Case: Tucker Knox Corporation.

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Chapter 14

High-Performing Systems and the Learning Organization

Learning Objectives 1.

2.

3.

4.

5.

Describe what a system-level intervention is.

Identify the survey research and feedback process.

Recognize characteristics of learning organizations.

Recognize the steps of reengineering.

Describe the four systems of system 4 management and explain why the fourth system is likely to be more successful in today’s environment.

6. Explain the characteristics of a high-performing system.

7. Recognize the six phases of the Grid OD program.

8. Experience and practice system approaches.

Student Premeeting Preparation 1. Read Chapter 14.

2. Prepare for OD Skills Simulation 14.1. Form into teams of seven to eight members and select roles. Complete Step 1.

3. Read and analyze Case: Tucker Knox Corporation.

Instructor Preparation and Materials Simulations: no special materials are required.

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LECTURE OUTLINE 1) Learning objectives. (pg. 373) a) b) c) d) e)

Describe what a system-level intervention is.

Identify the survey research and feedback process.

Recognize characteristics of learning organizations.

Recognize the steps of reengineering.

Describe the four systems of system 4 management and explain why the fourth system is likely to be more successful in today’s environment. f) Explain the characteristics of a high-performing system. g) Recognize the six phases of the Grid OD program. h) Experience and practice these system approaches.

2) System-wide interventions. (pg. 373) a) Managers today are facing constant innovation and they must be able to transform and renew the organization to meet these changing forces. b) Certain OD interventions are aimed at the successful implementation of change within the total system. c) OD is a systems approach to group and interpersonal relations. d) A system-level intervention is a structural design framework for viewing the organization that examines: i) Organization design. ii) Organization flow patterns. iii) Interactions of individuals and groups. e) The system may be an organization or a reasonably well isolated unit such as a large segment or subsystem within the total organization.

3) Survey research and feedback. (pg. 374) a) The key to a successful survey is for management to clearly define the purpose of the survey and explain what will be done with the results. b) Employee attitude surveys serve two important functions: i) An improvement tool. ii) A communication tool. c) Steps in survey feedback i) Step 1 - Top management plans survey questionnaire. ii) Step 2 - Outside staff administers questionnaire to all organization members. iii) Step 3 - Outside staff summarizes data and gives feedback to organization. iv) Step 4 - Each work group diagnoses problems and develops action programs based on survey feedback to understand problems, to improve working relationships, and to identify opportunities for change and research areas.

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d) Results of Survey Research and Feedback indicate positive changes in employee attitudes and perceptions. i) The greater the involvement of all members of the organization, the greater the change. ii) When results of an OD intervention are fed back properly and action plans are made, factors associated with leadership and commitment to the organization are enhanced. iii) Action plans with concrete objectives are essential for there to be improvement in the organization and leadership. iv) When feedback is combined with other interventions, the effects are usually more substantial and long range.

4) The learning organization. (pg. 375) a) The learning organization is a system-wide change program that emphasizes the reduction of organizational layers and the involvement of all employees in continuous self-directed learning that will lead toward positive change and growth in the individual, team, and organization. b) A learning organization is an organization that has developed a continuing capacity to adapt and change. c) An approach frequently used is to bring together key members in a collaborative process to discover the problems and then to develop a model of the system. d) Learning in organizations means the continuous testing of experience and the transformation of that experience into knowledge accessible to the whole organization. e) Members become conscious of how they think and interact, and begin developing capacities to think and interact differently. f) Core values of learning organizations. i) Value different kinds of knowledge and learning styles. ii) Encourage communication between people who have different perspectives. iii) Develop creative thinking. iv) Remain nonjudgmental of other and their ideas. v) Break down traditional barriers within the organization. vi) Develop leadership throughout the organization. Everyone is a leader. vii) Reduce distinctions between organization members (management vs. nonmanagement and line vs. staff.) viii) Believe that every member of the organization has untapped human potential. g) Characteristics of learning organizations. i) Constant readiness. ii) Best knowledge available. iii) Collaboration across the organization. iv) Continuous planning. v) Improvised implementation.

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vi) Action learning.

5) Reengineering: a radical redesign. (pg. 379) a) Reengineering is the fundamental rethinking and radical redesigning of business processes to achieve drastic improvements in performance. b) The redesign seeks to make all processes more efficient by combining, eliminating, or restructuring tasks to gain a large or quantum leap in performance. c) Reengineering emphasizes products, customer satisfaction, improvement in processes, and creation of value. d) Steps in the reengineering process: i) Identify the key business process. ii) Identify performance measures in terms of customer satisfaction. iii) Reengineer the process, organizing work around the process, not functions or departments. iv) Implement the redesigned process and a continuing reevaluation. e) The process is criticized by some as a top-down, or numbers approach, but in its use of employee involvement, empowerment, and teams, reengineering is similar to the sociotechnical approach to change.

6) System 4 management. (pg. 379) a) Rensis Likert developed the System 4 management model based on his research of organizations. b) Systems 4 management describes organizations on a continuum with traditional bureaucratic organizations (ineffective) at one end and participative (effective) organizations at the other. c) The four systems are: i) System 1 - Exploitive/Authoritative (autocratic, top-down). ii) System 2 - Exploitive/Authoritative (top-down/less coercive-autocratic). iii) System 3 – Consultative. iv) System 4 – Participative. d) Likert found that system 1 organizations tend to be the least effective, whereas system 4 organizations tend to be very effective. (See Figure 14.1, Profile of Organization Characteristics) e) To improve organizations, the OD practitioner tries to move the pattern of functioning from System 1 organizations toward System 4 organizations. f) System 4 organizations have several common elements. i) Action rather than further analysis. ii) Decisions involving subordinates rather than by superiors.

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iii) Individual accountability rather than rigid policies. iv) Specific recognition of team and individual accomplishments rather than blanket expressions of thanks.

7) High-performing systems (HPS). (pg. 381) a) HPS calls for the removal of excessive layers of structure within the organization and the creation of a climate that encourages participation and communication across functional barriers. b) HPS is a term originated by Peter Vaill. c) Eight criteria used to examine systems are: i) Perform excellently against a known external standard. ii) Perform excellently against their potential performance. iii) Perform excellently in relation to where they were at some earlier point in time. iv) Judged by observers to be doing substantially better than other systems. v) Perform with significantly fewer resources than is assumed are needed. vi) Perceived as a source of ideas and inspiration for others. vii) Perceived to fulfill at a high level the ideals for the culture within which they exist. viii) They are the only organizations that have been able to do what they do. d) HPS is identified by eight characteristics. i) An HPS is clear on its broad purposes and on nearer-term objectives for fulfilling these purposes. It knows why it exists. ii) Commitment to these purposes is always high. iii) Teamwork is focused on the task. iv) Leadership is strong and clear. v) An HPS is a fertile source of inventions and new methods. vi) There is a strong consciousness that “we are different.” vii) Other subsystems of the environment often see HPS as a problem because HPS avoids external control and produces its own standards. viii) HPS is a cohesive unit.

