MGMT628 Final-Term Short Notes by MƦ Sɦǟɦɮǟʐ

Short notes by Mʀ Sɦǟɦɮǟʐ
MGTM628 – Organizational Development

Final-term Short notes by
Mʀ Sɦǟɦɮǟʐ
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Lesson 19
Diagnosing Groups and Jobs
Individual-Level Diagnosis in Organization Development focuses on

diagnosing and improving individual job roles within an organization.
Inputs:
1. Organization Design: This includes the overall structure, technology,

measurement systems, and culture of the organization. It influences how individual
jobs are designed and perceived.
2. Group Design: Refers to the characteristics of the larger group or department to

which the individual job belongs. Factors like group norms, composition, and task
structure impact job design.
3. Personal Characteristics: These include age, education, experience, skills, and

individual motivations. They affect how individuals perform in their jobs and
respond to different job designs.
1 Organization Development – MGMT 628 | Mʀ Sɦǟɦɮǟʐ

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Design Components:
The model identifies five key dimensions of individual jobs:
1. Skill Variety: The range of different activities and skills involved in the job.
2. Task Identity: The extent to which the job requires completing a whole,
identifiable piece of work.
3. Task Significance: The impact of the job on others or the organization.
4. Autonomy: The level of freedom and discretion employees have in scheduling

their work and making decisions.
5. Feedback about Results: The clarity and directness of information employees

receive about their job performance.
Fits:
Effective job design requires fitting these inputs and design components to
achieve desired outcomes like high performance and job satisfaction:
1. Fit with Organization and Group Design: Jobs should align with the broader
organizational and group contexts. Enriched jobs (high on the five dimensions) fit
well with flexible, innovative organizational cultures, while routine jobs fit with
bureaucratic structures.
2. Fit with Personal Characteristics: Jobs should match the skills, abilities, and
growth needs of job holders. Enriched jobs are suitable for individuals with high
growth needs and complex skills, while routine jobs suit those with basic skills and
lower growth needs.

Continuous monitoring and adjustment of job design are crucial to ensure

alignment with organizational goals and individual capabilities. By understanding
and optimizing these factors, organizations can enhance job satisfaction,
performance, and overall effectiveness.
This approach underscores the importance of tailoring job roles to fit both
organizational contexts and individual characteristics, thereby maximizing
productivity and employee satisfaction.
Lesson 20
Collecting and Analyzing Diagnostic information
1. Timing of Diagnostic Activities:
- Timing is crucial as it affects the readiness and receptiveness of organizational

participants to engage with diagnostic data. It's essential to consider when to
collect and analyze data in relation to when it will be most useful and actionable.
2. Extent of Participation:
- This dimension focuses on who is involved in the diagnosis process. It can

range from unilateral decisions by top management to inclusive processes
involving multiple levels of the organization and external consultants. The level of
participation impacts the breadth and depth of data collected and the buy-in for
subsequent interventions.
3. Confidentiality vs. Group Surfacing of Data:

- This dimension addresses how data is gathered and shared. In early stages
where trust is low, individual interviews with anonymous responses may be
necessary. As trust increases, group settings can facilitate more open discussion of
organizational dynamics.
4. Pre-selection vs. Emergent Selection of Variables:
- Refers to whether diagnostic variables are predefined or emerge based on initial

data analysis. Different methods, such as surveys with preset questions or open-
ended interviews, influence the breadth and specificity of data collected.
5. Integration into Long-term Strategy:
- Diagnostic activities should ideally be integrated into a broader organizational

development plan. This ensures that findings lead to actionable insights and
continuous improvement rather than isolated events driven by sporadic interests.
6. Organizational Planning and Avoidance of Whims:
- Reactive, ad-hoc diagnostic activities can lead to resistance and undermine the
credibility of the process. A systematic approach aligned with organizational goals
promotes acceptance and meaningful participation.
7. Nature of the Target Population:
- Understanding the characteristics and dynamics of the target group (e.g., size,
interdependencies) impacts the feasibility and effectiveness of diagnostic efforts.
In OD, involving the same group in both providing and analyzing data enhances
understanding and commitment to change initiatives.

These dimensions collectively emphasize the importance of strategic planning,

inclusivity, confidentiality, and responsiveness in conducting effective diagnostic
activities within organizational development efforts. Each dimension plays a
crucial role in ensuring the validity, relevance, and impact of the diagnostic
process on organizational dynamics and outcomes.
The importance of technique selection in collecting and analyzing diagnostic

information within organizational development:
Importance of Technique Selection in Data Collection and Analysis:
1. Type of Technique Used: Techniques such as questionnaires versus interviews,

and individual versus group data surfacing, significantly impact the quality and
depth of data collected.
2. Building Relationships and Trust: Techniques like interviews allow for face-
to-face interactions that can build trust and rapport between the OD practitioner
and organization members. This trust is crucial for obtaining honest and
comprehensive data.
3. Effectiveness of Diagnostic Techniques: For instance, assigning diagnostic

tasks to subgroups during workshops can yield powerful insights. The composition
of these groups (e.g., heterogeneous or homogeneous in terms of rank, position, or
personality traits) affects the amount and candor of data generated.

4. Confidentiality Assurance: Techniques must address confidentiality concerns.

OD practitioners must clarify who will have access to the data and assure
respondents of confidentiality to encourage openness and honesty in responses.
5. Alignment with Organizational Goals: The chosen techniques should align

with the overall developmental strategy of the organization. This ensures that data
collection efforts lead to actionable insights and support meaningful organizational
change initiatives.
6. Facilitating Participation: Techniques that facilitate participation, such as

inclusive data gathering methods involving various organizational levels and roles,
enhance the validity and acceptance of the diagnostic process.
7. Feedback and Iterative Improvement: The data collection technique should

enable effective feedback mechanisms, allowing organization members to see how
their input contributes to the diagnostic process and subsequent interventions.
The choice of data collection and analysis techniques in organizational

development is crucial. It influences trust-building, data validity, participant
engagement, and the overall success of change initiatives. By selecting appropriate
techniques aligned with organizational goals and ensuring clear communication
regarding confidentiality and purpose, OD practitioners can maximize the
effectiveness of diagnostic activities.
The Data-Collection Process

1. Importance of Data Collection:
- Crucial step in Organization Development (OD) programs.
- Aims to identify specific problems and gather relevant information about client
systems.
- Ensures actions are based on accurate knowledge, enhancing the program's

success.
2. Definition of Objectives:
- First step involves clearly defining program objectives.
- Necessary for determining relevant information and selecting appropriate data

collection methods.
- Preliminary data gathering helps clarify initial problem conditions.
3. Selection of Key Factors:
- Identifying central variables (e.g., turnover, communication breakdown).
- Deciding which factors are critical for diagnosing client system problems.
- Shift towards broader issues like organizational culture and values.
4. Selection of Data-Gathering Method:
- Choosing a method depends on the nature of the problem.
- Methods include questionnaires, interviews, observations, and unobtrusive

measures.

- Each method has strengths (e.g., quantifiability, richness of data) and

weaknesses (e.g., biases).
Methods for Collecting Data:
- Questionnaires:
- Advantages: Quantifiable responses, easy to summarize, suitable for large

samples.
- Potential Problems: Response biases, predetermined questions may miss

issues.
- Interviews:
- Advantages: Rich data, adaptive, builds rapport.
- Potential Problems: Expensive, interviewer bias, self-report biases.
- Observations:
- Advantages: Real-time data on behavior, adaptive.
- Potential Problems: Observer biases, reliability issues, sampling

inconsistencies.
- Unobtrusive Measures:
- Advantages: Non-reactive, high face validity, easily quantified.

- Potential Problems: Access and retrieval difficulties, validity concerns.
Questionnaires, interviews, observations, and unobtrusive measures as

methods for data collection in Organization Development (OD) programs:
Questionnaires
- Definition and Use:
- Questionnaires are paper-and-pencil measures with fixed-response queries about

organizational features.
- Efficient for collecting data from large numbers of people simultaneously.
- Easily analyzed, especially with computer assistance, allowing for quantitative

comparison and evaluation.
- Types:
- Standardized: Based on explicit models of effectiveness, with predetermined

questions (e.g., Survey of Organizations).
- Customized: Tailored to specific organizational needs, often combined with

standardized instruments.
- Advantages:
- Quantifiable responses.
- Useful for standardized comparisons.

- Quick analysis and feedback to employees.
- Drawbacks:
- Limited to questions asked, little opportunity for probing or clarification.
- Impersonal nature may lead to less honest responses.
- Prone to response biases, such as social desirability bias.
Interviews
- Widely used for direct, personal, and flexible data gathering.
- Effective for exploring motives, values, and attitudes.
- Provides two-way communication, allowing for deeper understanding of

organizational issues.
- Types:
- Structured: Follows a predefined set of questions, either open-ended or closed.
- Unstructured: Allows flexibility in questioning, more open-ended.
- Advantages:
- Yields rich, detailed data not accessible through other methods.

- Builds rapport and encourages frank disclosure.
- Drawbacks:
- Time-consuming to conduct and analyze.
- Prone to interviewer biases and respondent biases.
- Requires skilled interviewers to ensure data validity.
Observations
- Direct observation of organizational behaviors in their functional settings.
- Ranges from participant observation to detached observation (e.g., using film or

videotape).
- Advantages:
- Free from self-report biases.
- Provides real-time data on behavior.
- Allows direct contact with observed behaviors.
- Drawbacks:
- Requires interpretation, potentially introducing biases.

- Difficulties in standardizing observations.
- Sampling issues can bias data collection.
Unobtrusive Measures
- Data collected from secondary sources like company records and archives.
- Includes absenteeism records, financial performance data, etc.
- Advantages:
- Objective view of organizational functioning.
- Quantifiable and suitable for statistical analysis.
- Perceived as "real" by organization members.
- Drawbacks:
- Difficulty in collecting and interpreting data.
- Potential biases due to changes in recording methods.
- May lack specific data required for analysis.
Each method has its strengths and limitations, making them suitable for different
aspects of organizational diagnosis and evaluation in OD programs. The choice of
method depends on the specific objectives of the data collection, the nature of the
information needed, and the organizational context. Combining multiple methods

often enhances the validity and comprehensiveness of the data collected, mitigating
biases inherent in any single method.
Lesson 21
Collecting and Analyzing Diagnostic information
A Comparison of Different Methods of Data Collection

Questionnaires
- Advantages:
- Quantifiable and easy to summarize responses.
- Suitable for large samples, relatively inexpensive.
- Can gather a large volume of data.
- Potential Problems:
- Lack of empathy due to predetermined questions.
- Issues like non-responses and over-interpretation.
- Potential bias in responses.
Interviews
- Advantages:
- Provides rich, detailed data.

- Allows for empathy and rapport building.
- Expensive and time-consuming.
- Interviewer bias and interpretation challenges.
- Relies on self-reporting, which can be biased.
Observations
- Advantages:
- Collects behavioral data in real-time.
- Adaptive to changing contexts.
- Expensive, requires skilled observers.
- Risk of observer bias and sampling inconsistencies.
Unobtrusive Measures
- Advantages:
- Non-reactive, avoids response bias.
- High face validity, easily quantifiable.
- Challenges in accessing and interpreting data.
- Validity concerns without direct interaction.

Sampling Considerations:
- Importance of Sampling: Ensures data representativeness when not collecting

from entire populations.
- Types of Sampling: Includes simple random sampling and stratified sampling

for more complex populations.
- Issues Addressed: Ensures adequate representation and validity of collected

data.
Implementation of Data Collection:
- Methods Used: Commonly includes interviews, observations, group interviews,

questionnaires, and existing document review.
- Operational Aspects: Includes design, distribution, and collection of data

instruments.
- External Agents: Often preferred for data collection to enhance respondent trust
and candor.
Analysis of Data:
- Techniques Used: Ranges from straightforward methods to sophisticated

statistical analyses.

