Organization Development and Change Mariann Benke University of Pécs, Faculty of Business and Economics Source: Thomas G. Cummings - Christopher G. Worley •Introduction to •Organization Development and Change •Mariann Benke •E-mail: benkem@ktk.pte.hu –Research fields: –Change management –Organizational Development –Management and Organization –Organizational Behaviour • Mariann Benke - University of Pécs 2 •Mariann Benke - University of Pécs Learning Objectives •To provide a definition of Organization Development (OD) •To distinguish OD and planned change from other forms of organization change •To describe the historical development of OD •To understand how leadership is linked to change activities •To describe and compare three major perspectives on changing organizations. •To describe how planned change can be adopted to fit different kinds of conditions •To understand the different elements of a successful change program • • 3 •Mariann Benke - University of Pécs Burke’s Definition of OD •OD is a planned process of change in an organization’s culture through the utilization of behavioral science technology, research, and theory. 4 •Mariann Benke - University of Pécs French’s Definition of OD •OD refers to a long-range effort to improve an organization’s problem-solving capabilities and its ability to cope with changes in its external environment with the help of external or internal behavioral-scientist consultants. 5 •Mariann Benke - University of Pécs Beckhard’s Definition of OD •OD is an effort (1)planned, •(2) organization-wide, and •(3) managed from the top, to •(4) increase organization effectiveness and health through •(5) planned interventions in the organization’s “processes,” using behavioral science knowledge. 6 •Mariann Benke - University of Pécs Beer’s Definition of OD •OD is a system-wide process of data collection, diagnosis, action planning, intervention, and evaluation aimed at: (1)enhancing congruence between organizational structure, process, strategy, people, and culture; (2)developing new and creative organizational solutions; and (3)developing the organization’s self-renewing capacity. •It occurs through collaboration of organizational members working with a change agent using behavioral science theory, research, and technology. 7 Geert Hofstede •Gerard Hendrik (Geert) Hofstede (born 2 October 1928) •Dutch social psychologist, former IBM employee, and Professor Emeritus of Organizational Anthropology and International Management at Maastricht University in the Netherlands, •well known for his pioneering research on cross-cultural groups and organizations. • •Dimensions of national cultures: •Power distance index (PDI) •Individualism vs. collectivism (IDV) •Uncertainty avoidance index (UAI) •Masculinity vs. femininity (MAS) •Long-term orientation vs. short-term orientation (LTO) •Indulgence vs. restraint (IND) Mariann Benke - University of Pécs 8 Culture differences by Hofstede Mariann Benke - University of Pécs 9 Culture differences by Hofstede Mariann Benke - University of Pécs 10 Culture differences by Hofstede Mariann Benke - University of Pécs 11 •Mariann Benke - University of Pécs Organization Development is... •a system-wide application and transfer of behavioral science knowledge to the planned development, improvement, and reinforcement of the strategies, structures, and processes that lead to organization effectiveness. • 12 •Mariann Benke - University of Pécs •1950 1960 1970 1980 1990 2000 Today Five Stems of OD Practice • •Laboratory Training •Action Research/Survey Feedback •Normative Approaches •Quality of Work Life • Strategic Change Human Capital Approach from Garry S. Becker, Nobel Prise 1962 Resource-based view 1984 13 •Mariann Benke - University of Pécs •Part I: •The Nature of Planned Change The OD Practitioner • •Part II: The Process of Organization Development • •Entering & Diagnosing Diagnosing Collecting •Contracting Organizations Groups & Jobs Diagnostic • Information • •Feeding Back Designing OD Leading and Evaluating & •Diagnostic Data Interventions Managing Institutionalizing • Change Change 14 •Mariann Benke - University of Pécs • •Part III: •Human •Process •Interventions • •Individual, •Interpersonal, •& Group •Process •Approaches • •Organization •Process •Approaches •Part IV: •Techno-structural •Interventions • •Restructuring •Organizations • •Employee •Involvement • •Work Design • •Part V: •Human •Resources •Management •Interventions • •Performance •Management • •Developing and •Assisting •Members • • •Part VI: •Strategic •Interventions • •Competitive and •Collaborative •Strategies • •Organization •Transformation • • • •Part VII: Special Topics in Organization Development •Organization Development OD in Nonindustrial