8) The Grid OD program. (pg. 382) a) Designed by Robert R. Blake and Jane S. Mouton, Grid organization development is a systematic approach aimed at achieving corporate excellence by changing the basic culture of the system. b) Grid OD starts with a focus on individual behavior, specifically on the managerial styles of executives. c) The program then moves through a series of sequential phases involving the work team, the relationships between groups, and finally the overall culture of the organization. d) There are six Grid phases: Chapter 14 High-Performing Systems and the Learning Organization .

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i)

Phase 1: (1) Grid seminars someone in a management position attends a public seminar.

(2) The seminar is highly structured and focuses on managerial style, organization culture, and increasing the effectiveness of the whole organization. ii) Phase 2: (1) Teamwork development begins with the top manager and continues through the entire organization.

(2) The team sets group and individual goals. iii) Phase 3: (1) Intergroup development sessions that work with people along the horizontal dimension of the organization.

(2) Sessions are attended by key members of two segments or divisions where barriers exist.

(3) Participants leave the meetings with goals and objectives plus an increased understanding of communication with one another. iv) Phase 4: (1) Development of an ideal strategic model that provides the organization with the knowledge and skills to move from a reactionary approach to one of systematic development.

(2) The concern is with the overall norms, policies, and structure of the organization. v) Phase 5: (1) Implement the ideal strategic model.

(2) The organization is divided into planning teams with coordinators and the model is implemented. vi) Phase 6: (1) There occurs a systematic examination of progress toward change goals through survey use.

(2) Grid OD may be implemented over a period of 5 to 10 years. e) Results of Grid OD programs are documented in anecdotal evidence that suggests an increase in productivity, improvement in managerial style and ability to manage, and increased efficiency.

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OD Applications The Learning Organization at Lafarge (p. 376) SUMMARY Lafarge, with a culture that dates back to its founding in 1833, has a philosophy of participative management.

MAJOR POINTS • • • •

•

Lafarge is the world’s biggest cement producer, with over $15 billion in revenues 133 cement plants, and located in 46 countries.

It has a culture traced to its origins in 1833 when founded by the Lafarge family.

The founders were committed to a form of humanism that still prevails in the company today.

The Lafarge’s philosophy of participative management includes: o A key responsibility for managers is to develop their people. o We expect our people to share their experiences and to seek those of others. o Best practices derive from our ability to recognize and share our local successes. o Dealing with conflict is an integral and productive part of teamwork.

Teamwork is each individual contributing, accepting, and seeking differences of opinion as a source of progress. o Effective teamwork creates an environment of trust and confidence.

Lafarge incorporates principles of the learning organization. o An important element at Lafarge is training. o Managers are required to monitor the development of employees. o The company practices intensive communication to make sure that its worldwide businesses understand its operations. o “Our aim is to become a learning organization,” says the training manager of the cement division.

QUESTIONS 1. Can you explain how a culture can persist in an organization for over 170 years across different owners?

2. Visit the Lafarge Web site at www.lafarge.com to read and critique the “Lafarge way” and other company practices and philosophies. Based on your research, is Lafarge a learning organization? Support your position.

Cisco and High Performing Teams (p. 383) SUMMARY

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Cisco initiated major changes that changed it from an organization that was top-down and highly competitive internally to one where there is cooperation between units and sharing of ideas.

MAJOR POINTS • •

•

• • • •

• • •

Like many companies, the tech wreck of the early 2000s caught including Cisco Systems Inc. and its CEO, John Chambers, off guard.

In 2001, Chambers initiated a massive change. o Revolutionary change was the company’s only chance. o Several years later Cisco was stronger than ever with record profits o Cisco could be a case study of how a discredited industry leader can use a slump to clean house and build a better foundation. o Chambers took the opportunity to rethink every part of the company, including operations, priorities, and culture.

Cisco’s culture before the changes could best be described as a wild west cowboy culture. o Executives were encouraged to compete with one another. o Ideas were pursued with little discipline or accountability.

In the 2000s, the market changed dramatically in what customers expected.

The market now requires engineering, manufacturing, professional services, and sales to work together.

The changes permeated the entire company and not just the top managers.

The structure has a network of councils and boards empowered to launch new businesses and products. o A council is a team of executives who have decision-making authority on $10 billion or greater opportunities. o Boards are teams of managers who make decisions on $1 billion opportunities. o Working groups, similar to ad-hoc committees, deal with a specific issue for a limited time.

The teams that work on major initiatives of specific product lines cut across functional lines and are interdepartmental.

Changing the culture was paramount as the new structure required trust and openness while the old system required cutthroat competitiveness.

To bring people and their ideas together Cisco relies on the technology that it sells such as TelePresence and mobile devices.

QUESTIONS 1. Identify the changes at Cisco that tend to be more structural, behavioral, and technological in nature. How are the three categories of change interconnected at Cisco?

Answer: The major structural change at Cisco occurred in the area of how decisions are made. Prior to the changes, the structure was top-down where decisions were passed up to the top. This delayed the time for projects to be implemented. The new structure gave decision making authority to successively lower levels at Cisco. As well, the teams that work on projects now cut across functional lines. This breaks down some of the barriers that are created by a structure based on functions. With the changes in structure, behavioral changes were required of members so that they could successfully meet the demands of the new structure. Breaking down the functional boundaries meant that people 236

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needed to work, communicate, and cooperate with others in the organization than they previously had. To reinforce cooperation between people who now found themselves in new work-teams, a new financial system was put in place that compensated teams on how well the collective of businesses performed instead of their specific functional unit. Cutting-edge technology was integrated into the new structure that brought people together who were in diverse parts of the company. This facilitated the ability of teams in the new structure to work together.

2. Cisco’s Web site at <URL> www.cisco.com/</URL> has information on its products, services, and applications. Its corporate annual reports have both financial and product information. Research this site to learn of its latest products for online collaboration. Its site for webcasts, which is continuously updated, may have some helpful topics.