- Considerations: Includes coding, statistical analysis, and comparison across

organizational divisions or management levels.
In evaluating the effectiveness of data collection in the context of Organization

Development (OD), several critical criteria need consideration:
Criteria for Evaluating Data Collection Effectiveness:
1. Validity of the Data:
- Ensure that the data collected align with the intended dimensions of
measurement. OD often deals with subjective parameters like attitudes and values,
which require careful design of measurement instruments to capture accurately.
2. Time to Collect Data:
- Assess how long it will take to gather data using different techniques. Time
constraints are crucial as data collection often takes longer than anticipated.
Balancing thoroughness with timeliness is essential to maintain project schedules.
3. Cost of Data Collection:
- Evaluate the financial resources required for data collection. Large-scale

interviewing or extensive surveys can be costly in terms of both monetary
investment and personnel time. Consider the budget constraints and aim for cost-
effective methods that yield reliable data.

4. Organization Culture and Norms:
- Adapt data collection techniques to fit the organization’s culture. Consider

whether employees are likely to be open and transparent or hesitant and reserved.
This cultural insight helps in selecting methods that encourage candid responses
and minimize bias.
5. The Hawthorne Effect:
- Be aware of the potential influence of observation on participant behavior. The

Hawthorne effect suggests that individuals may modify their behavior when they
know they are being observed. Minimize this effect through careful planning and
ethical considerations in data collection methods.
6. Data Comparability with Subjective Awareness:
- Use data collection to complement intuitive understanding of organizational

issues. Hard data obtained through systematic methods can validate or challenge
subjective perceptions, providing a more comprehensive basis for decision-
making.
Focusing on qualitative data analysis techniques and force-field analysis in

Organization Development (OD):
Techniques for Analyzing Data:
Qualitative Tools:

- Content Analysis: This method is effective for summarizing qualitative data,

especially from interviews. It involves categorizing responses into meaningful
themes.
- Steps in Content Analysis:
1. Read responses to understand recurring comments.
2. Generate themes that capture these recurring comments.
3. Categorize responses into these themes to identify prevalent issues or

attitudes.
- Force-Field Analysis: Based on Kurt Lewin’s change model, this method

categorizes organizational change factors into forces for change and forces
maintaining the status quo.
- Steps in Force-Field Analysis:
1. Identify forces promoting change and those resisting it.
2. Determine the strength or ranking of these forces.
3. Visualize the analysis using diagrams to show the balance between forces.
Evaluating Effectiveness (Continued):
- Data Analysis Techniques: Balance between qualitative (easier to use, interpret)

and quantitative (provides accurate readings) techniques.
- Criteria for Evaluation: Validity of data, time and cost considerations, cultural
fit of techniques, and addressing the Hawthorne effect.

- Effectiveness of Data Collection: Emphasizes gathering hard data to

complement intuitive understanding of organizational issues.
Figure 27: Force-Field Analysis of Work Group Performance
- Context: A hospital management identified a 6% daily absentee rate as a

concern.
- Objective: Aimed to reduce absenteeism to 3%, highlighting a "performance

gap".
- Method: Used force-field analysis to assess factors influencing absenteeism.
- Outcome: Strategies included reducing restraining forces, increasing driving

forces, or both.
Figure 28: Example of the Use of Force-Field Analysis
- Quantitative Tools: Describes methods for analyzing quantitative data.
- Tools Covered: Means, standard deviations, frequency distributions,

scattergrams, correlation coefficients, and difference tests.
- Example: Table 5 shows means and standard deviations for organizational

rewards, highlighting differences in perceived value among employees.
Means, Standard Deviations, and Frequency Distributions
- Mean and Standard Deviation: Summarize average score and variability of

responses.
- Importance: Standard deviation complements mean by showing response

distribution.
- Example: Table 5 illustrates values of organizational rewards, emphasizing

variation in employee perceptions.
Frequency Distributions of Responses
- Definition: Graphical representation showing how responses are distributed

across categories.
- Example: Table 6 compares responses on pay and supervisor praise, despite

having the same mean, they exhibit different distributions.
Scattergrams and Correlation Coefficients
- Purpose: Explore relationships between variables using visual and quantitative

methods.
- Example: Table 7 and Figure 29 illustrate the relationship between change orders
and conflicts, suggesting a positive correlation between these variables.
Figure 29: Scattergram of Change Order versus Conflict
- Description: Visual representation showing relationship between change orders

and conflicts.
- Correlation Coefficient: Measures strength and direction of relationship (+1.0 to

-1.0).
- +1.0: Perfect positive relationship.
- -1.0: Perfect negative relationship.
- 0: No relationship (shotgun scattergram).

Difference Tests
- Purpose: Compare sample against norms or between groups to assess

differences.
- Applications:
- Comparing sample against standards.
- Comparing two or more groups on variables like job satisfaction or absenteeism.
- Assessing changes over time within a group.
Feeding Back Diagnostic Information
- Importance: Critical step in the diagnostic process to engage organization

members.
- Effective Feedback Criteria:
1. Relevant: Meaningful to organization members.
2. Understandable: Presented in an easily interpretable form (e.g., graphs,

charts).
3. Descriptive: Linked to real organizational behaviors.
4. Verifiable: Valid and accurate.
5. Timely: Provided promptly after collection and analysis.
6. Limited: Avoid overwhelming with excessive data.
7. Significant: Focus on actionable problems.
8. Comparative: Provide benchmarks for context.

9. Un-finalized: Stimulate further discussion and problem-solving.
Characteristics of Feedback Process
- Structure: Requires organized approach (e.g., agenda, discussion leader).
- Attendance: Include relevant stakeholders to address identified problems.
- Power Dynamics: Clarify authority to implement changes.
- Process Facilitation: OD practitioner assists in maintaining focus and productive

discussion.
- Ownership: Ensure organization members take responsibility for data and action
plans.
Figure 31: Possible Effects of Feedback
- Impact: Arouses organizational action and problem-solving.
- Success Factors: Content relevance and effective process determine feedback's

effectiveness.
Lesson-22
Designing Interventions
An organization development intervention involves a series of deliberate actions

aimed at enhancing an organization's performance and effectiveness. These
interventions range from standardized programs applicable across various

organizations to customized approaches tailored specifically to an organization's

unique needs.
Criteria for Effective Interventions:
Effective interventions in organization development (OD) are characterized by

three main criteria:
1. Relevance to Organizational Needs: Interventions must align closely with the

organization's requirements and the perceptions of its members. They should be
based on accurate diagnostic information that reflects the organization's
functioning and address primary concerns.
2. Knowledge of Intended Outcomes: Successful interventions are grounded in a

solid understanding of the expected results. This requires reliable knowledge that
the intervention can produce the desired changes, though this area in OD research
is still evolving.
3. Enhancement of Change Management Competence: OD interventions should

empower organization members to manage future changes independently. Through
active participation in the intervention process, members should acquire the skills
and knowledge necessary to navigate ongoing organizational changes effectively.
Designing Effective Interventions:
Contingencies Related to the Change Situation:

1. Individual and Organizational Factors: Various individual differences among

organization members, such as autonomy needs, and organizational factors like
management style and technical uncertainty, significantly influence intervention
success. Understanding these factors helps in adapting interventions to suit specific
organizational contexts.
2. Readiness and Capability for Change: The organization's readiness and

capability to undergo planned change are crucial. Readiness indicators include a
sensitivity to external pressures, dissatisfaction with current conditions, availability
of resources, and commitment from management. Interventions may need to focus
initially on building readiness before implementing specific changes.
3. Cultural Context: The national culture in which an organization operates

influences how interventions are perceived and accepted. Interventions must be
tailored to fit cultural values and norms to ensure they are effective across different
cultural settings.
4. Skills of the Change Agent: The effectiveness of OD interventions also

depends on the competence of the change agent leading them. Change agents
should assess their skills against the intervention's requirements and be transparent
about their capabilities to ensure the intervention's success.
Contingencies Related to the Target of Change:

1. Specific Organizational Issues: Interventions are designed to address particular

organizational issues identified during diagnosis. Understanding these issues helps
in tailoring interventions to achieve meaningful changes.
2. Level of Impact: Interventions can target various levels within an organization,

such as individual, group, or organizational systems. The level chosen impacts the
intervention's scope and effectiveness, requiring careful consideration during
design.
Types of OD Interventions and Organizational Issues
Organizations face several interconnected issues that affect their functioning

and effectiveness. These issues are pivotal targets for Organization
Development (OD) interventions, each aimed at resolving specific
organizational challenges.
Key issues and corresponding OD interventions,
1. Strategic Issues:
- Description: Concerned with decisions regarding products, markets,

environmental relations, and organizational transformation to adapt to changing
conditions.
- OD Interventions (Strategic Interventions): Integrated strategic change,

mergers and acquisitions, trans-organizational development, organization learning.
2. Technology and Structure Issues:

- Description: Focus on how work is divided among departments, coordination

mechanisms, product/service delivery methods, and alignment with strategic goals.
- OD Interventions (Techno-structural Interventions): Organization design,

employee involvement programs, work design.
3. Human Resources Issues:
- Description: Involve attracting talent, goal-setting, performance appraisal,

career development, stress management.
- OD Interventions (Human Resources Management Interventions):

Performance management systems, career development programs, stress
management interventions.
4. Human Process Issues:
- Description: Address social processes among organization members such as

communication, decision-making, leadership, and group dynamics.
- OD Interventions (Human Process Interventions): Conflict resolution, team

building, interpersonal skills training, leadership development.
Integration and Systemic Thinking:
- These organizational issues are interconnected and influence each other. Effective
OD interventions must consider these interdependencies to achieve comprehensive
organizational improvement.
- For instance, decisions made in strategic interventions must align with structures
designed in techno-structural interventions, supported by HR practices, and
managed through effective human process interventions.

Organizational Levels:
- Organizations operate at multiple levels—individual, group, organization-wide,

and sometimes across organizations.
- OD interventions target these levels differently:
- Individual Level: Personal development programs, skills training.
- Group Level: Team-building exercises, conflict resolution workshops.
- Organization Level: Structural redesign, culture change initiatives.
- Trans-organization Level: Partnerships, alliances, and collaborations.
- OD interventions often impact multiple levels simultaneously, necessitating a

systemic approach in their design and implementation.
Types of Interventions and Organization Levels
Organizational Development (OD) interventions target various levels within

an organization to address specific issues and improve overall effectiveness.
Human Process Interventions
These interventions focus on interpersonal relationships and group dynamics

within organizations.
1. T-group (Training Group)
- Description: Facilitates experiential learning about group dynamics,

leadership, and interpersonal relations among participants.
- Primary Levels Affected: Individual, Group
2. Process Consultation
- Description: A consultant helps groups diagnose and resolve interpersonal and

group process issues such as dysfunctional conflict and poor communication.
- Primary Levels Affected: Group, Organization
3. Third-party Intervention
- Description: Involves a neutral third party assisting in resolving interpersonal

conflicts through methods like problem-solving and conciliation.
4. Team Building
- Description: Aims to enhance the effectiveness of work groups by improving

team dynamics and task performance strategies.
Large Group Interventions
These interventions involve large-scale meetings to address organizational issues

collectively.
1. Organization Confrontation Meeting

- Description: Mobilizes organization members to identify and address

immediate organizational problems collaboratively.
- Primary Levels Affected: Organization
2. Inter-group Relations
- Description: Focuses on improving interactions and resolving conflicts

between different groups or departments within the organization.
3. Large-group Interventions
- Description: Engages a broad spectrum of stakeholders in addressing

organizational issues, creating awareness, and fostering organizational change.
4. Grid Organization Development
- Description: Provides a structured approach to managing organizations, often

using standardized instruments to measure and improve organizational practices.
Techno-structural Interventions
These interventions focus on organizational structure and technology.

