Lecture 1 notes

CHAPTER 1 - Introduction

MANAGING IN A CHANGING ENVIRONMENT

- For the purposes of sustainability, organisations need to be able to implement both incremental and
transformational change!
- Managing change requires organisational and management skills to compete in a mature market and
develop new products and services. (Tushman & O'Reilly, 1996)

WHAT IS YOUR THEORY OF CHANGE?

Do you think change moves in a straight line from A to B?
How do you react to change?
How does your family react?
How did your parents react?
How do you make sense of Figure 1.1? What are the main elements involved in a process of change?
Is the management of change necessary? Important?

WHAT IS ORGANISATION DEVELOPMENT?

● Organisation development is a system wide application of behavioural science knowledge to the planned
development and reinforcement of organisational strategies, structures and processes for improving an
organisation's effectiveness.
^Paraphrased - Organization development involves applying behavioural science knowledge
across the entire system of an organisation, with the aim of intentionally enhancing and reinforcing
its strategies, structures, and processes to improve organisational effectiveness.
● Organisation development is a planned process of change in an organisation's culture through the utilisation
of behavioural science technology, research and theory.
● Organisation development refers to a long-range effort to improve an organisation's problem-solving
capabilities and its ability to cope with changes in its external environment with the help of external or
internal behavioural-scientist consultants, or change agents, as they are sometimes called.
 ● Organisation development is an effort:
(1) planned
(2) organisation-wide
(3) managed from the top
(4) increase organisation effectiveness and health through
(5) planned interventions in the organisation's 'processes', using behavioural science knowledge.

● Organisation development is a system-wide process of data collection, diagnosis, action planning,

intervention and evaluation aimed at:
○ Enhancing congruence between organisational structure, process, strategy, people and culture
○ Developing new and creative organisational solutions, and
○ Developing the organisation's self-renewing capacity

OD occurs through the collaboration of organisational members working with a change agent using
behavioural science theory, research and technology.

Critical Question: Why have these words, phrases, been underlined?

* *Notes from tutorial (underlined words in OD definition) ****

ORGANISATION DEVELOPMENT: VIEWS FROM THE FIELD

Organisation development is a 'soft' approach that describes a process of change undertaken in small incremental
steps managed participatively (Dexter Dunphy & Doug Stace, 1994)

Based on a set of values, largely humanistic, application of the behavioural sciences, and open systems theory,
organisation development is a system-wide process of planned change aimed toward improving overall organisation
effectiveness by way of enhanced congruence of such key organisation dimensions as external environment,
mission, strategy, leadership, culture, structure, information and regards systems, and work policies and procedures
WHAT MAKES OD UNIQUE? (6)

1. OD applies to an entire system

2. OD is based on behavioural science knowledge and practice
3. OD is oriented to improve an organisation's effectiveness through processes of adaptive development
4. OD creates change and also reinforces it
5. OD encompasses strategy, structure and process changes
6. OD is oriented towards improving organisational effectiveness

CLASS ACTIVITY AND CRITICAL QUESTIONS

Give examples to delineate between OD and OT.
What are the major differences?
Can you suggest a 'middle ground' or compromise?

THE INTERDEPENDENCY OF CHANGE PROCESSES

Critical Activity: Apply an example of where this change process is evident. (That is, if you change one
aspect then it has an impact on all other facets.)

(EXTRA TEXTBOOK NOTES)

First, OD applies to changes in the strategy, structure, and/or processes of an entire system, such as an organisation, a
single plant of a multiplant firm, a department or work group, or individual role or job. A change program aimed at
modifying an organisation's strategy, for example, might focus on how the organisation relates to a wider environment and
on how those relationships can be improved. It might include changes both in the grouping of people to perform tasks
(structure) and in methods of communicating and solving problems (process) to support the changes in strategy. Similarly,
an OD program directed at helping a top management team become more effective might focus on interactions and
problem-solving processes within the group. This focus might result in the improved ability of top management to solve
company problems in strategy and structure. This contrasts with approaches focusing on one or only a few aspects of a
system, such as technological innovation or operations management. In these approaches, attention is narrowed to
improvement of particular products or processes, or to development of production or service delivery functions.