Future Directions •in Global Settings Settings in OD • 15 OD planned change: M&A activity •Mercedes + Daimler Benz = Benz&Cie à Mercedes-Benz (1926 - …) J 16 OD planned change: M&A activity Mariann Benke - University of Pécs 17 •BMW + Rover à (1994 – 1998) L OD planned change: M&A activity •Daimler + Chrysler = DaimlerChrysler (1998 – 2005) L • Mariann Benke - University of Pécs 18 OD planned change: M&A activity •Renault + Nissan à 1999 J • • • •Renault + Nissan + Mitsubishi à 2015 ? Mariann Benke - University of Pécs 19 •Mariann Benke - University of Pécs • Lewin’s Change Model (1954) •Unfreezing •Movement •Refreezing • • 20 Kotter’s 8-Step Process for Leading Change (1996) Mariann Benke - University of Pécs 21 •Mariann Benke - University of Pécs •General Model of Planned Change • • • • •Evaluating •and •Institutionalizing •Change •Planning •and •Implementing •Change •Diagnosing •Entering •and •Contracting 22 •Mariann Benke - University of Pécs Different Types of Planned Change •Magnitude of Change –Incremental –Radical •Degree of Organization –Over-organized –Under-organized •Domestic vs. International Settings • •https://www.youtube.com/watch?v=__IlYNMdV9E 23 •Mariann Benke - University of Pécs Critique of Planned Change •Conceptualization of Planned Change –Change is not linear –Change is not rational –The relationship between change and performance is unclear •Practice of Planned Change –Limited consulting skills and focus –Quick fixes vs. development approaches 24 •Mariann Benke - University of Pécs •Motivating Change •Creating Vision •Developing •Political Support •Managing the Transition •Sustaining Momentum •Effective •Change •Management Change Management Activities 25 •Mariann Benke - University of Pécs Motivating Change •Creating Readiness for Change –Sensitize the organization to pressures for change –Identify gaps between actual and desired states –Convey credible positive expectations for change •Overcoming Resistance to Change –Provide empathy and support –Communicate –Involve members in planning and decision making 26 •Mariann Benke - University of Pécs Creating a Vision •Discover and Describe the Organization’s Core Ideology –What are the core values that inform members what is important in the organization? –What is the organization’s core purpose or reason for being? •Construct the Envisioned Future –What are the valued outcomes? –What is the desired future state? 27 •Mariann Benke - University of Pécs Developing Political Support •Assess Change Agent Power •Identify Key Stakeholders •Influence Stakeholders 28 •Mariann Benke - University of Pécs Sources of Power and Power Strategies for Change Agents •Knowledge •Others’ Support •Personality •Playing it Straight • • • •Knowledge •Others’ Support •Personality • • • •Playing it Straight •Using Social •Networks •Going Around the •Formal System •Individual Sources of Power •Power Strategies 29 Examples for human power •Ford 1968: •https://www.youtube.com/watch?v=DZ509hHkHO8 • •Iron Lady (1979 – 1990): •https://www.youtube.com/watch?v=hZrAKdlX0SA • Mariann Benke - University of Pécs 30 •Mariann Benke - University of Pécs Managing the Transition •Activity Planning –What’s the “roadmap” for change? •Commitment Planning –Who’s support is needed, where do they stand, and how to influence their behavior? •Change-Management Structures –What’s the appropriate arrangement of people and power to drive the change? 31 •Mariann Benke - University of Pécs Change as a Transition State • • • •Current •State •Transition •State •Desired •Future •State 32 •Mariann Benke - University of Pécs Sustaining Momentum •Provide Resources for Change •Build a Support System for Change Agents •Develop New Competencies and Skills •Reinforce New Behaviors •Stay the Course 33 •Restructuring Organizations: Contingencies Influencing •Structural Design • •Environment •Organization •Size •Technology •Organization •Goals •Worldwide •Operations •Structural •Design Mariann Benke - University of Pécs 34 Structural Design •Functional Organization •The Divisional Organization •The Matrix Organization •The Process-Based Structure •The Network Organization Mariann Benke - University of Pécs 35 •Cummings & Worley, 8e (c)2005 Thomson/South-Western •14-36 The Reengineering Process •Prepare the organization •Specify the organization’s strategy and objectives •Fundamentally rethink the way work gets done –Identify and analyze core business processes –Define performance objectives –Design new processes •Restructure the organization around the new business processes. Organization Development and Change Mariann Benke University of Pécs, Faculty of Business and Economics Source: Thomas G. Cummings - Christopher G. Worley •Thank you for your attention!