1. Structural Design
- Description: Redesigns organizational divisions and work processes to

enhance efficiency and adaptability.
2. Downsizing
- Description: Reduces organizational size and bureaucracy to improve cost-

effectiveness and operational efficiency.
3. Reengineering
- Description: Radically redesigns core business processes to improve workflow

integration and performance.
Human Resources Management Interventions
These interventions focus on integrating people into organizational processes

effectively.
1. Goal Setting
- Description: Establishes clear and challenging goals to align individual and

organizational objectives.

2. Performance Appraisal
- Description: Systematic assessment of individual or group performance to

provide feedback and support development.
3. Reward Systems
- Description: Designs organizational rewards to improve motivation and

performance.
- Primary Levels Affected: Individual, Group, Organization
Strategic Interventions
These interventions link organizational strategy with its external environment.
1. Integrated Strategic Change
- Description: Aligns organizational strategy and systems to respond effectively

to external and internal disruptions.
2. Trans-organization Development
- Description: Facilitates alliances and partnerships to address complex

organizational challenges collaboratively.

3. Merger and Acquisition Integration
- Description: Supports the integration of organizations during mergers or

acquisitions to align strategic, leadership, and cultural aspects.
Three interventions for transforming organizations:
1. Culture Change
- Goal: Develop behaviors, values, and norms that align with strategic goals.
- Outcome: Strengthen organizational cohesion and direction.
2. Self-designing Organizations
- Approach: Empower stakeholders to redesign structures and processes.
- Objective: Enhance organizational agility and responsiveness.
3. Organization Learning and Knowledge Management
- Focus: Foster continuous learning and effective knowledge utilization.
- Result: Enable ongoing improvement and innovation within the organization.

These interventions aim to align organizational culture, empower adaptive change,

and foster learning and innovation for sustained organizational success.
Lesson 23
Leading and Managing Change
Overview of Change Activities
After diagnosing the cause of problems or identifying opportunities for

development, organization members start planning and implementing the necessary
changes to improve effectiveness and performance. Organizational Development
(OD) focuses heavily on interventions to improve organizations. Change can range
from simple process improvements to transforming the strategies and design
features of the entire organization.

Change management involves five major activities:
1. Motivating Change: Creating readiness for change and addressing resistance.
2. Creating a Vision: Providing a clear purpose and desired future state.
3. Developing Political Support: Gaining the backing of powerful individuals and

groups.
4. Managing the Transition: Planning the transition from the current state to the
desired future state.
5. Sustaining Momentum: Ensuring that the change is carried through to

completion.
Motivating Change
Organizational change requires moving from the known to the unknown, often
causing uncertainty and resistance. To motivate change, two key tasks are
essential:
1. Creating Readiness for Change:
- Sensitize organizations to external and internal pressures for change.
- Reveal discrepancies between current and desired states.
- Convey credible positive expectations for the change.
2. Overcoming Resistance to Change:
- Empathy and Support: Understand people's experiences and provide support.

- Communication: Reduce uncertainty by effectively communicating the

changes and their consequences.
- Participation and Involvement: Involve members in planning and

implementing changes to ensure commitment.
The Life Cycle of Resistance to Change
Resistance to change typically progresses through five phases:
1. Phase 1: Initial few advocates face significant opposition.
2. Phase 2: Forces for and against change become identifiable.
3. Phase 3: Direct conflict between supporters and opponents.
4. Phase 4: Remaining resistance is seen as stubbornness by the change supporters.
5. Phase 5: Resisters become as few and isolated as the original advocates.
Change efforts can cycle through these phases multiple times if not solidified.
Example: The Environmental Movement
The environmental movement illustrates the five phases of resistance to

change:
1. Phase 1: Environmentalists were initially seen as extremists.
2. Phase 2: Proponents and opponents became identifiable.

3. Phase 3: Legislation such as the Clean Air Act marked significant progress.
4. Phase 4: High-profile confrontations (e.g., Greenpeace vs. Shell) gained global

attention.
5. Phase 5: Environmental responsibility became widely accepted, though

continuous efforts are needed.
So, effective change management requires attention to motivating change, creating

a vision, gaining political support, managing the transition, and sustaining
momentum. Understanding and addressing resistance through empathy,
communication, and involvement are crucial for successful implementation.
Lesson24
Leading and Managing Change:
Contributing to Effective Change Management
Creating a Vision
Creating a vision is essential in leading and managing change, providing a

direction for designing, implementing, and assessing organizational changes. It
helps to energize commitment to change by providing a common goal and
compelling rationale. A successful vision must be achievable and must align with
the organization’s capabilities.

Describing the Core Ideology
Core ideology forms the foundation of a vision and includes the organization's
core values and purpose. These values are not invented but discovered through
discussions about organizational history and key events. Core purpose describes
why the organization exists and guides strategic choices.
Constructing the Envisioned Future
The envisioned future is specific to the change project and includes bold and
valued outcomes and a desired future state. This helps to create an emotionally
powerful vision that motivates members to change.
Developing Political Support
Organizations are seen as coalitions with different preferences and interests.

Significant changes may result in political conflicts. Managing political dynamics
involves understanding power and influence within the organization and using
strategies to gain broad-based support for the changes.
Assessing Change Agent Power
Change agents must evaluate their own sources of power, including knowledge,
personality, and others’ support. This assessment helps to determine how to
influence others and identify areas for enhancing their power.
Identifying Key Stakeholders
Identifying powerful individuals and groups who have an interest in the changes is
crucial. Understanding who stands to gain or lose from the changes helps in

mapping their influence and determining who needs to be influenced to support the
changes.
Managing the Transition
Implementing organizational change involves a transition state from the current

state to the desired future state. This requires special management structures and
activities, including activity planning, commitment planning, and change-
management structures.
Organization Change as a Transition State
Activity Planning:
- Create a road map for change with specific activities and events.
- Clearly identify and link tasks to organization’s change goals and priorities.
- Gain top-management approval, be cost-effective, and adaptable to feedback.
- Include general vision and desired future states supplemented with midpoint
goals.
- Midpoint goals provide concrete, manageable steps and benchmarks.
Commitment Planning:
- Identify key people and groups whose commitment is necessary.
- Formulate strategies to gain their support.
- Develop specific plans for early identification and commitment of key

stakeholders.

Change-Management Structures:
- Create special structures to manage the change process.
- Include individuals who can mobilize resources and guide the change.
- Possible structures include:
- Chief executive managing the effort.
- Project manager coordinating the transition.
- Formal organization managing both change effort and normal operations.
- Representatives of major constituencies jointly managing the project.
- Natural leaders or a cross-section of people from different functions and levels

managing the change.
Sustaining Momentum:
- Provide resources, build support systems, develop new competencies, reinforce

new behaviors, and stay focused.
- Ensure additional financial and human resources for training, consultation, data
collection, feedback, and meetings.
- Build a support system for change agents to cope with tension and isolation.
- Ensure members gain new competencies and skills through multiple learning
opportunities.
- Reinforce desired behaviors with formal rewards and informal recognition.
- Maintain patience and trust in the change process despite initial performance
declines.
- Avoid abandoning change projects prematurely and resist chasing new

management fads.
Case Study: Levi Strauss & Co.
- Engaged in a culture change effort since 1985 focused on diversity,

empowerment, and openness.
- Developed an Aspiration Statement guiding all major decisions and emphasizing

respect, fairness, and involvement.
- Leadership behaviors include directness, openness to influence, commitment to

others' success, personal accountability, and trust.
- Values diversity in workforce and perspectives, provides recognition, practices

ethical management, and empowers employees.
- Implemented experiential training courses for managers and employees to align

with values.
- Performance management system includes "aspirational" objectives and a team-

based organization and incentive pay system.
- Striving for a vision despite challenges in changing established behaviors and

work culture.
Lesson25
Evaluation and Institutionalization in

Organization Development
Evaluation:

- Definition: Evaluation is concerned with providing feedback to practitioners and

organization members about the progress and impact of interventions. It helps
determine if the intervention is successful or if further diagnosis and modifications
are needed.
- Key Aspects: Measurement and research design are critical for effective
evaluation.
- Types of Evaluation:
- Implementation Feedback: Guides the implementation process, ensuring

interventions are carried out as intended.
- Evaluation Feedback: Assesses the overall impact of the intervention,

including whether it should be continued, modified, or terminated.
- Example: In a job enrichment program, initial diagnosis and subsequent rounds

of implementation feedback help refine the intervention, leading to improved
productivity and satisfaction.
Institutionalization:
- Definition: Institutionalization involves making a successful change a permanent

part of the organization's normal functioning.
- Purpose: Ensures the results of successful change programs persist over time.
- Framework: Examines organization characteristics, intervention dimensions,

and processes that contribute to the long-term persistence of intervention effects.
Evaluating OD Interventions:
- Importance: Managers need to justify OD expenditures with tangible outcomes.
- Process:
- Initial diagnosis to identify problems and areas for improvement.
- Selection and implementation of appropriate interventions.
- Continuous feedback loops to refine and assess interventions.
Implementation and Evaluation Feedback:
- Implementation Feedback: Provides ongoing data during the intervention to

guide necessary adjustments.
- Evaluation Feedback: Looks at the long-term effects of the intervention, such as

performance, job satisfaction, absenteeism, and turnover.
Measurement:
- Variables Selection: Should be derived from the theory or conceptual model

underlying the intervention.
- Types of Measures:
- Intervention Variables: Assess how well the intervention is being

implemented.
- Outcome Variables: Measure the impact of the intervention, such as employee

performance and satisfaction.
- Challenges: OD has traditionally focused on outcome variables, often neglecting

the measurement of intervention variables, which are crucial for interpreting
outcome data correctly.
Evaluation and institutionalization are vital stages in the organization development

cycle. Effective evaluation requires careful planning of measurement and research
design, while institutionalization ensures that successful changes are maintained

over time. Continuous feedback and rigorous assessment are essential to justify
OD efforts and make informed resource allocation decisions.
Lesson 26
Evaluating and Institutionalizing
Organization Development Interventions
Measurement: Providing Useful Feedback
Effective implementation and evaluation feedback require selecting appropriate

variables and designing good measures.
Selecting Variables
- Basis: Variables should derive from the theory or conceptual model underlying
the intervention. These should include key features of the intervention and
expected results.
- Example Model: The job-level diagnostic model includes task variety, feedback,
and autonomy. High levels of these elements can lead to high work quality and
satisfaction.
- Intervention and Outcome Variables:

- Intervention Variables: Assess if the intervention is implemented as intended,

e.g., the number of job descriptions rewritten or the extent of cross-training.
- Outcome Variables: Measure the impact of the intervention over time, e.g.,
employee performance and satisfaction.
- Importance of Both Variables: Measuring both is necessary to provide a

comprehensive understanding. Ignoring intervention variables can lead to incorrect
interpretations of outcome measures.
Designing Good Measures
- Operational Definition:
- Specifies the empirical data needed, how they will be collected, and how they
will be converted into information.
- Example: Macy and Mirvis's definitions for behavioral outcomes, reported as

rates adjusted for the number of employees and incidents of behavior, allowing
comparisons across different situations and times.
- Importance: Provides precise guidelines on what characteristics to observe and

how to use them.
- Reliability:
- Definition: The extent to which a measure represents the “true” value of a

variable.
- Improving Reliability:
1. Rigorous Operational Definitions: Clearly specify how data will be

converted into information.