Second, OD is based on the application and transfer of behavioural science knowledge and practice, including micro
concepts, such as leadership, group dynamics, and work design, and macroapproaches, such as strategy, organisation
design, and international relations. These subjects distinguish OD from such applications as management consulting,
technological innovation, or operations management that emphasise the economic, financial, and technical aspects of
organisations. These approaches tend to neglect the personal and social characteristics of a system. Moreover, OD is
distinguished by its intent to transfer behavioural science knowledge and skill so that the system is more capable of
carrying out planned change in the future.

Third, OD is concerned with managing planned change, but not in the formal sense typically associated with management
consulting or project management, which tends to comprise programmatic and expert-driven approaches to change.
Rather, OD is more an adaptive process for planning and implementing change than a blueprint for how things should be
done. It involves planning to diagnose and solve organizational problems, but such plans are flexible and often revised as
new information is gathered as the change program progresses. If, for example, there was concern about the
performance of a set of international subsidiaries, a reorganisation process might begin with plans to assess the current
relationships between the international divisions and the corporate headquarters and to redesign them if necessary.
These plans would be modified if the assessment discovered that most of the senior management teams were not given
adequate cross-cultural training prior to their international assignments.
 Fourth, OD involves the design, implementation, and the subsequent reinforcement of change. It moves beyond the initial
efforts to implement a change program to a longer-term concern for appropriately institutionalising new activities within the
organisation. For example, implementing self-managed work teams might focus on ways in which supervisors could give
workers more control over work methods. After workers had more control, attention would shift to ensuring that
supervisors continued to provide that freedom. That assurance might include rewarding supervisors for managing in a
participative style. This attention to reinforcement is similar to training and development approaches that address
maintenance of new skills or behaviours, but it differs from other change perspectives that do not address how a change
can be institutionalised.

Finally, OD is oriented to improving organisational effectiveness. Effectiveness is best measured along three dimensions:
adaptable, high financial and technical performance, satisfied and loyal customers and an engaged, satisfied, and
learning workforce.

1. First, OD affirms that an effective organisation is adaptable; it is able to solve its own problems and focus
attention and resources on achieving key goals. OD helps organisation members gain the skills and knowledge
necessary to conduct these activities by involving them in the change process.
2. Second, an effective organisation has high financial and technical performance, including sales growth,
acceptable profits, quality products and services, and high productivity. OD helps organisations achieve these
ends by leveraging social science practices to lower costs, improve products and services, and increase
productivity.
3. Finally, an effective organisation has satisfied and loyal customers or other external stakeholders and an
engaged, satisfied, and learning workforce. The organisation's performance responds to the needs of external
groups, such as stockholders, customers, suppliers, and government agencies, which provide the organisation
with resources and legitimacy. Moreover, it is able to attract and motivate effective employees, who then
perform at higher levels. Other forms of organisational change clearly differ from OD in their focus.
Management consulting, for example, primarily addresses financial performance, whereas operations
management or industrial engineering focuses on productivity.

WHY STUDY ORGANISATIONAL DEVELOPMENT?

The knowledge gained from studying organisation development is playing an increasingly important role in helping
organisations change themselves. There are three major trends to which organisations need to understand and
respond effectively:
1. Globalisation is changing markets and environments
2. Information technology is changing work and knowledge
3. Managerial innovation is responding to these trends and accelerating their effect on organisations

SHORT HISTORY OF OD: FIVE DEVELOPMENTS

CLASS ACTIVITY AND CRITICAL QUESTIONS
Referring to Figure 1.4:
Can you add what have been the developments over the past five years?
What are the current OD practices?
Hint: In updating the figure, consider recent management fads and fashions that lasted the test of have not time (e.g.
Quality Management).