3. What is its current financial data for profits, sales, and cash reserves?

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Review Questions 1. Identify and give examples from your experience of the major system-wide OD intervention techniques.

Answer: Answers will vary but should include the following system-wide techniques.

Survey Research and Feedback: Feedback is used to diagnose problems and develop action plans to alter organization structure and work relationships.

The Learning Organization: a system-wide change program that emphasizes the reduction of organizational layers and the involvement of all employees in continuous self-directed learning that will lead toward positive change and growth in the individual, team, and organization.

Reengineering: the fundamental rethinking and radical redesigning of business processes to achieve drastic improvements in performance.

System 4 Management: A continuum is used; the OD practitioner attempts to move functions toward System 4, which is the most effective system.

High Performing Systems (HPS): An excellent human system that performs at high levels of excellence.

The Grid OD Program: Program designed to change corporate culture. There are six phases to the program.

2. Compare and contrast the reasons for successful and unsuccessful change programs.

Answer: Successful change programs consider the total organization as well as its subsystems. This chapter concentrated on total system interventions that view an organization examining (1) the way the organization is designed, (2) the organization’s work process, and (3) the interaction of individuals and teams within the flows and structures of the system.

3. How can managers develop an organizational culture that encourages a high-performing system or a learning organization?

Answer: Create teams where members have different perspectives and ideas.

Break down traditional barriers within the organization. Build leadership skills throughout the organization and recognize that every member of the organization has untapped human potential. Develop and reward creative thinking throughout the organization. Reduce distinctions between organization members including distinctions between line and staff, management and line workers, and professional and nonprofessional. Remain nonjudgmental of others and their ideas; allow people the freedom to take risks.

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KEY WORDS AND CONCEPTS Define and be able to use the following words and concepts: Grid OD - Defines problem areas for OD by going through a series of phases designed to pursue a systematic change approach. (p. 383) Grid phases - Phase 1 - Grid Seminars; Phase 2 - Teamwork Development; Phase 3 Intergroup Development; Phase 4 - Development of an Ideal Strategic Model; Phase 5 - Implementing the Ideal Strategic Model; Phase 6 - Systematic Critique. (p. 384) High-performing system (HPS) - Removal of excessive layers of structure within the organization and the creation of a climate that encourages participation and communication across functional barriers. (p. 381) Ideal strategic model - Phase 4 of the Grid OD program. Management decides what an excellent organization would be and then a model is developed to achieve that excellence. (p. 385) Learning organization - An organization that has developed a continuing capacity to adapt and change. (p. 375) Reengineering - the fundamental rethinking and radical redesigning of business processes to achieve drastic improvements in performance. (p. 379) Survey research and feedback - Practitioners collect data and give feedback to organizations that allow firms to diagnose problems and techniques to change work relationships. (p. 374) System 4 management - A continuum developed by Likert from System 1 to System 4, with 4 being the ideal that firms attempt to achieve. (p. 379) System-level intervention - a structural design framework for viewing an organization that examines (1) the way the organization is designed, (2) the organization’s work process, and (3) the interaction of individuals and teams within the flows and structures of the system (p. 373)

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ADDITIONAL RESOURCES Readings: Argyris, Chris, Donald A. Schön, Organizational Learning II, Theory, Method, and Practice (Reading, MA.: Addison-Wesley Publishing Company, 1996).

Edmondson, Amy C., “The Competitive Imperative of Learning,” Harvard Business Review, July-August 2008, pp. 60-7 Garvin, David A., Amy C. Edmondson, and Francesca Gino, “Is Yours a Learning Organization?,” Harvard Business Review, March 2008, pp. 109-116.

Hamel, Gary, “Moon Shots for Management,” Havard Business Review, February 2009, p. 93.

Likert, Rensis and Jane Gibson Likert, New Ways of Managing Conflict (New York: McGraw-Hill, 1976).

Mils, M. et al., “The Consequences of Survey Feedback: Theory and Evaluation,” in The Planning of Change, ed. W. Bennis, K. Benne, and R. Chin, 2nd ed. (New York: Holt, Rinehart & Winston, 1969). Though this is an older book, it is an excellent source of readings on organization development and planned change.

Nadler, David, Feedback and Organization Development: Using Data-based Methods (Reading, Mass.: Addison-Wesley, 1977). One of the first books on the use of survey research and feedback as it applies to organization development.

Senge, Peter, The Fifth Discipline, The Art And Practice of the Learning Organization (London: Random House, 1990).

Sisodia, Rajendra S., David B. Wolfe, and Jagdish N. Sheth, Firms of Endearment, How World-Class Companies Profit from Passion and Purpose, (Upper Saddle River, New Jersey: Wharton School Publishing, 2008).

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SIMULATION PROCEDURES Simulation 14.1 (p. 387) Brentwood Division 1. Student premeeting preparation: a. Complete Step 1. Prior to class form into teams and select roles. Each student should read only the background information and their role.

2. Discussion points: a. b. c. d.

How task formation is shared.

How problem-solving strategies influence results.

How collaboration and competition affect team problem solving.

Practitioner styles and forming a relationship.

3. Total time suggested: 90 minutes You will need to adjust these times to fit your specific schedule and class plans.

Step 2 Step 3 Step 4 Step 5 Step 6

Minutes 30 10 15 15 15 to 30

Total

85 to 100

Notes

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CASE TEACHING NOTES Tucker Knox Corporation (p. 392) I. Problems A. Macro 1. Members of management seem to be more interested in creating their own “empires” and advancing their individual careers than making sure that Tucker Know succeeds. “Kingdoms” are formed by key managers with their army of followers.

2. There seems to be a climate of distrust among members of management. There is no management team; just individual managers.

3. There is a shallow pool of management talent able to take over in an emergency. This is evident when there was only one person familiar enough with the Ireland plant to take over its operations.

4. Goals and plans do not seem to clear and well defined. Evidence of this is that departments are created and moved around based not on the organization goals but instead on politics and who has the support of Larry Henderson.

B. Micro 1. New and lower level managers such as Ed Leonard are forced to declare their allegiance to their boss; then inherit or suffer the fate of that boss.

II. Causes 1. Henderson’s apparent search for a replacement is keeping the company in turmoil.

2. Henderson was described as “a strong-willed entrepreneur” which for a more mature company is a management style that dominates rather than fosters managers.

3. Managers compete with one another. No plan or action by top management to foster and encourage teamwork.

III. Systems affected 1. Structural – Divisions are created and then moved around not based on goals and plans but instead based on who has the support of Henderson.