2. Multiple Methods: Use questionnaires, interviews, observation, and

unobtrusive measures.
3. Multiple Items: Use several questions to measure the same variable, e.g., in
the Job Diagnostic Survey, autonomy is measured by multiple questions.
4. Standardized Instruments: Utilize available standardized questionnaires for

measuring OD intervention and outcome variables.
- Validity:
- Definition: The extent to which a measure actually reflects the variable it

intends to measure.
- Improving Validity:
1. Face Validity: Ask colleagues and clients if the measure represents the
variable of interest.
2. Multiple Measures: Use different measures of the same variable to assess

criterion or convergent validity.
3. Discriminant Validity: Ensure the measure does not correlate with unrelated
variables.
4. Predictive Validity: The measure should accurately forecast another variable

over time.
- Using Validated Measures: Improves confidence in results and provides a

standard for new measures. Presenting proposed measures to colleagues and clients
builds ownership and commitment.
For effective organization development, it is crucial to select appropriate variables

and design reliable and valid measures. This ensures that the interventions are

correctly implemented and their impacts accurately assessed, leading to better

decision-making and sustained organizational improvements.
Research Design: Internal and External Validity in OD Interventions
Internal Validity:
- Definition: The extent to which the intervention itself is responsible for the
observed outcomes, ruling out alternative explanations.
- Importance: Ensures confidence in results, crucial for accountability and

resource allocation decisions.
- Challenges:
- OD interventions are often complex with interrelated changes.
- Long-term projects increase the likelihood of external factors influencing

outcomes.
- Existing work units are used instead of randomized groups, making control
challenging.
External Validity:
- Definition: The extent to which the results of an intervention can be generalized

to other situations.
- Secondary to Internal Validity: Without internal validity, external validity is

irrelevant.
Quasi-Experimental Designs:

These designs help address the internal validity challenges of OD interventions.
1. Longitudinal Measurement:
- Measure outcomes over an extended period, ideally starting before the

intervention and continuing through the expected result period.
- Example: Monthly absenteeism rates before and after an intervention.
2. Comparison Unit:
- Compare results from the intervention group with a similar group that did not
receive the intervention.
- Example: Absenteeism rates in a subsidiary with the intervention versus one

without.
3. Statistical Analysis:
- Use statistical methods to rule out random error or chance.
- Helps in confirming that observed changes are due to the intervention.
Example:
- Intervention: Aimed at reducing absenteeism.
- Measurement: Monthly absenteeism rates for four months before and after the
intervention.
- Comparison: A control group with no intervention.

- Result: A significant decrease in absenteeism in the intervention group compared

to stable rates in the control group, with statistical analysis ruling out chance
variations.
Multiple Measures:
- Combine unobtrusive measures (e.g., company records) with obtrusive ones (e.g.,
questionnaires).
- Minimize interaction effects between measurement and intervention.
Types of Change:
1. Alpha Change: Differences along a stable dimension.
2. Beta Change: Recalibration of the measurement dimension.
3. Gamma Change: Redefining the measurement dimension.
Case: The Farm Bank
I. Problems
A. Macro Problems:
1. Unpreparedness of the client system for change.
2. Lack of familiarity and preparedness for the new MIS.

B. Micro Problems:
1. Top-down approach excluded staff from decision-making and preparation for

the MIS.
2. The survey should have preceded the MIS implementation.
3. Hassler is not assertive enough in keeping Swain informed.
4. MIS particulars need modification (information limits, format changes).
5. Wyatt’s survey results are suppressed by Hassler.
II. Causes:
1. Conservative nature of the firm.
2. Lack of education regarding MIS.
3. Poor planning regarding MIS functions.
4. Hassler's focus on personal security over job fulfillment.
III. Systems Affected:
1. Structural: Chain of command restricts improvements.
2. Technical: MIS needs reformatting and limitation adjustments.
3. Behavioral: Wyatt’s job satisfaction is restricted, and staff expectations are

unmet.
4. Managerial: Ineffective information management impacts decision-making.
5. Goals and Values: Excellence and organizational improvement are

undervalued.

IV. Alternatives:
1. Convince Hassler to present the report to Swain.
2. Follow Hassler’s inaction.
3. Wyatt bypasses Hassler and informs Swain directly.
V. Recommendations:
- Wyatt should tactfully convince Hassler of the importance of presenting the

survey results to Swain.
- The report should be submitted to Swain to address identified issues.
- The Farm Bank should involve MIS users in problem-solving and implement
necessary changes with Hassler and Wyatt’s involvement.
This approach ensures the MIS system meets the bank's needs, improving internal
operations and decision-making processes.

Lesson 27
Evaluating and Institutionalizing Organization
Development Interventions
Institutionalizing Interventions
Once a change is determined to be effective, the next step is institutionalizing these

changes, making them a permanent part of the organization. Kurt Lewin described
this process in three stages: unfreezing, moving, and refreezing. Institutionalizing
an OD intervention corresponds to the refreezing stage, ensuring long-term
persistence of organizational changes, making them part of the organizational
culture, and not dependent on any one person.
Importance of Institutionalization
Despite the need for constant change in rapidly evolving environments, the concept
of institutionalization remains relevant. Institutionalizing change itself has become
a focus, enhancing the organization’s capability for continuous change. This
involves developing frameworks that contribute to the institutionalization of OD
interventions and the process of change.
Institutionalization Framework
The framework identifies organization and intervention characteristics and

institutionalization processes affecting the degree to which change programs are

institutionalized. It shows how organization characteristics can influence

intervention characteristics and how these, in turn, affect institutionalization
processes.
Organization Characteristics
1. Congruence: The degree to which an intervention aligns with the organization’s

managerial philosophy, strategy, structure, environment, and other changes.
Congruence facilitates member commitment and diffusion of the intervention.
2. Stability of Environment and Technology: The extent to which the

organization’s environment and technology are stable. Changes in demand or
personnel can affect intervention stability.
3. Unionization: The presence of unions can either hinder or promote diffusion of

interventions, depending on the relationship between union and management and
how changes affect union contract issues.
Intervention Characteristics
1. Goal Specificity: Specific goals help direct socializing activities and

operationalize new behaviors for easier implementation and reward linkage.
2. Programmability: The extent to which changes can be clearly specified in

advance, enabling better socialization, commitment, and reward allocation.

3. Level of Change Target: The extent to which the change target is the entire
organization versus a department or small group. Wider organizational targets can
facilitate or hinder persistence due to political resistance or support.
4. Internal Support: The presence of an internal support system, often provided

by internal consultants, to guide the change process and gain commitment.
5. Sponsorship: The presence of a powerful sponsor who can initiate, allocate, and
legitimize resources for the intervention. Effective sponsorship is critical for the
longevity of the intervention.
Institutionalization Processes
The institutionalization framework identifies five key processes that can directly
affect the degree to which OD (Organization Development) interventions are
institutionalized:
1. Socialization
- Description: Involves transmitting information about beliefs, preferences,

norms, and values related to the intervention.
- Process: Continual learning and experimentation are necessary to keep the

change program persistent. Organization members must focus on the evolving
nature of the intervention and communicate this to others, especially new
employees.
- Example: Employee involvement programs often include initial transmission

of information, retraining of existing participants, and training of new members to
ensure the persistence of the program.
2. Commitment
- Description: Binds people to behaviors associated with the intervention.
- Process: Includes initial commitment and recommitment over time.

Opportunities for commitment should allow people to freely, explicitly, and
publicly select the necessary behaviors, promoting high commitment and stability.
- Example: In employee involvement programs, gaining workers' commitment is

crucial, but attention should also be directed at middle managers to avoid
management resistance.
3. Reward Allocation
- Description: Involves linking rewards to the new behaviors required by an

intervention.
- Process: Combines intrinsic rewards (internal satisfaction from challenge,

development, and accomplishment) with extrinsic rewards (such as money) to
reinforce new behaviors. Rewards should be perceived as equitable to ensure long-
term persistence of behaviors.
- Example: Employee involvement programs often fail when increased

contributions are not fairly rewarded. Both intrinsic and extrinsic rewards should
be provided for higher levels of contribution.
4. Diffusion
- Description: Refers to transferring interventions from one system to another.

- Process: Facilitates institutionalization by providing a wider organizational

base to support new behaviors. It reduces counter-implementation forces by
providing normative consensus from other parts of the organization.
- Example: Interventions that are diffused to other organizational units are more
likely to persist as they gain wider support and reduce pressure to revert to old
behaviors.
5. Sensing and Calibration
- Description: Involves detecting deviations from desired intervention behaviors

and taking corrective actions.
- Process: Organizations must have sensing mechanisms to detect variations in

performance, preferences, norms, and values. Corrective actions can then be
initiated to ensure behaviors align with the intervention.
- Example: If job discretion from a job enrichment intervention does not persist,
feedback mechanisms can trigger corrective actions, such as renewed socialization
or commitment efforts.
Indicators of Institutionalization
Institutionalization is not absolute; it reflects degrees of persistence of an

intervention. Five indicators can assess the extent of an intervention’s persistence:
1. Knowledge
- Description: The extent to which organization members understand the

behaviors associated with an intervention.

- Example: Knowledge about performing a variety of tasks and making

decisions in a job enrichment program.
2. Performance
- Description: The degree to which intervention behaviors are actually

performed.
- Example: Measuring the proportion of employees performing job enrichment

behaviors and the frequency of such behaviors.
3. Preferences
- Description: The degree to which organization members privately accept the

organizational changes.
- Example: Positive attitudes towards job enrichment behaviors such as making

decisions and performing a variety of tasks.
4. Normative Consensus
- Description: The extent to which people agree about the appropriateness of the
organizational changes.
- Example: Employees supporting job enrichment and seeing it as appropriate

for organizational functioning.
5. Value Consensus
- Description: Social consensus on values relevant to the organizational changes.

- Example: Shared values of self-control and responsibility promoting job

enrichment behaviors.
Developmental Order of Institutionalization
The five indicators follow a specific developmental order: knowledge,

performance, preferences, norms, and values. Understanding new behaviors
precedes performing them effectively, which generates rewards and affects
preferences. Preferences lead to normative consensus about the appropriateness of
the changes, which, over time, result in value consensus.
An OD intervention is fully institutionalized only when all five indicators are

present. For example, if there is normative agreement about job enrichment
behaviors, it implies that employees have knowledge about these behaviors, can
perform them effectively, prefer them, and support them normatively and value-
wise.

Lesson 28
Interpersonal and Group Process Approaches
Process interventions in Organizational Development (OD) are skills used by

managers or OD professionals to help work groups become more effective. The
goal is to make the group aware of how it operates and how members interact. This
awareness helps them improve their problem-solving abilities. Instead of giving
solutions, managers using process interventions observe and guide groups by
asking questions, focusing on teamwork, teaching when needed, and listening. This
approach encourages teams to solve problems independently, which is a major
advantage.
Change Programs in Interpersonal Relations and Group Dynamics
These programs aim to improve how people work together. They involve various
interventions:
1. T-group (Sensitivity Training): Originally a key OD method, it's less common

now but still used for personal and group development. It helps participants
understand group dynamics and interpersonal behavior by interacting in a
structured setting.