CURRENT OD PRACTICE
Organisation development basically emerged from 5 main backgrounds or stems:

1. LABORATORY TRAINING
Origin: T-groups
T-group is a small unstructured group in which participants learn from their own interactions and evolving dynamics
about such issues as interpersonal relations, personal growth, leadership and group dynamics.
Now: Team Building
T-group stvle development expanded into business and
Critical Questions: This technique is now used in recruitment strategies. How is this done? Have you had experience
of such a process? Does this remind you of the TV series 'Survivor'?

(EXTRA NOTES)
● In 1946, Lewin and colleagues conducted T-group training at the National Training Laboratory. This involved
small, unstructured groups introspecting their own behaviors, experiences, and group dynamics. This was a
highly successful program and went on to receive Carnegie Foundation’s support for its programs in 1948
and 1949, and it became a permanent program for NTL in the National Education Association. During the
1950s, there were more and more regional laboratories and the T-group sessions expanded in time and
scope into businesses and industries.
● Richard Beckard was the first to coin the term “OD” in 1958 and also conducted laboratory experiments at
NTL. As T-group declined in use as intervention, the activities of T-group came to be known as team
building, which is one of the most often used interventions today.

—————————

2. ACTION RESEARCH/SURVEY FEEDBACK

Origin
Researchers John Collier, Kurt Lewin and William Whyte found that research must be closely linked to action to be
useful in managing change.

Now
OD practitioners now use action research cycles and surveys to help gather information about an issue or problem
before a change process starts.
Class Debate: 'It is not the process of gaining feedback, but what you do with it.

(EXTRA NOTES)
Action research is a scientific process of gathering organisational data, giving feedback, analysing and
discussing the result with client groups and taking cooperative actions for developing the organisation.

In the 1940s, social scientists showed that research for organisational improvement can only meet its goals
if it is collaborated with action by consultants and organisational members. This stem basically tries to
understand what the organisational members feel before design and implementation of any OD or change is
carried out. Hence, it was important for social scientists to collaborate with the organisational members for
data collection related to the Organization’s processes, problem identification and problem solving.

(more notes?)
————————-

3. PARTICIPATIVE MANAGEMENT

Origin
Likert found that participative management was the most effective way to make change happen. He identified four
systems:
1. Exploitative authoritative systems (autocratic; top-down)
2. Benevolent authoritative systems (paternalistic)
3. Consultative systems (workers involved; management decides)
4. Participative systems (managers and staff involved in all levels of decision making).

Now
Debates about levels of staff involvement in managing change.
Critical Question: What are the issues of importance in these debates?

(Extra notes)
Likert identified which of the four categories an organisation fell into: (EBCP)
i) Exploitative authoritative system (autocratic; top-down)
ii) Benevolent authoritative system (paternalistic)
iii) Consultative system (workers involved; management decides)
iv) Participative system (managers and staff involved in all levels of decision making).

The participative system was considered the ideal state for the organisation. It was the most effective way to
make change happen.

————————-

4. PRODUCTIVITY AND QUALITY OF WORK LIFE

Origin
Eric Trist examined the technical and human sides of organisations and how they interrelate.
Aimed at improving productivity AND quality of workers' lives: an early example of win-win.

Now
Strongly aligned to TQM developed by Deming and Duran and pioneered by Toyota, Ericsson and Sheraton.

5. STRATEGIC CHANGE
Origin
Beckhard was one of the first to use strategic thinking to align both the organisation's relationship to its environment
and the fit between its technical, political and cultural systems.

Now
A competitive OD strategy involves the whole organisation and is multi-levelled: might include finance and marketing,
as well as using team building, action research and survey feedback.

Critical Thinking Activity

The previous approached are evidence that there is
'nothing new' and that today's theories are the evolution of previous approaches. For example,
Is HRM based on Machiavelli's The Prince?
Is Strategic Management based on General Sun Tzu's
The Art of War?