2. Psychosocial – Tucker Know is highly politicized. This keeps individuals insecure in their job.

3. Technical – It is likely technical advancements are suffering as departments, such as the automation engineering department, are changed and moved around in the organization.

4. Managerial – Managers create their own empires and compete with one another. There is no management team.

5. Goals and values – The goals are supposedly stated but there is no apparent plan to reach the goals. The culture is one of distrust and where political maneuvering is the predominant method of operations.

IV. Alternatives 1. Bring in an external OD practitioner to implement an OD program. Due to the ingrained problems at Tucker Know, this will take at a minimum of several 242

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years to implement. The problems have been long in the making and they cannot be solved quickly.

2. Henderson retires and moves Jack Donaldson into the position of president and CEO. Henderson may still be on the board of directors but he will truly allow Donaldson to run the company.

3. Henderson retires and announces that he and the board of directors will conduct an international search for the position of president and CEO. 4. Ed Leonard “cuts his losses,” updates his resume, and searches for employment in another company. He has made some significant accomplishments in his three and a half years at Tucker Know and stress this with a prospective employer. It is likely that his former boss, Howard Watson, will be helpful in providing a good recommendation.

V. Recommendations Much depends on Henderson. He is the “father figure” and his management style dominates the company. It will be too disruptive at this point for Henderson to suddenly retire and move someone else into his position. At this point it would be appropriate to bring in an external OD practitioner. The company seems to be in a good financial and competitive condition so that it can sustain the time that an OD program will require. As the OD program moves along, Henderson retires and a search is conducted for his replacement by someone who shares the goals and values of OD.

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STUDENT PREPARATIONS FOR THE NEXT CHAPTER 1. Read Chapter 15.

2. Prepare for OD Skills Simulation 15.1. Prior to class, form teams of six and select roles. Complete Step 1.

3. Read and analyze Case: The Space Electronics Corporation.

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Chapter 15

Organization Transformation and Strategic Change

Learning Objectives 1. Identify and define organization transformation in relation to the change process.

2. Understand the basic strategy-culture matrix and other approaches to changing the culture to fit the strategy.

3. Recognize the importance of corporate culture and its relation to strategy.

4. Experience these concepts in a management simulation.

Student Premeeting Preparation 1. Read Chapter 15.

2. Prepare for OD Skills Simulation 15.1. Prior to class, form teams of six and select roles. Complete Step 1.

3. Read and analyze Case: The Space Electronics Corporation.

Instructor Preparation and Materials 1. Simulations: no special materials are required.

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LECTURE OUTLINE 1) Learning objectives. (pg. 398) a) Identify and define organization transformation in relation to the change process. b) Understand the basic strategy-culture matrix and other approaches to changing the culture to fit the strategy. c) Recognize the importance of corporate culture and its relation to strategy. d) Experience these concepts in a management simulation.

2) Strategy and transformation. (pg. 398) a) The success of great companies begins to work against them when the “pride of position” starts to erode its base. b) Success can work against a company when it looses touch with its customers, corporate visions then become blurred, and a large corporate bureaucracy hinders employees from doing “productive work.” c) When organizations are in desperate need of change or else they will face bankruptcy/takeover, radical changes may be the only choice. d) Organizational transformation refers to drastic changes in how an organization functions and relates to its environment.

3) Organization transformation. (pg. 399) a) The difference between organization development (OD) and organization transformation (OT) is: i) OD strategies represent more gradual approaches to strategic change. ii) OT approaches are drastic, abrupt change to total structures, management processes, and corporate cultures; may or may not be developmental. b) OT tends to use directive approaches to change rather than participative. i) This is usually a top-down, top-management driven process. ii) It requires a clear, shared vision, a willingness to clean house, to reengineer and restructure, and the ability to tackle many problems at once. iii) Research suggests the political dynamics of OT tend to be shaped by the use of power rather than by collaborative, participative approaches. iv) Due to immediate threat, this may be the best way (or only way) to bring the organization back into fit with its environment. c) There are several possible large-scale change strategies. i) Large-scale change approaches are: (1) Incremental—Long-term planned change.

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(2) Transformational—immediate, drastic change. ii) Dunphy and Stace have identified a model of large-scale strategies based on three key dimensions. (see Figure 15.2, Strategies for Planned Organizational Change) (1) Time frame of change—short or long.

(2) Level of support of the organizational culture.

(3) Degree of discontinuity with the environment. iii) Four process change strategies: (1) Participative evolution - incremental; anticipates change; has support of culture through collaborative means.

(2) Charismatic transformation - radical change in a short time with support of culture.

(3) Forced evolution incremental - adjustments over longer period without support of culture.

(4) Dictatorial transformation - used in times of crisis; major restructuring running counter to the internal culture. iv) OD change agents must select the most effective change process and strategy, rather than relying solely on a strategy that is compatible with their own personal values. v) Results of OT. (1) Large-scale change in times of crisis (OT) tends to be shaped more by directive methods rather than participative approaches.

(2) OT may be best or only way to bring back an organization under immediate threat.

(3) Outsiders such as externally recruited executives are more likely to initiate OT than the existing management team.

(4) Research has shown OT is risky and its performance outcomes are uncertain. vi) The key point is that OD practitioners should select the most effective change process and strategy, rather than rely on a strategy simply because it is compatible with their personal values.

4) The corporate culture. (pg. 403) a) Culture includes shared values, beliefs, and behaviors formed by the members of an organization over time. i) CEO’s words alone do not produce culture; the actions of managers do. ii) A corporation’s culture is its major strength when it is consistent with its strategies. b) The strategy-culture fit. i) Strategy.

(1) A course of action used to achieve major objectives.

(2) Concerned with relating the resources of the organization to opportunities in the larger environment.

(3) Increasingly necessary to change business strategy to meet emerging discontinuities in the environment. ii) Culture.

(1) Provides a set of values for setting priorities on what is important.

(2) A critical factor in the implementation of a new strategy.

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c) Core characteristics of culture. i) Refers to a system of shared values held by members that distinguishes one organization from another. ii) Core characteristics include: (1) Individual autonomy.

(2) Sensitivity to the needs of customers and employees.

(3) Support and assistance provided by managers.

(4) Interest in having employees initiate new ideas.

(5) Openness of available communication channels.