Goals include:
- Increasing self-awareness about how one's behavior affects others.
- Enhancing sensitivity to others' behavior and nonverbal cues.
- Understanding group processes that help or hinder functioning.
- Improving diagnostic skills in interpersonal situations.
- Applying learning to real-life situations for better outcomes.
- Developing better interpersonal relationships.
2. Process Consultation (PC): This involves helping managers, employees, and

groups assess and improve processes like communication and decision-making. PC
focuses on developing relationships where clients can understand and act on their
own process events to improve situations. Unlike offering direct solutions, PC
helps clients diagnose their issues and become more effective in problem-solving.
Key areas of focus:
- Communication
- Roles within groups
- Problem-solving and decision-making processes
- Development of group norms
- Use of leadership and authority

Process consultation is broader than team building because it focuses on

helping relationships within organizations, while team building is more task-
oriented.
Communication in Organizational Development
Overt Communication:
- Overt communication involves observable aspects like who talks to whom, how
frequently, and for how long during meetings.
- Process consultants use techniques like time logs to track speaking patterns and
interruptions without passing judgment.
- Nonverbal cues such as body language provide valuable insights into group
dynamics and engagement levels.
Covert Communication:
- Covert communication refers to hidden messages or double meanings that may

contradict explicit statements.
- The Johari Window, as described by Luft, categorizes these hidden messages into
different quadrants:
- Open Area (Cell 1): Known to both the individual and others.
- Hidden Area (Cell 2): Known to the individual but hidden from others.
- Blind Area (Cell 3): Known to others but unknown to the individual.
- Unknown Area (Cell 4): Unknown to both the individual and others.

Improving Communication:
- Process consultants aim to increase the size of the open area (Cell 1) by
encouraging openness and trust through disclosure.
- They also facilitate feedback (horizontal movement) to reduce the blind area
(Cell 3) by providing insights into behaviors unknown to the individual.
Impact on Organizational Effectiveness:
- Effective communication is crucial for organizational success, as poor

communication often hinders effectiveness.
- Understanding both overt and covert communication helps organizations foster

better relationships and enhance productivity.
Lesson 29
Functional Roles of Group Members:
- The process consultant must understand the roles individuals play in groups,
balancing personal needs with group goals.
- Emotions are important but often overlooked; neglecting emotional needs can
hinder group productivity.
- Effective groups balance task-related activities (information exchange,

coordination) with group maintenance actions (encouragement, harmonizing).

Group Problem Solving and Decision Making:
- Identifying real problems versus symptoms is crucial for effective problem-

solving.
- Prematurely rejecting ideas can hinder group progress; consultants help by

analyzing group dynamics and decision-making processes.
- Decision-making methods vary (e.g., authority, consensus); consultants assist in

choosing the appropriate method for each situation.
Group Norms and Growth:
- Groups develop norms over time that guide behavior; consultants help groups
identify and evaluate these norms for effectiveness.
- Understanding and adjusting dysfunctional norms can enhance group

development and effectiveness.
Leadership and Authority:
- Process consultants help leaders understand their own behaviors and their impact
on group dynamics.
- Adaptability in leadership style based on situational needs is crucial for effective

leadership.
Basic Process Interventions:
- Individual Interventions: Aimed at increasing self-awareness and reducing

blind spots (Johari Window).
- Group Interventions: Focus on improving group processes (relationships,

problem-solving, decision-making) through structured interventions (process,
content, structural).
Application and Effectiveness of Process Consultation:
- Process consultation helps groups diagnose and resolve their own issues,
promoting ownership and learning within the group.
- Research on its effectiveness is mixed; while it shows positive impacts on group

dynamics and self-reported effectiveness, concrete performance improvements are
harder to measure.
Lesson 30
Third-Party Interventions
Conflict Nature and Sources:
- Conflict in organizations arises from various sources like personality differences,

task orientations, perceptions, and competition for resources.
- Conflict is neither inherently good nor bad; it can motivate innovation but also
disrupt productive interactions among group members.
Types of Conflict and Interventions:

- Substantive Issues: Conflict over work methods, pay rates, etc., often resolved
through formal processes like arbitration or mediation, not typically part of OD
practice.
- Interpersonal Issues: OD interventions focus on facilitating direct interaction

between parties to diagnose and resolve conflicts.
Episodic Model of Conflict:
- Conflict often follows cyclical stages or "episodes," triggered by latent issues

surfacing due to specific incidents.
- Strategies for conflict resolution include preventing ignition, setting limits,

coping with consequences, and addressing underlying issues.
Facilitating Conflict Resolution:
- Factors facilitating productive dialogue include mutual motivation, power

equality, coordinated confrontation, clear communication, and manageable tension.
- Tactical choices involve data gathering, context considerations (neutrality,

timing, participants), and role definition for the third-party consultant.
Consultant Skills and Approaches:
- Consultants must excel in diagnosis, intervention, and follow-up, being sensitive

to emotions and maintaining neutrality.
- Effective intervention requires skill in various strategies and tactics tailored to the
specific conflict context and parties involved.

Third-party interventions in conflict resolution aim to facilitate constructive

dialogue, manage conflict effectively, and address underlying issues to restore
productive relationships within organizations.
Lesson 31
Team Definition and Importance:
- A team consists of individuals with complementary skills, dependent on each

other to achieve common goals and accountable collectively.
- Effective teams exhibit openness, honesty, support, trust, cooperation,

collaboration, consensus-based decision-making, clear communication, and
commitment to shared goals.
Types of Team Interdependence:
- Pooled Interdependence: Found in cricket, where team members' contributions

are somewhat independent.
- Sequential Interdependence: Seen in football, requiring sequential actions to

score, with grouped functional roles.
- Reciprocal Interdependence: Typical in basketball, where all players are

involved in offense, defense, and scoring.
OD Techniques in Practice - Team Building:

- Definition: Team building or team development is an OD intervention focusing

on improving communication, cooperation, and cohesion within work groups.
- Example - Starbucks: Howard Schultz emphasizes teamwork at Starbucks,

linking success to collaborative efforts and employee satisfaction through benefits
like stock options and training.
Importance and Applications of Team Building:
- Purpose: Enhance group effectiveness by addressing issues such as unclear

objectives, interpersonal conflicts, communication barriers, decision-making
difficulties, and power dynamics.
- Types of Teams: Natural work teams (based on job roles) and temporary task
teams (project-specific).
Effective Team Building Approach:
- Components: Involves planned activities to enhance task accomplishment and

interpersonal skills, guided by a structured process.
- Manager's Role: Critical in fostering team development by supporting and

facilitating team-building activities.
Team-Building Activities:
Definition of a Team:
- A team is a group of interdependent individuals with shared goals, work methods,

and mutual accountability. Types of teams include those reporting to the same

supervisor, groups with common organizational goals, temporary task teams,

interdependent work role teams, and purpose-driven teams.
Factors Affecting Team-Building Outcomes:
- Several factors influence the effectiveness of team-building activities, including

the duration of the activity, the team's willingness to introspect, its longevity, and
its permanence. Outcomes range from minor operational adjustments (e.g.,
increased meeting frequency) to profound behavioral changes (e.g., improved trust
and management style).
Classifications of Team-Building Activities:
1. Individual-Relevant Activities:
- Focus on fulfilling individual needs like achievement, inclusion, influence, and

belonging within the team structure and processes.
- Examples include clarifying decision-making processes to enhance member

involvement and addressing power dynamics to ensure equitable participation.
2. Group-Oriented Activities:
- Concentrate on optimizing task performance and group dynamics.
- Activities typically start with defining team goals and enhancing operational
efficiency through streamlined processes and improved communication.
- Teams also evaluate time management, workload distribution, and problem-

solving strategies to enhance overall effectiveness.

3. Organizational Relationship Activities:
- Address the team's integration into the larger organizational context.
- Teams identify their roles within the organization, foster collaboration with
other departments or teams, and may establish cross-functional teams to tackle
complex challenges.
- It's crucial for teams to avoid becoming too isolated, as it can lead to intergroup
conflicts and negative organizational impacts.
Process of Team Building:
- Effective team building involves more than managerial oversight; it requires

aligning diverse talents towards shared objectives.
- Teams serve as essential units for integrating specialized knowledge and skills
needed to tackle modern complexities.
- Team development interventions are pivotal in organizational development (OD),

fostering cohesion and enhancing productivity.
Team building activities are pivotal in enhancing team cohesion, productivity, and
alignment with organizational goals. They involve addressing individual needs,
refining group processes, and integrating teams within the broader organizational
framework. Effective team building is essential for achieving sustainable
organizational success and managing complex challenges in modern workplaces.
Lesson 32
1. Family Group Diagnostic Meetings
- Objective: Identify group problems.
- Process: Gather information through questionnaires, interviews, and mini-group

meetings.
2. Family Group Team-Building Meetings
- Objective: Improve team functioning.
- Process: Follow a structured format involving several key steps:
Steps in Team Development Training Meetings:
Step 1: Initiating the Team Building Meeting
- Initiator: Often a manager outside the team.
- Decision: Usually collaborative, involving discussion on the necessity of team

building.
Step 2: Setting Objectives
- Objective Agreement: Essential before proceeding.
- Questions Addressed: Purpose, participant and consultant intentions, fit into OD

program, priority, commitment levels, and evaluation metrics.

Step 3: Collecting Data
- Pre-Meeting Information: Includes diagnostic phase data.
- Methods: Questionnaires, interviews, and group meetings.
Step 4: Planning the Meeting
- Key Participants: Practitioner, manager, and select team members.
- Goals Restatement: Precise goals integration from earlier steps.
- Logistics: Meeting arrangements and resource planning.
Step 5: Conducting the Meeting
- Duration: Typically two to three days off-site.
- Objectives Review: Group shares expectations and norms are established.
- Activities: Data presentation, agenda setting, self-critique, interpersonal issue

resolution, and task-focused discussions.
- Output: Action plan creation with responsibilities and timelines.
Step 6: Evaluating the Team Building Process
- Assessment: Review of implemented actions’ effectiveness.
- Adjustment: Modify ineffective actions, enhance successful ones, and plan for
continuous improvement.
The Manager’s Role in Team Building

- Responsibility: Ultimately lies with the manager for group effectiveness.
- Tasks: Diagnose group issues, facilitate improvement actions, and ensure

ongoing effectiveness.
- Consultant Use: Initially advisable for skill development and problem

resolution.
- Transition: Manager should progressively take over team-development roles

from the consultant.
The assessment for determining whether to use an outside consultant for team
building involves several key questions. (Table 11 Page 177)
1. Comfort with Trying Something New: If the manager is comfortable trying

new approaches with the team, it suggests openness to change and innovation,
which are beneficial for initiating team building.
2. Experience with Off-Site Work: Teams accustomed to working outside their

usual environment may find off-site team building more effective, as it facilitates
focus and reduces distractions.
3. Will Group Members Provide Honest Data?: Honest and open

communication among group members is crucial for effective team building, as it
ensures that issues are identified and addressed truthfully.
4. Level of Conflict or Apathy: Lower levels of conflict and apathy indicate a

healthier team environment, potentially reducing the need for extensive outside
intervention.

5. Boss as a Source of Difficulty: If the manager (boss) is not a major source of

difficulty, it simplifies the team building process, as there's less internal resistance
or conflicting agendas.
6. Commitment to Effective Team Functioning: High commitment from both

the boss and team members signals readiness to invest in improving team
dynamics and productivity.
7. Manager's Style and Philosophy: Alignment of the manager's leadership style

and philosophy with a team-oriented approach is essential for successful
implementation of team building initiatives.
8. Knowledge about Team Building: Adequate knowledge about team building

enables the manager to initiate and sustain improvement efforts independently.
9. Staff Confidence in Starting Team Building: If staff members are confident in

starting team building efforts without external help, it indicates readiness and self-
sufficiency.
Scoring and Decision Making:
- Scoring Guidance:
- 6 or more "Yes" responses suggest that an outside consultant may not be

necessary.
- 4 or more "No" responses indicate a potential need for a consultant.
- Mixed responses suggest the need for further discussion with a consultant to
assess the situation collaboratively.
Applicability of Team Building:
Team building is beneficial in various scenarios, such as forming new teams,

resolving conflicts, and revitalizing stagnant teams. Key conditions identified for
effective team building include inadequate communication patterns, the necessity
for integrated teams, task interdependencies, leadership behavior change, cost-
effectiveness, and alignment with leadership styles.
Team Management Styles:
Two predominant styles include transactional (task-oriented) and

transformational (people-oriented), each influencing team dynamics differently.
Results and Considerations:
Research on team building highlights challenges, including its focus on short-term

emotional impacts versus sustained organizational performance improvements.
Integration with other interventions and ongoing leadership commitment are
crucial for long-term success.