Critical Activity: Research these publications and identify similarities

EXTRA NOTES
As the technological, social, and political environments of the Organization became more complex and
interlaced, the need for planned change process was observed at the system level. This stem systematises
the Organization’s vision, culture, and environment. The underlying assumption here is that organisational
productivity and employee satisfaction would increase if all the three factors were aligned

————————-

THE EVOLUTION OF ORGANISATIONAL DEVELOPMENT

Expansion of the OD network

● Growth in professional societies

● Growth in educational programs

New theorists, researchers & practitioners

● Gen 1: Argyris, Bennis, Schein, Beckhard & Tannenbaum

● Gen ?: Burke Greiner. I awler III. Maraulies & Raia
● Gen 3: YOU!

————————-
Wider network of use of OD

● A now-international span of organisations using the OD approach, both for business and broader
organisational development

THE LIMIT OF OD? THE RISE OF ORGANISATION TRANSFORMATION

Calls for OT arise when:

- There is a crisis
 - OT approaches can respond quickly, often perceived as a 'quick fix' and observable, which may even
receive significant coverage in the media as a result

Where the environment may be unpredictable and planning would be difficult

The factors pressing the change are external
OT also calls for a different leadership style than for OD
OT is regarded as more 'revolutionary' and OD and more 'evolutionary'

Critical questions: Do you agree or disagree with these statements? Why why not?
————————-
SUMMARY
As organisations and their surrounding economy become more complex and uncertain, the scale and intricacy of
organisational change has increased.
Organisational change is a fact of life.
Organisation Development has become a significant approach to planning change using behavioural science.
This has been shown to enable organisations to become more effective.
Unpredictable environments, external factors and crises have seen the development of OT as another aspect of
organisation responsiveness to change.
————————-
Learning outcomes: lecture slides

1. Describe both organisation development (OD) and organisation transformation (OT), and explain their
similarities and differences.
2. Explain the relevance of OD and its role within organisations.
3. Analyse the evolutionary historical context of OD and have an understanding of its future.
4. Assess the environment of OT and comment on its relevance in today’s change environment.

—------------

QUIZ 1

1. With which of the following areas do organisation development (OD) practitioners need to be familiar to
implement strategic change?
a. competitive strategy
b. Finance
c. Economics
d. marketing
e. all of the above

2. The most distinguishing characteristic of early quality-of-work-life (QWL) programs was:

a. the quality of work performed
b. the development of self-managing work groups
c. the involvement of unions in decision making
d. the use of job-enrichment techniques
e. the development of interesting work settings

3. Which of the following is NOT a focus of laboratory or T-group training?

a. personal growth
b. interpersonal relations
c. leadership
d. incremental evolution
e. group dynamics

4. Organisational change describes:

a. any change faced by organisations
b. processes for reinventing organisational effectiveness
c. externally mandated changes for organisations
d. techniques for developing organisational capabilities
e. internally motivated changes in organisations

5. Which of the following affects productivity?

a. reward systems
b. work flows
c. management styles
d. physical work environment
e. all of the above

6. Which of the following is NOT one of the 'stems' of organisation development (OD)?
a. laboratory training
b. environmental analysis
c. action research/survey feedback
d. strategic change
e. participative management and quality of work life (QWL)

7. Which of the following is EXCLUDED from the definition of organisation development (OD)?
a. OD consists of small, incremental steps managed participatively
b. OD focuses on all forms of organisational change
c. OD is a system-wide process
d. OD impacts on organisationeffectiveness
e. OD draws on behavioural science knowledge

8. Three major trends are shaping change in organisations:

a. structural, technical and cultural change
b. political, technological and cultural change
c. political, technical and cultural change
d. globalisation, information technology and managerial innovation
e. globalisation, strategic change and leadership change

9. Organisation transformation (OT) often receives considerable coverage in the media because it is:
a. revolutionary and therefore more popular with the general public
b. at the cutting-edge of strategic management thinking
с. absolutely necessary for modern organisations to sustain a competitive advantage
d. often perceived as an observable 'quick fix' to rapid changes in the external environment
e.more important than organisation development (OD) techniques which are only internally focused

10. Today the field of organisation development (OD) is expanding due to:
a. globalisation and information technology
b. expansion of the OD network
c. development of new theorists, researchers and practitioners
d. all of the above
e. none of the above