(6) Members encouraged to be aggressive and risk-seeking. d) Sharing the vision. i) Vision is a mental image of a possible and desirable future state of the organization that articulates a view of a condition that is better in some important ways than what now exists. ii) Many management theorists feel that vision is the very essence of leadership; it involves several stages. (See Figure 15.3 Sharing the Vision) (1) Share the vision.

(2) Empower the individual.

(3) Develop trust.

(4) Reward performance. e) Strong versus weak cultures. (See Figure 15.4 Relative Strength of Corporate Cultures) i) A strong culture is characterized by the organization’s basic values being both intensely held and widely shared. ii) A weak culture may be seen in a relatively young company or one that has a high turnover of executives and employees. iii) Culture is the product of key components: structure, systems, people, and style. f) The strategy-culture matrix: Four basic alternatives in determining strategy changes are: (See Figure 15.5 The Strategy-Culture Matrix) i) Manage the change (manageable risk) - quadrant 1.

(1) Change important and compatible with culture.

(2) Use cultural acceptance and reinforcement as strategies. ii) Reinforce the culture (negligible risk) - quadrant 2.

(1) Change not as important and compatible with culture.

(2) Forge vision that emphasizes shared values and reinforce existing culture. iii) Manage around the culture (manageable risk) - Quadrant 3.

(1) Change important and incompatible with present culture.

(2) Reinforce value system, reshuffle power to raise key people, and use leverage in the organization. iv) Change the strategy to fit the culture (unacceptable risk) - quadrant 4.

(1) Change is important but incompatible with culture.

(2) Changing the culture is explosive, long-term process that may be impossible.

(3) Determine if strategic change is a viable alternative or if strategy should be modified to fit more closely with existing culture.

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5) Strategic change management. (pg. 408) a) Noel Tichy proposed the strategic change management model, which seeks to align the organization’s strategy, structure, and human resource systems to fit with the organization’s environment. b) Organizations are composed of technical, political, and cultural systems in perpetual interaction with environmental change and uncertainty. (See Figure 15.6 Environmental Forces and Organizational Systems) i) Technical - solve production problems (mission, strategy, organization structure) ii) Political - solve allocation problems of resources and power (reward system, career succession, budgets, power structure) iii) Cultural - solve value/belief problems (shared values, objectives) c) Three steps to change: i) Develop image of desired organization. ii) Separate systems and intervene separately in each one. iii) Plan for reconnecting three systems.

6) Changing the corporate culture. (pg. 409) a) An effective corporate culture can result in superior performance, but an organization’s culture may also inhibit the organization from meeting competitive threats or adapting to changing conditions. b) Five reasons to justify large-scale cultural changes: i) When the company has strong values that do not fit the changing environment. ii) When the industry is very competitive and changes with lightning speed. iii) When the company is mediocre or worse. iv) When the firm is about to join the ranks of the very largest. v) When the firm is small but growing rapidly. c) Cultural change can be difficult and time consuming; major changes to the culture should be attempted only after less-difficult and less-costly solutions have been ruled out.

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OD Applications Transformation at Home Depot (p. 400) SUMMARY Though Home Depot is the number-one home-improvement retail chain in the United States, the company outgrew its initial business model and began to encounter problems by the late 1990s and that continued through much of the next decade.

MAJOR POINTS • • • • • • • • • • •

For more than 22 years Home Depot had an unstructured and entrepreneurial culture.

Stores were encouraged to be independent and headquarters was called the store support center.

But by the late 1990s competitor Lowe’s began taking market share and Home Depot’s sales growth declined The board of directors brought in Bob Nardelli as CEO, formerly of General Electric, to turn around a dysfunctional culture.

Nardelli quickly began installing managerial practices that he had seen work at GE. He instituted centralizing purchasing, cleaned up stores, required stores to submit performance data to headquarters, and lowered employee costs The strategy worked in the short term; but without lower level support for the changes, there were unintended consequences.

Nardelli’s attempt at transformation created a culture of revolution, not evolution.

By 2005 Home Depot was struggling though Nardelli’s pay was at $30 million.

In 2007 the board asked Nardelli to renegotiate his pay but instead he quit and collected $210 million as a severance payout.

Nardelli was replaced by Marvin Ellison who has been making a methodical and long-range approach to change.

QUESTIONS 1. Evaluate the positive and negative changes that Nardelli made at Home Depot.

Answer: Nardelli made some prudent and sound changes including centralized purchasing, cleaning up stores, standardized hiring and evaluation practices, and measuring store and manager performance. But it appears that he made mistakes in the implementation, especially in light of Home Depot’s long-held practice of stores being independently operated. His change of lowering employee costs by replacing experienced salespeople with less experienced and lower cost employees had long term consequences of reducing customer satisfaction.

2. To get a sense of the current customer and employee dissatisfaction of Home Depot, enter “I hate Home Depot” or similar words into Google. Observe the dates of the postings to see if the postings have changed in frequency and degree of criticism.

3. Research Home Depot’s current performance and what the company is doing 250

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to bring change. Financial and other company information is available at www.homedepot.com/.

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Review Questions 1. Compare and contrast organization development and organization transformation. How are they similar or dissimilar?

Answer: Organization development is planned strategy to bring about change.

Organization transformation is drastic, abrupt change to total structures that aim for survival in a competitive environment. The changes may or may not be developmental in nature.

1. Suppose you receive a new job offer. What cultural factors would you consider in making a decision?

Answer: Individual answers will differ.

2. Suppose you receive a job offer. What cultural factors would you consider in making a decision?

Answer: Individual answers will differ.

3. How does the culture affect an organization’s ability to change?

Answer: Organizational culture can facilitate or inhibit change in the organization. The strategy-culture matrix helps managers develop strategies for implementing change. Four basic alternatives in determining changes are: (l) manage the change; (2) reinforce the culture; (3) manage around the culture; and (4) change the strategy to fit the culture (see Fig. 15.5).

4. Can you identify the characteristics that describe organization’s culture? Or the culture of this class?

your

Answer: Individual answers will differ.

5. Select an organization and critique how the president or its CEO has articulated a vision to its members?

6. Find an article from Business Week, Fortune, the Wall Street Journal, or another publication that discusses an organization’s culture and identify the strength of the corporate culture using Figure 15.4 as a frame of reference.

Answer: Individual answers will differ.