Effective team building requires thoughtful assessment, alignment with

organizational goals, and continuous evaluation to ensure lasting impact on team
performance and organizational effectiveness.
Lesson 33
Organization Process Approaches
1. Organization Confrontation Meeting
- Purpose: Mobilize organizational resources to identify and prioritize problems.
- Application:
- Useful during organizational stress or leadership transitions.
- Adapted versions like General Electric’s "Work-Out" program.
- Process:
1. Schedule a comprehensive group meeting involving all stakeholders.
2. Form groups representing various departments.
3. Emphasize openness and honesty in identifying organizational issues.
4. Groups identify problems with facilitation from OD practitioners.
5. Reconvene to share identified problems and potential solutions.
6. Categorize problems to eliminate redundancy and prioritize.
7. Form problem-solving groups or cross-functional task forces.
8. Develop action plans and set timelines for each problem.

9. Periodic reporting and follow-up meetings to track progress.
10. Modify plans as necessary based on ongoing evaluations.
2. Inter-group Relations
- Includes:
- Inter-group Conflict Resolution Meeting: Focuses on resolving conflicts

between organizational units.
- Microcosm Groups: Address broader organizational processes like

coordination and diversity.
3. Large-Group Interventions
- Purpose: Engages entire systems in interactive processes.
- Applications:
- Define organizational values.
- Develop new perspectives and visions.
- Solve cross-functional issues.
- Restructure operations and strategies.
4. Blake and Mouton’s Grid Organization Development
- Approach: Prescribes management strategies universally.
- Critique: Questioned for its adaptability and effectiveness in contemporary

organizations.

These approaches aim to enhance organizational problem-solving, leadership,

and task accomplishment across various levels of the organization.
Microcosm Groups:
- Definition: Small groups of individuals who represent a larger organization or

community.
- Purpose: Address specific issues such as diversity, communication problems,

cultural integration, and organizational change.
- Function: Use "parallel processes" where group interactions unconsciously

influence individual behaviors and group dynamics.
- Example: A team role-playing a department meeting accurately predicted the

actual behavior observed later.
- Application Stages:
1. Identify an Issue: Recognize a problem affecting the organization.
2. Convene the Group: Form a diverse group reflective of stakeholders related to

the issue.
3. Provide Group Training: Train members in problem-solving, decision-

making, and team-building.
4. Address the Issue: Solve the problem and implement solutions with support
from the wider organization.
5. Dissolve the Group: Disband after successful implementation, documenting

outcomes.
Large Group Interventions:

- Definition: Involves bringing together a large number (100+) of organization

members for intensive meetings.
- Purpose: Tackle significant organizational issues like strategy development,

responding to change, or innovation.
- Features: Structured meetings over 2-4 days where participants collaborate to

solve problems or plan future directions.
- Variety: Can vary in size, structure, length, and level of formality depending on
the specific goals and context.
Preparing for the Large-Group Meeting:
- Design Team: A team of OD practitioners and organization members organizes

the event.
- Key Ingredients for Success:
1. Compelling Meeting Theme: Clear focus on significant organizational

changes like mergers, responding to external challenges, or major restructuring.
2. Appropriate Participants: Invite stakeholders representing diverse

perspectives and who are enthusiastic about initiating change.
3. Relevant Tasks: Define tasks that address the meeting theme, assigned to
subgroups for examination and action planning.
Conducting the Meeting:
- Flow of Events: Varied based on the chosen framework (open-systems or open-

space methods).
- Open-Systems Methods:

1. Map Current Environment: Identify and prioritize external groups

interacting with the organization.
2. Assess Organization's Responses: Evaluate how the organization currently

meets external expectations.
3. Identify Core Mission: Discover the organization’s mission through its

responses to external demands.
4. Create Future Scenarios:
- Realistic Future: Project outcomes if the organization continues current

practices.
- Ideal Future: Envision desirable futures without constraints.
5. Action Planning: Develop specific actions to bridge the gap between present
and ideal futures.
6. Follow-Up: Establish timelines and accountability for implementing changes.
- Open-Space Methods:
1. Setting Conditions: Announce the conference theme and establish norms

encouraging participant-driven discussions.
- Law of Two Feet: Encourages participants to move between discussions

where they are engaged.
- Four Principles: Emphasize responsibility, flexibility, creativity, and respect

for natural group energy.
2. Creating the Agenda: Participants propose and organize discussion topics

they are passionate about.
3. Coordinating Activities: Hold community meetings to share insights and

summarize discussions, fostering collaboration and learning.
Following up Meeting Outcomes:
- Importance of Follow-up: Essential for implementing action plans and gaining

organizational commitment.
- Communication: Share meeting results widely within the organization to ensure

understanding and support.
- Commitment: Secure broader commitment to change among all stakeholders

involved in the large-group meeting.
- Structuring Change: Establish a clear process for implementing changes

outlined in action plans.
- Immediate Implementation: If all organization members participated,

implement changes according to agreed timelines.
Grid Organization Development (Grid OD): A Normative Approach:
- Overview: Systematic approach to achieving corporate excellence through

cultural change.
- Managerial Grid: Evaluates managerial styles based on concern for production

and concern for people.
- Concern for Production: Focus on tasks, efficiency, and organizational goals.
- Concern for People: Emphasis on personal welfare, relationships, and

involvement.
- Objectives of Grid OD: Enhance planning and managerial skills to foster

organizational excellence.
- Six Phases of Grid OD:
1. Phase 1: The Grid Seminar

- Participants assess their managerial styles using the Managerial Grid.
- Focus on team problem-solving and conflict management.
2. Phase 2: Teamwork Development
- Top managers and their direct reports develop teamwork skills.
- Establish group and individual goals.
3. Phase 3: Inter-group Development
- Address inter-group conflicts and stereotypes.
- Compare perceptions of working relationships and improve productivity.
4. Phase 4: Developing an Ideal Strategic Organization Model
- Define financial objectives, organizational activities, markets, structure,

decision-making policies, and growth strategies.
5. Phase 5: Implementing the Ideal Strategic Model
- Assign planning teams to organizational segments.
- Establish corporate headquarters team and coordinator for oversight.
6. Phase 6: Systematic Critique
- Evaluate organizational excellence post-implementation using surveys.
- Monitor change and readiness for continuous improvement.
Lesson 34
Restructuring Organizations

Techno-Structural Interventions:
- Need for Restructuring: Global competition and rapid technological changes

demand flexible, adaptive organizational structures.
- Objectives: Transform from rigid bureaucracies to leaner, efficient structures

with streamlined workflows.
- Structural Design Interventions:
- Traditional vs. Modern Structures: Shift from functional, self-contained, and

matrix structures to process-based and network-based forms.
- Diagnostic Guidelines: Assess environment, organization size, technology,

strategy, and global operations to determine suitable structures.
- Downsizing:
- Purpose: Reduce costs and bureaucracy by minimizing organizational size.
- Methods: Layoffs, redesign, and outsourcing non-core functions.
- Alignment: Downsizing strategies should align closely with organizational

strategy for effectiveness.
- Reengineering:
- Core Process Redesign: Radically redesign core processes for improved task
coordination and responsiveness.
- Enablers: Utilize new information technologies for enhanced control and

coordination of work processes.
Structural Design:
- Definition: Describes how organizational work is divided into subunits and

coordinated.
- Contingency Perspective: Structures must align with environment, size,

technology, strategy, and global operations for effectiveness.
- Traditional Structures:
- Functional Organization:
- Description: Divided into functional units (e.g., engineering, finance) based

on task specialization.
- Advantages: Promotes skill specialization, reduces duplication, facilitates

career development.
- Disadvantages: Encourages parochial perspectives, hinders inter-departmental

communication and cooperation.
- Contingencies: Best suited for stable environments, medium-sized firms,

routine technologies emphasizing efficiency.
- Self-Contained-Unit Organization:
- Description: Groups activities by products, services, or regions under a unit

manager.
- Advantages: Recognizes interdependencies, promotes outcome orientation

and accountability.
- Disadvantages: May underutilize skills, promote departmental rather than

organizational goals.
- Contingencies: Effective in uncertain environments, large organizations with

technological interdependencies.
- Matrix Organization:
- Description: Overlaps functional and product/project structures, balancing

dual chains of command.

- Origin: Developed in aerospace industry for flexibility in responding to

changing demands.
- Roles: Includes top managers, matrix bosses, and two-boss managers to

manage dual reporting relationships.
- Application: Widely used in various sectors to enhance flexibility and

adaptability.
Matrix Organization
Matrix organizations offer distinct advantages and face notable challenges, as

detailed in Table 14. On the positive side, they facilitate:
- Specialized Knowledge: Utilizing functional expertise across projects.
- Flexibility: Swift adaptation to new projects by reallocating personnel as needed.
- Consistency: Ensuring communication and coherence between departments and

projects.
Conversely, managing matrix structures can be demanding:
- Complexity: Requires substantial managerial support and cost.
- Role Ambiguity: Overlapping roles may cause confusion and conflict.
- Performance Issues: Potential clashes between functional and project priorities

can hinder overall effectiveness.
Successful implementation of matrix organizations hinges on several critical

conditions:

- Dual Focus: Effective when balancing diverse customer demands and technical
intricacies.
- Information Processing: Suitable for environments requiring extensive

information handling and decision-making complexity.
- Resource Sharing: Facilitates efficient resource allocation amid varying

demands.
However, if these conditions are not met, matrix structures may struggle or
fail to deliver expected benefits.
Process-Based Structures
Introduction to Process-Based Structures:
Process-based structures represent a paradigm shift in organizational design,

focusing on multidisciplinary teams aligned around core processes such as product
development and customer support (Figure 45).
- Organizational Focus: Oriented towards horizontal relationships over traditional

vertical hierarchies.
- Leadership: Typically led by a process owner with minimal hierarchical layers

at the executive level.
Advantages of Process-Based Structures:
- Customer Focus: Sharpened focus on meeting customer needs, enhancing speed,

efficiency, and satisfaction.

- Efficiency: Streamlined workflows reduce management layers, facilitating

quicker and more accurate information flow.
- Flexibility: Agile response to environmental changes compared to traditional

structures.
- Integration: Breaks down departmental silos, enhancing organizational visibility

and performance accountability.
Disadvantages and Challenges:
- Transition Challenges: Requires significant mindset shifts and skill

enhancements, potentially resisted by existing functional managers.
- Resource Allocation: Risk of duplicating scarce resources if not managed

effectively.
- Decision Making: Slower decision-making processes in team settings compared

to hierarchical structures.
- Risk Management: Identifying and prioritizing critical processes crucial for

customer satisfaction is essential; oversight can lead to performance issues.
Suitability and Contingencies:
Process-based structures are particularly effective in:
- Uncertain Environments: Adapting to rapid market changes and customer

demands.
- Complex Technologies: Managing intricate interdependencies in non-routine

tasks.
- Customer-Centric Goals: Prioritizing customer satisfaction across diverse

products or projects.
Lesson 35
Restructuring Organizations
Network-Based Structure
Introduction:
A network-based structure manages complex relationships among multiple

organizations or units, each specializing in specific tasks or business junctions.
Recent typologies classify networks into four basic types:
1. Internal Market Network: Within a single organization, subunits operate as

independent profit centers, trading services and resources internally and externally.
ABB is an example, with 4,500 profit centers across 1,200 companies worldwide.
2. Vertical Market Network: Multiple organizations collaborate under a focal

entity to manage resources from raw materials to end consumers. Nike coordinates
manufacturing across different plants and distribution through retail outlets.