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KEY WORDS AND CONCEPTS Define and be able to use the following words and concepts: Culture - reflects organization’s past and is rooted in firm’s history and mythology. It influences how managers approach problems, react to competition, and implement new strategies. (pg. 404) Incremental approach - refers to long-term planned change that relies on collaboration and participation from organization members. (pg. 401) Organization transformation (OT) - drastic, abrupt change to total structures, management processes, and corporate cultures (such as mergers, takeovers, plant closures, and restructuring). (pg. 399) Strategic change management - this model focuses on an alignment between an organization’s strategy, structure and human resources systems and a fit between them and the environment. The organization is composed of three systems: technical, political, and cultural (see Figure 15.6). (pg. 408) Strategy - refers to a course of action used to achieve major objectives; concerned with relating the resources of the organization to opportunities in the larger environment. (pg.

403) Strategy-culture matrix - a model that can be used to assess the readiness of a corporate culture for strategic changes; provides four basic strategies for implementing change within a culture (see Figure 15.5). (pg. 406) Technical, political, and cultural systems - Organizational systems of the strategic change management model. (pg. 408) Transformational change - refers to immediate drastic change accomplished by directive methods. (pg. 401) Vision - a mental image of a possible and desirable future state of the organization. (pg.

405)

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ADDITIONAL RESOURCES Readings: Kotter, John “Leading Change,” Harvard Business Review, vol. 85, no. 1 (January 2007), p 99 Kouzes, James M. and Barry Z. Posner, “To Lead, Create a Shared Vision,” Harvard Business Review, vol. 87, no. 1, (January 2009), pp. 20-21 Maynard, Micheline, The End of Detroit: How the Big Three Lost Their Grip on the American Car Market (New York: Currency/Doubleday, 2003).

Morrell, Margot, Shackleton’s Way: Leadership Lessons from the Great Antarctic Explorer (New York: Viking, 2001.) Leadership lessons from the 1914 Antarctic expedition of explorer Sir Ernest Shackleton and his 28-man crew. See the film description below of Shackleton’s Antarctic Adventure.

Tichy, Noel M. and Andrew R. McGill (eds.), The Ethical Challenge: How to Lead with Unyielding Integrity (San Francisco: Jossey-Bass, 2003).

Tichy, Noel M. with Nancy Cardwell, The Cycle of Leadership: How Great Leaders Teach Their Companies to Win (New York: HarperBusiness, 2002).

Video: Shackleton’s Antarctic Adventure, 2001, NOVA/WGBH Boston (PBS), 40 minutes.

Documentary that includes some of the original footage of the expedition. This is the story of Sir Ernest Shackleton’s legendary 1914-1916 expedition where the 28-man crew survived for two years trapped in the pack ice of Antarctica. Subjects include leadership skills, conflict, goals, team work, culture, norms, and loyalty to the mission and people. A good example of an organization that is facing survival against near impossible odds and the kind of change that is required for their survival. Not everything the expedition does is correct given the luxury of hindsight. Brings together a number of the concepts discussed in the textbook and allows for analyzing their application in a real organization.

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SIMULATION PROCEDURES Simulation 15.1 (pg. 411) The GenTech Company 1. Student premeeting preparation: a. Complete Step 1. Students form into groups of six and select roles. b. Students read the GenTech Company background, terminology, and strategy descriptions. c. On an individual basis, students record choices for strategies, allocate resources and record percentages.

2. Discussion points: a. Discuss parameters of team effectiveness: i. Determination of optimal strategy. ii. Completion of task in least amount of time. b. Determine risk level ratings for individuals, team, and ratings from other individuals.

3. Total time suggested: 90 minutes You will need to adjust these times to fit your specific schedule and class plans.

Step 2 Step 3 Step 4 Step 5 Step 6 Step 7

Minutes 30 10 10 15 10 15

Total

90

Notes

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CASE TEACHING NOTES The Space Electronics Corporation (pg. 417) 1. Problems A. Macro 1. Firm needs to decide whether to pursue new state-of-the-art prime contracts.

2. Wide differences in management’s view about pursuing the projects with little discussion.

3. Departments, such as R&D, are isolated from one another.

B. Micro 1. None apparent.

2. Causes 1. Profitability has been declining, new contracts would boost firm.

2. Market share has been declining.

3. Systems affected 1. Structural – none apparent though if the contracts are obtained there will likely be reorganization.

2. Psychosocial – managers seem to be willing to disagree with one another but do not discuss or try to resolve issues.

3. Technical – indication that R&D is not well integrated with other areas of the company which can affect ability of company to respond to unfolding opportunities.

4. Managerial – except for engineering and marketing, the plan for going after the new contracts had not been discussed—even among affected departments.

5. Goals and values – risk-taking is not a value among managers but this is influenced by corporate management. In addition, there seems to be a lack of full discussion of different points of view.

4. Alternatives 1. Pursue prime contracts.

2. Try to remain profitable as subcontractor.

3. All of the departments jointly hold detailed discussions on the contracts that include feasibility, costs, rewards, etc.

4. If the contracts are not pursued, then management decides what are the other options for Space Electronics in the face of no other major projects coming up for the next few years.

5. Recommendations The executive committee holds detailed discussions on the contracts. In the meetings conduct comprehensive discussions including feasibility, costs, and rewards. Also, discuss other options if contracts are not pursued. In the face of declining future major projects, Space Electronics’ opportunities are diminished if they do not try to become the 256

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prime contractor. They may get small pieces of the contracts as a subcontractor but this is not assured and may not be enough to sustain Space Electronics. Without risk-taking the firm will not be able to grow. Without innovation and creativity, the firm will stagnate.

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STUDENT PREPARATIONS FOR THE NEXT CHAPTER 1. Read Chapter 16.

2. Complete the Profile Survey and Profile Form in Simulation 16.1, Part A, Step 1.

3. Complete Step 1 of OD Skills Simulation 16.2.

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Chapter 16

The Challenge and the Future for Organizations

Learning Objectives 1. Understand the basic issues in using organization development as an approach to planned change.

2. Recognize ways of maintaining, internalizing, and stabilizing a change program.

3. Identify some of the future trends and problems facing the OD practitioner.

4. Understand the process of terminating the practitioner-client relationship.

Student Premeeting Preparation 1. Read Chapter 16.

2. Complete the Profile Survey and Profile Form in Simulation 16.1, Part A, Step 1.

3. Complete Step 1 of OD Skills Simulation 16.2.

Instructor Preparation and Materials 1. Simulations: You may want to reproduce The Bob Knowlton Case answer sheet for Simulation 16.2. It is located in the Simulation Procedures section.

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LECTURE OUTLINE 1) Learning objectives. (pg. 420) a) Understand the basic issues in using organization development as an approach to planned change. b) Recognize ways of maintaining, internalizing, and stabilizing a change program. c) Identify some of the future trends and problems facing the OD practitioner. d) Understand the process of terminating the practitioner-client relationship.

2) The organization of the future. (pg. 420) a) Leading companies envision an endlessly changing organization. b) Reconfigurable is a term that describes an organization that is flexible and able to change on an annual, monthly, weekly, daily, or even hourly time frame. c) People are achieving higher educational levels, with a resulting increase in the level of motivational needs. d) When OD is used in an organization, its results have to be measured. e) Criteria of effectiveness for OD practitioner: i) Stability of the OD effort after implementation. ii) Ability of client system to maintain innovation or the development of a selfrenewal capacity. f) Because change is never ending, the completion of one change cycle leads to another.

3) Monitor and stabilize the OD program. (pg. 421) a) This chapter covers the fifth stage of an OD program: self-renewal, stabilize, evaluate, and disengage. (See Figure 16.1, Stage Five of Organization Development’s Five Stages) b) Stage 5 involves four factors. i) Feedback. ii) Stabilize and monitor the change. iii) Evaluate the OD program results. iv) Termination of the practitioner and client relationship. c) The feedback of information. i) Information is returned to participants. ii) Commitment to change is reinforced by feedback and support.

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iii) Program effectiveness is measured by the degree to which problems have been corrected. iv) The information that is fed back may be readily available data such as production and accounting figures. v) Data may also have to be obtained from interviews, questionnaires, “organization mirror,” and benchmarks to measure change over time. d) The stabilize and monitor change. i) There is acceptance and adoption of the change program.

(1) It is important to guard against deterioration and “fade out.”

(2) Reinforcement of the change is necessary and can occur with the following: (a) Participating employees and divisions see themselves as an elite group and sell the benefits; they become “disciples” of the change. (b) If the OD program is initiated in one division, the results are used to demonstrate the effectiveness to another division. (c) Practice and familiarity with the new methods help to reinforce the change and institutionalize it. ii) Continued assessment of change efforts during future periods helps to guard against degradation over time. e) Evaluate the OD program. i) Evaluations are important for three groups.

(1) Decision makers.

(2) OD participants.

(3) OD practitioners. f) Termination of the practitioner and client relationship. i) Termination of the relationship is the final stage of the OD process. ii) Termination may occur when the basic change objectives are accomplished. iii) Either the practitioner or the client believes that little more can be accomplished or there is a diminishing rate of return for the efforts expended. iv) Disengagement will likely call for a gradual reduction of the practitioner’s help. v) Characteristics of disengagement (1) Both client and consultant mutually agree on reduced involvement.

(2) Involvement does not drop to zero, but may continue at a low level.

(3) The door is always open for further work. g) Self-renewal. i) Disengagement occurs when: (1) The benchmarks used to evaluate change have been achieved.

(2) The client system seems capable of continuing self-renewal and innovation. ii) Self-renewal means building innovation and commitment to change into the organization’s values. iii) The OD program should have developed within the organization an ability to innovate constantly. iv) The self-renewing organization is constantly able to initiate new strategies leading to continued innovation.

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4) Emerging issues and values. (pg. 424) a) OD is a growing, developing, and changing field of study. b) The field is still in transition, which makes it difficult to define what is or is not an OD intervention. c) Is OD a fad or discipline? i) OD has over 50 years of background history. ii) Rather than fad, OD appears to be a primary method for helping organizations adjust to accelerated change. iii) As a result, OD is not a fad, but an emerging discipline. iv) Too often managers use interventions as gimmicks or quick fixes rather than facing problems. v) OD is contributing a technology that will be required even more as the rate of change increases. vi) OD is changing like the world around us.

(1) It has moved far beyond its historical roots.

(2) It is continually adding new approaches and techniques as new problem areas emerge. d) The role of values. i) In the application of OD, practitioners face several complex dilemmas. e) Professionalism of OD. (1) Some question OD because it is ill-defined and lacks a common body of knowledge.

(2) There is a lack of empirical evidence to provide scientific validity to some of the OD interventions. f) No certification of OD practitioners. g) OD has an overemphasis on human and social interventions. h) OD is less able to deal with conditions of distrust, power, and conflict. i)

OD has limitations dealing with short-term, crises situations.

5) Future trends in organization development. (pg. 427) a) Future trends in OD. i) Organization transformation (OT). ii) Shared vision. iii) Innovation. iv) Trust. v) Empowerment. vi) Learning organization. vii) Reengineering. viii) Core competencies. ix) Organizational architecture.

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b) Macrosystem trends in OD. i) Impact of culture change. ii) Total resource utilization. iii) Centralization vs. decentralization. iv) Conflict resolution. v) Interorganization collaboration. c) Interpersonal trends in OD. i) Merging line and staff functions. ii) Resource linking. iii) Integrating quality and productivity. iv) Diversity. v) Networking. vi) Rewarding. d) Individual trends in OD. i) Intrinsic worth. ii) Change in individuals. iii) Effects of thinking. iv) Health and fitness. v) Interdependence.

6) The future of OD. (pg. 429) a) The course of change anticipated for OD will surround the issues of a changing workforce, global competence, and transformation within the organization. b) Organization development is an expanding and vital technology. c) There is a need for more empirical studies on OD interventions. d) There is a lack of ability for OD to deal effectively with external systems and power-coercive problems. e) When the controversies over approaches and techniques subside, and when the discipline becomes stagnant, then there will be an even deeper need to worry about the future of OD.

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OD Applications No Job Is Safe and Never Will Be (p. 429) SUMMARY The nature of work and what you will be doing in the future will change constantly.

MAJOR POINTS • • • • •

No career is safe and the career that you are preparing for today will likely not be the career you pursue for much of your life.

The shift in jobs to cheaper overseas labor markets that first began in manufacturing now includes software engineers, lawyers, CPAs, financial analysts, and medical specialists.

Most companies say about outsourcing, “We have to outsource in order to stay competitive.”

For organizations and individuals, being innovative and on the cutting-edge is a never-ending and always vigilant activity.

Career suggestions include: o Avoid jobs that can be broken down into repeatable steps. They are good candidates to either be replaced by computer software or sent to a lowerpaid worker in a cheaper labor market. o Search for jobs that require flexibility, problem-solving, creativity, and a lifetime of learning. o Jobs likely to remain in-country include work that cannot be performed off the work site, such as repairing a complicated machine. o Factory workers who will most likely keep their jobs are those who excel in computer-controlled equipment or can quickly respond to one-of-akind orders. o Work that relies on complex communication skills will probably not be outsourced. o Jobs that require frequent interactions with other people, often face-toface, will remain and flourish. o Employees with good people skills and employees who have experience with multicultural teams will have an advantage. o Get a college education and then keep going to college.