3. Inter-Market Network: Alliances among various organizations in different

markets, exemplified by Japanese keiretsu and Korean chaebol.
4. Opportunity Network: Temporary alliances of organizations pursuing specific

goals, disbanding once objectives are met.
Characteristics and Benefits:
- Flexibility: Adaptability to changing environments through diverse partnerships,

enabling global operations.
- Competency Leverage: Each member leverages their specialized strengths for

synergistic outcomes.
- Resource Utilization: Collective resources and expertise address complex tasks

beyond the capacity of individual organizations.
- Synergy: Collaboration generates synergistic effects, enhancing overall

performance.
Challenges:
- Management Complexity: Managing lateral relationships across autonomous

entities without hierarchical control.
- Autonomy Issues: Difficulty in persuading organizations to relinquish autonomy

and sustain commitment.
- Risk Exposure: Sharing proprietary knowledge and skills among network

members.
- Sustainability: Challenges in maintaining benefits and cohesion, especially if not

composed of top-tier organizations.
Suitability and Contingencies:
Network structures excel in:
- Complex and Uncertain Environments: Effective in dynamic settings requiring

diverse competencies and flexible responses.
- Organizations of All Sizes: From small to large, adaptable to varying

organizational needs.
- Innovation and Specialization Goals: Aligns with organizational objectives

focusing on innovation and specialized capabilities.
Examples: Apple, Benetton, Sun Microsystems, and Merck have successfully

adopted network structures, leveraging partnerships for strategic advantage.
While network-based structures offer substantial benefits in leveraging

competencies and flexibility, effective implementation requires adept management
of complex relationships and sustained commitment from participating
organizations.
Definition and Methods of Downsizing:
- Downsizing involves reducing the size of an organization through various

methods: layoffs, attrition, early retirement, divestiture, outsourcing,
reorganization, or delayering.
- It's not just about reducing workforce but can also involve restructuring
organizational units and management levels.

Reasons for Downsizing:
- Often occurs due to mergers, declines in revenues or market share, technological

changes, or organizational restructuring.
- Social pressures also play a role, with a belief that leaner organizations are more
efficient.
Consequences of Downsizing:
- Rise of contingent workforce (temporary or part-time workers) to replace

permanent employees.
- Potential loss of key competencies and employee morale.
- Needs careful management to avoid negative impacts on organizational culture

and growth.
Stages of Downsizing:
1. Clarify Organization's Strategy:
- Leaders communicate how downsizing aligns with strategic objectives.
- Provide support and opportunities for members to voice concerns.
2. Assess Downsizing Options:
- Identify options such as workforce reduction, organization redesign, and

systemic change.
- Choose methods based on long-term strategic goals rather than immediate cost-
cutting.

3. Implement Changes:
- Top-down management approach to maintain perspective.
- Address inefficiencies and high costs systematically.
- Link actions to the organization's strategic direction.
- Maintain frequent and clear communication throughout the process.
4. Support Survivors and Departed Employees:
- Address concerns of remaining employees ("survivor syndrome").
- Provide training and development for new roles.
- Support departed employees with outplacement counseling, severance

packages, etc.
5. Follow Through with Growth Plans:
- Ensure transparency about the organization's renewal and growth strategy.
- Clarify new roles and expectations for employees post-downsizing.
Downsizing should be approached strategically to minimize negative impacts and

support future growth. Effective communication and support for both remaining
and departing employees are crucial.
Results of Downsizing:

- Empirical Research Findings: Generally negative outcomes reported from

downsizing efforts.
- Productivity and Cost Targets: Many firms did not achieve cost reduction or
productivity gains as expected.
- Rehiring and Financial Performance: About 80% of firms needed to rehire

some of the employees laid off; financial performance improvements were often
temporary.
- Employee Consequences: Downsizing led to increased stress, health issues, loss

of self-esteem, reduced trust and loyalty, and disruptions in personal life.
Interpretation of Research Findings:
- Bias in Studies: Studies may be biased as they often rely on responses from
human resources specialists who typically view downsizing negatively.
- Sample Bias: Firms studied might have been poorly managed to begin with,
making downsizing less effective in improving financial performance.
- Implementation Issues: Success of downsizing may depend on how effectively

the process is implemented rather than simply reducing workforce or layers.
Reengineering:
- Definition: Reengineering involves radical redesign of business processes to

achieve significant improvements in performance.
- Purpose: Streamlines work processes, making them faster, more flexible, and
responsive to changes in competitive conditions, customer demands, etc.
- Technological Integration: Often utilizes modern information technologies to

support integrated business processes.

- Challenges: Implementation failures often attributed to existing information

systems that are not suited for reengineered processes.
Integration with Downsizing and Work Design:
- Relationship: Reengineering can complement downsizing by fundamentally

changing how work is performed rather than just reducing headcount.
- Work Design Impact: Shifts from traditional functional structures to process-

based structures, emphasizing multifunctional tasks, employee empowerment, and
results-oriented feedback.
- Potential Pitfalls: Reengineering sometimes overlooks individual differences in

motivation and reaction to enriched work and team structures.
Downsizing, while often pursued for cost reduction, frequently fails to deliver
sustained improvements in financial performance and can have negative
impacts on employees. Reengineering offers a strategic alternative by
fundamentally redesigning business processes to enhance performance and
responsiveness, though successful implementation requires overcoming
technological and organizational challenges.
Application Stages of Reengineering:
1. Prepare the Organization:
- Context Assessment: Understand the competitive environment, regulatory

changes, and strategic objectives that necessitate reengineering.

- Example: GTE Telephone Operations prepared for deregulation by anticipating

competitive challenges and high operational costs due to regulatory protections.
2. Specify Organization Strategy and Objectives:
- Business Strategy Alignment: Align reengineering efforts with business

strategy to focus on essential processes crucial for strategic success.
- Example: GTE set goals to double revenues, halve costs, and reduce product
development time significantly, communicating these objectives extensively across
the organization.
3. Fundamentally Rethink the Way Work Gets Done:
- Identify and Analyze Core Business Processes:
- Identify core processes crucial for delivering products/services and map out
activities involved.
- Example: GTE mapped its core processes of customer choosing, using, and
paying for services.
- Assess costs associated with each phase using process-based accounting to

avoid misleading conclusions.
- Define Performance Objectives:
- Set ambitious performance goals (speed, quality, cost) based on customer

requirements or industry benchmarks.
- Example: Andersen Windows improved order accuracy and customer

experience by redesigning their process to allow customers to design their own
windows online.
- Design New Processes:
- Redesign processes from scratch to achieve breakthrough goals, focusing on

customer needs, simplicity, and efficiency.
- Guidelines include integrating technical and social aspects, not being

constrained by past practices, and ensuring activities flow naturally.
- Example: Andersen Windows used interactive catalogs and direct factory

specifications to streamline their ordering and manufacturing processes.
These steps outline a structured approach to reengineering, emphasizing the

importance of strategic alignment, thorough process analysis, and innovative
redesign to achieve significant improvements in organizational performance. Each
step involves careful planning, goal setting, and integration of technological
advancements to support streamlined and efficient business operations.
In successful reengineering efforts, implementing "early wins" or "quick hits" is

crucial. This involves identifying and addressing immediate redundancies and
inefficiencies in existing processes to demonstrate tangible improvements quickly.
These early successes are essential for building momentum and gaining support for
further changes.The final step in reengineering is restructuring the
organization around the new business processes. This includes:
1. Organizational Restructuring: Aligning the organizational structure to support

the redesigned processes. This often leads to the creation of process-based
structures where teams are organized around specific workflows rather than
traditional departmental boundaries.

2. Implementing New Information and Measurement Systems: Introducing

new systems that focus on measuring outcomes such as productivity, customer
satisfaction, and cost savings, rather than just tracking behaviors like absenteeism
or grievances. This shift ensures that the organization's metrics align with its
strategic goals and reengineered processes.
3. Utilizing Information Technology: Leveraging IT solutions to integrate and

coordinate business processes more effectively. Information technology plays a
critical role in reengineering by facilitating seamless communication, automation
of tasks, and real-time data access, which are essential for sustaining improvements
and adapting to changing business needs.
By implementing these steps, organizations can achieve significant improvements

in efficiency, effectiveness, and competitiveness through reengineering.
Lesson 36
"Employee Involvement"
Employee Involvement (EI)
- Definition: EI refers to practices aimed at increasing employee input into

decisions affecting organizational performance and employee well-being.
- Elements of Employee Involvement:
1. Power: Granting authority to employees to make decisions about work-related

issues.
2. Information: Ensuring timely access to relevant information necessary for

effective decision-making.
3. Knowledge and Skills: Providing training and development opportunities to

enhance employees' abilities to make informed decisions.
4. Rewards: Linking rewards (internal and external) directly to performance

outcomes resulting from participation in decision-making.
- Impact on Productivity: EI interventions are believed to enhance productivity

through:
1. Improved Communication and Coordination: Facilitates better integration

across different organizational functions and enhances task completion.
2. Enhanced Motivation: When EI satisfies individual needs and motivations, it

can lead to improved performance.
3. Skill Utilization: Employees' skills and knowledge are effectively utilized

when decision-making authority is aligned with information access and training.
- Applications of Employee Involvement:
- Parallel Structures: Includes quality circles and union-management

cooperative projects.
- High-Involvement Organizations: Provides extensive opportunities for

employee participation in decision-making.
- Total Quality Management (TQM): Integrates EI with quality improvement

initiatives.
- Michael Dell's Example: Dell Inc. implemented EI practices after recognizing

employee dissatisfaction. Michael Dell himself acknowledged shortcomings and
initiated changes to foster better relationships and retain talent.

Key Points
- EI involves empowering employees to make decisions, ensuring they have access

to relevant information, providing necessary skills through training, and linking
rewards to performance.
- It enhances productivity by improving communication, boosting motivation, and

effectively utilizing employees' skills.
It seems like you're looking for notes on the topic of Employee Involvement (EI)
practices and specifically the application of parallel structures like Work-Out
meetings at General Electric (GE).
Employee Involvement (EI) Practices:
1. Improving Employee Capabilities:
- EI practices aim to enhance employee skills and performance. For example,

involving employees in decision-making includes training in group problem-
solving and communication.
2. Enhancing Well-being and Satisfaction:
- EI contributes to a better work environment and job satisfaction. Increased

productivity also boosts satisfaction, especially when it leads to better rewards.
3. Attracting and Retaining Talent:

- Satisfied employees attracted by EI interventions can enhance productivity by

attracting skilled workers who want to stay with the organization.
4. Debate over EI Impact:
- While research supports the benefits of EI, there's ongoing debate about how
much it truly enhances productivity.
Parallel Structures (Work-Out Meetings at GE):
- Definition and Purpose: Parallel structures operate alongside formal

organizations to encourage innovation and problem-solving free from usual
organizational constraints.
- Example: Work-Out at GE:
- Initiation: Jack Welch and managers at GE introduced Work-Out to involve

employees in solving organizational issues.
- Process: Employees and managers met for five days to identify problems and
propose solutions, focusing on bureaucracy reduction and process improvement.
- Outcome: Over 100 action plans were drafted to implement changes, fostering
collaboration between departments and suppliers.
- Success and Evolution: Since its inception, Work-Out has evolved into a best
practice for fostering innovation and improving organizational processes at GE.