QUESTIONS 1. What are you doing to become or remain competitive in the job market?

2. Can you think of some other careers that are safe from being outsourced?

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Review Questions 1. Identify some of the conditions for the success of an OD program.

Answer: a. The organization is under pressure to improve and top management is supportive. b. Change begins at top of organization with the support and involvement of top management. c. Top management plays a direct role in the change program. d. Commitment to change, participation, and involvement is true of all levels of the organization. e. A gradual change occurs. Innovations are tested in one division before companywide introduction. f. Success reinforces change.

2. Is OD an emerging discipline or only a passing fad?

Answer: OD is considered an emerging discipline. It has over 50 years of history. OD has also developed several new approaches to innovations for organizations. OD has been used to revitalize and renew companies through its approach to change.

3. Do you agree or disagree with the criticisms of OD? Answer: Individual answers will vary.

Critics wonder if OD will adapt its own discipline to new challenges. Firms are facing more social distress because of the increased complexity of new technology. New OD methods will be needed in the future; these new methods should be more comprehensive.

Additional techniques and empirical studies are needed. The fact that there are so many questions indicates a healthy discipline. If OD practitioners were complacent, the discipline would not be changing and then there would be a need for worry about OD and its future.

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KEY WORDS AND CONCEPTS Define and be able to use the following words and concepts: Fade-out - this may occur in an OD program when change is not stabilized into the system and behavior slips back into a previous mode. (p. 422) Feedback - required by those involved in an OD program in order that they may determine whether to modify, continue, or discontinue their activities. (p. 421) Individual trends - One of the future trends of OD. This trend focuses on the personal level. (p. 428) Interpersonal trends - One of the future trends of OD. This trend focuses on team and group dynamics. (p. 428) Macrosystem trends - One of the future trends of OD. This trend focuses on the organizational system. (p. 428) Reconfigurable - an organization that is flexible and able to change on an annual, monthly, weekly, daily, or even hourly time frame. (p. 420) Self-renewal - building innovation and commitment to change into the organization’s values. (p. 423) Stabilizing the changes - ensuring that the change program will continue. Preventing deterioration of the change efforts and reverting to previous behaviors. (p. 421)

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ADDITIONAL RESOURCES: Readings: Bradford, David L. and W. Warner Burke (Editors), Reinventing Organization Development: New Approaches to Change in Organizations, (San Francisco: Pfeiffer, 2005.)

Christensen, Clayton M. and Michael E. Raynor, The Innovator’s Solution: Creating and Sustaining Successful Growth (Boston: Harvard Business School Press, 2003).

Collins, James C., How the Mighty Fall : And Why some Companies Never Give In. (New York: HarperCollins Publishers, 2009).

Collins, James C., Good To Great : Why Some Companies Make the Leap--And Others Don’t, (New York: HarperBusiness, 2001).

Garlow, James L., 21 Irrefutable Laws of Leadership Tested By Time: Those Who Followed Them--And Those Who Didn’t (Nashville, Tenn.: Thomas Nelson Publishers, 2002).

Gladwell, Malcolm, Outliers: The Story of Success, (New York: Little, Brown and Co., 2008.)

Lencioni, Patrick, The Five Dysfunctions of a Team: A Leadership Fable, (San Francisco: Jossey-Bass, 2002).

Maxwell, John C., The 21 Irrefutable Laws of Leadership: Follow Them and People Will Follow You, (Nashville, Tenn.: Thomas Nelson, 2007.)

Rath, Tom, Strengths Based Leadership: Great Leaders, Teams, and Why People Follow (New York: Gallup Press, 2008.)

Rath, Tom, StrengthsFinder 2.0: A New and Upgraded Edition of the Online Test from Gallup's Now, Discover Your Strengths, (New York: Gallup Press, 2007.)

Video: The Target Shoots First, 2000, 70 minutes. Documentary. Directed, written, produced, and filmed by the lead character. A recent 22 year old college graduate goes to work at Columbia House and video tapes his work and experiences. He is a production manager for the mail order record business at Columbia. Subjects include learning the culture, norms, and psychological contracts. At the time this was written, this film was shown on the Sundance TV channel but not available. It may have since become available. This is a good film to lead off the semester. The film is also appropriate to be used in Chapters 1 and 3.

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SIMULATION PROCEDURES Simulation 16.1 (p. 432) OD Consultant Behavior Profile II 1. Students premeeting preparation: a. Students should complete Step 1 including the Profile Survey and the Profile Form (The Profile Form is in Chapter 2). b. Participants should compare the results in this simulation to results of Profile I, which was completed in Simulation 2.1.

2. Suggestions: a. Reiterate that participation in the simulation provides an opportunity for candid feedback and a chance to practice practitioner skills.

3. Discussion points: a. b. c. d. e.

Developing skills in goal setting and changing behaviors.

Developing skills in listening and using feedback.

Exploring the consulting role in an ongoing situation.

Increasing your self-renewal capability.

Remind the class of the goals that were set and new skills that were developed. Review the progress made since the first Consultant Profile was completed. Students have hopefully developed a self-renewal capability.

4. Total time suggested: 45 to 60 minutes You will need to adjust these times to fit your specific schedule and class plans.

Step 2 for each person

Minutes 15 - 20

Total

45 - 60

Notes

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Simulation 16.2 (p. 437) The OD Practitioner 1. Student premeeting preparation: a. Complete Step 1. Read the Bob Knowlton Case and answer the seven questions at the end.

2. Instructor premeeting preparation: a. Reproduce the answer sheet for the Bob Knowlton Case.

3. Discussion points: a. This case can draw upon many of the concepts covered in the text. Have the class summarize their findings in the case. b. This review will be a good opportunity to bring closure to the class and discuss the next step in the students’ learning and career.

4. Total time suggested: 90 minutes You will need to adjust these times to fit your specific schedule and class plans.

Step 2 Step 3 Step 4

Minutes 30 30 30

Total

90

5. Answer Sheet The answer sheet to the Bob Knowlton case is on the following page. You may want to reproduce this page to give to the class.

Notes

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Answers to the Bob Knowlton Case Question 1 2 3 4 5 6 7

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Answer b d d c d c d

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