Application stages for parallel structures, focusing on cooperative union-

management projects like those seen in the GTE California example:
Application Stages for Parallel Structures (Cooperative Union-Management

Projects):
1. Define Purpose and Scope:
- Begin by clearly defining the purpose and scope of the parallel structure. This
involves identifying specific organizational issues to address, such as productivity
or service quality. Management needs to commit resources and demonstrate
openness to exploring organizational practices.
2. Form a Steering Committee:
- Establish a steering committee comprising leaders from various organizational

functions and constituencies. This committee refines the structure's purpose,
develops a vision, and guides its implementation. OD practitioners can assist in
fostering a culture of learning and innovation within this committee.
3. Communicate with Organization Members:
- Effective communication is crucial for member involvement. Clearly

communicate the purpose, procedures, and benefits of participation in the parallel
structure. Involve employees in developing the structure’s vision to increase
ownership and promote a collaborative work culture.
4. Form Employee Problem-Solving Groups:

- Create problem-solving groups to tackle specific organizational challenges.

Select members who represent relevant expertise and hierarchical levels. Provide
training to enhance group dynamics and problem-solving skills, fostering openness
and creativity.
5. Address Problems and Issues:
- Problem-solving groups use an action research process to diagnose issues, plan

solutions, implement changes, and evaluate outcomes. Effective communication
between these groups and the steering committee ensures alignment with
organizational goals and secures necessary resources.
6. Implement and Evaluate Changes:
- Implement approved organizational changes with support from the steering

committee and formal authority structures. Evaluate the impact of changes to
assess their effectiveness and adjust strategies as needed. Feedback on changes
helps the organization adapt and innovate.
Cooperative Union-Management Projects Example (GTE California):
- Context and Initiation: GTE California and the Communications Workers of

America initiated a cooperative union-management project in response to industry
deregulation and technological advancements.
- Purpose: The project aimed to improve quality of work life, productivity, and
customer orientation through increased worker participation and decentralized
decision-making.
- Structure: A steering committee and area coordinating committees were formed

to oversee the project across different geographic regions and functional areas.

- Implementation: Training sessions and orientation meetings were conducted to

align management and union officials on project goals and roles. Employee
involvement teams focused on solving quality-of-work-life issues initially, later
shifting towards productivity enhancements.
- Outcomes: The project resulted in significant cost savings, improved customer

satisfaction, and organizational efficiency. It survived multiple union negotiations
and corporate changes, demonstrating long-term effectiveness.
Lesson 37
Employee Involvement
Quality Circles at H.E.B Grocery Company:
1. Introduction and Context:

- H.E.B Grocery Company implemented a Quality Circles program in its

warehouse department as part of a broader initiative to increase employee
involvement. The program was initiated based on employee feedback indicating a
desire for greater participation in decision-making and problem-solving processes.
2. Program Structure:
- The program involved four Quality Circles, each comprising approximately ten
members who were selected voluntarily from the workforce. Circles met bi-weekly
for two-hour sessions during company time to identify and solve productivity
issues within their work area.
3. Leadership and Facilitation:
- Each circle was led by a supervisor from the respective work area who
facilitated meetings, set agendas, and guided problem-solving processes.
Facilitators from corporate Human Resources supported circle leaders by providing
training in communication, group dynamics, and problem-solving techniques.
4. Steering Committee and Evaluation:
- A steering committee, composed of department heads and senior managers,

oversaw the program. They coordinated training programs, addressed issues
beyond circle focus (like wages and benefits), and guided program expansion.
5. Evaluation Findings:
- Positive Outcomes: Initially, the program showed slight improvements in

productivity metrics such as production quantity, reduced costs, absenteeism, labor
expenses, overtime, and accidents compared to a control group.
- Mixed Reactions: While active participants reported satisfaction, non-

participants or dropouts felt the program did not address significant issues
effectively. Some supervisors felt the time spent on circles outweighed the
benefits.
- Challenges: Over time, attendance at circle meetings declined, enthusiasm

waned, and members became frustrated with bureaucratic delays in implementing
their ideas. There was also a perception of low management commitment to the
program.
Researchers concluded the program was a successful pilot in terms of fostering

initial enthusiasm and learning about the challenges of sustaining employee
involvement initiatives. It highlighted the need for systematic problem-solving
approaches and realistic expectations regarding outcomes.
High-Involvement Organizations (HIOs)
High-Involvement Organizations (HIOs) aim to foster extensive employee

participation across all facets of organizational life. Key features and design
elements that characterize HIOs:
1. Organization Structure
- Flat, Lean Structure: Minimizes hierarchical levels, pushing decision-making

closer to the operational level.
- Mini-Enterprise, Team-Based: Organized around teams focused on common

objectives, enhancing collective participation.
2. Job Design

- Individually Enriched: Jobs designed to offer high discretion, task variety,

and meaningful feedback.
- Self-Managing Teams: Encourages responsibility and cross-functional skills

through job rotation and autonomy.
3. Information System
- Open and Inclusive: Information accessible to all employees, facilitating

informed decision-making.
- Tied to Jobs: Information relevant to specific roles or teams, ensuring

relevance and applicability.
4. Career System
- Selection and Training: Emphasis on selecting individuals suited to HIO

environments via realistic job previews and peer-based training.
- Potential and Process-Skill Oriented: Development paths based on skill

acquisition and career growth.
5. Reward System
- Personnel Policies: Participatively set policies promoting stability and

commitment.
- Skill-Based Rewards: Link rewards to performance improvements and skill

development.
- Flexible Benefits: Offer choices in benefits, minimizing hierarchical

distinctions.

6. Physical Layout
- Supportive of Team Structures: Layout designed to encourage teamwork and

reduce status differentials.
- Safe and Pleasant: Ensures a conducive physical environment for employee

participation.
Total Quality Management (TQM)
Total Quality Management (TQM) integrates quality principles throughout the

organization, aiming for continuous improvement and customer satisfaction. Key
characteristics and principles of TQM:
1. Philosophy and Principles
- Customer Focus: Oriented towards meeting or exceeding customer

expectations.
- Continuous Improvement: Systematic process for ongoing enhancement of

quality.
- Employee Empowerment: Involves employees in decision-making and quality

improvement initiatives.
2. Implementation Principles
- Organization-Wide Application: Applies to all aspects of the organization,

not just production.
- Top Management Support: Leadership commitment crucial for successful

implementation.
- Training and Education: Continuous learning and skill development essential

for quality improvement.
3. Core Values
- Quality Built-In: Emphasis on prevention rather than inspection, ensuring

quality at every stage.
- Partnerships: Collaboration with suppliers and customers to enhance overall

quality.
4. Results-Oriented Approach
- Reduced Cycle Time: Focus on efficiency and speed in processes.
- Data-Driven Decision Making: Use of data for informed decision-making and

problem-solving.
5. Cultural Integration
- Ingrained Values: Quality as a core aspect of organizational culture.
- Stakeholder Focus: Consideration for all stakeholders, internal and external.
Similarities and Differences Between TQM and OD
- Similar Values:
- Both are system-wide approaches.
- Both emphasize planned change and continuous improvement.
- Both involve empowerment and participation of individuals.
- Differences:
- OD focuses on a broader array of organizational issues and causes, not just

quality.
- TQM is more specific to quality improvement and may have predefined

solutions.
- OD maintains a neutral stance, while TQM advocates for quality management

practices.
Both HIOs and TQM aim to enhance organizational effectiveness through

employee involvement and quality improvement, they differ in scope and primary
focus, with HIOs encompassing a broader set of organizational aspects beyond
quality alone.
Lesson 38
Work design

Work Design
Work design in organizations has evolved significantly, integrating with formal

structures and complementary changes in goal setting, reward systems, and work
environments to enhance performance. Three main approaches to work design
include
1. Engineering Approach
- Focus: Efficiency and simplification.
- Origin: Frederick Taylor’s scientific management.
- Methods: Tasks, methods, work flow specified for maximum output.
- Types:
- Traditional Jobs: Single-person tasks (e.g., bank tellers).
- Traditional Work Groups: Coordinated tasks (e.g., assembly lines).
- Criticisms: Ignores social and psychological needs; lacks worker discretion.
2. Motivational Approach
- Focus: Enhancing job satisfaction and performance.
- Theory: Herzberg’s two-factor theory (motivators vs hygiene factors).
- Attributes: Autonomy, responsibility, closure, performance feedback.
- Impact: Popular in companies like AT&T, TRW; influenced job enrichment.
3. Socio-Technical Systems Approach
- Focus: Optimizing social and technical aspects of work.

- Methodology: Integration of social and technical factors for efficiency.
- Goal: Enhance both productivity and worker satisfaction.
- Example: Application in modern workplaces for holistic work system design.
4. Core Dimensions of Jobs (Hackman and Oldham Model)
- Dimensions:
- Skill Variety: Range and complexity of tasks.
- Task Identity: Completion of whole, identifiable pieces of work.
- Task Significance: Impact of the job on others or the organization.
- Autonomy: Freedom and discretion in scheduling and procedures.
- Feedback: Clear, direct information about performance effectiveness.
- Psychological States: Experienced meaningfulness of work, responsibility for

outcomes, knowledge of results.
- Outcomes: High motivation, quality performance, job satisfaction, low

turnover.
Skill Variety, Task Identity, and Task Significance
1. Skill Variety
- Definition: Range and types of skills used in a task.

- Example: Lechmere's employees perform tasks like warehouse stock clerks,

cashiers, and salespeople.
- Job Enrichment: Job rotation increases skill variety by moving individuals

across different tasks.
- Importance: Higher skill variety increases job meaningfulness.
2. Task Identity
- Definition: Completeness of the task performed by an individual.
- Example: Assembling an entire airplane wheel versus only part of it.
- Job Enrichment: Job enlargement combines tasks into broader roles.
- Impact: Tasks with higher identity are perceived as more meaningful.
3. Task Significance
- Definition: Impact of the task on others or the organization.
- Example: Jobs like nursing or manufacturing critical parts.
- Importance: High task significance enhances job meaningfulness.
4. Autonomy
- Definition: Independence and discretion in task scheduling and execution.
- Example: Salespeople have autonomy in customer interactions; assembly-line

workers follow strict procedures.
- Effect: High autonomy increases responsibility for work outcomes.

5. Feedback from the Work Itself
- Definition: Information about job effectiveness directly from the task.
- Example: Assembling a part correctly or customer feedback on service.
- Significance: Direct feedback enhances intrinsic job satisfaction.
6. Motivation Potential Score (MPS)
- Formula: MPS = Job Meaningfulness × Autonomy × Job Feedback.
- Components: Job meaningfulness is influenced by skill variety, task identity,

and task significance.
- Impact: Higher scores indicate higher motivation potential.
7. Individual Differences
- Factors: Worker knowledge, growth-need strength, satisfaction with contextual

factors.
- Influence: Varying reactions to job enrichment based on individual

characteristics.
- Contextual Factors: Include reward systems, supervisory style, and co-worker

satisfaction.
Application Stages of Job Enrichment

1. Making a Thorough Diagnosis
- Method: Job Diagnostic Survey (JDS) evaluates job aspects.
- Output: Motivating Potential Score (MPS) based on meaningfulness,

autonomy, and feedback.
- Purpose: Identify job aspects impacting motivation and satisfaction.
2. Forming Natural Work Units
- Objective: Group interrelated tasks to form cohesive units.
- Impact: Increases task identity and significance, enhancing job

meaningfulness.
- Example: Enhances job ownership and engagement.
3. Combining Tasks
- Strategy: Integrate separated tasks into larger, more comprehensive roles.
- Outcome: Increases task identity and skill variety.
- Example: Corning Glass Works improved productivity by combining assembly

tasks.
4. Establishing Client Relationships
- Goal: Connect workers directly with end-users for feedback.
- Benefits: Enhances task significance, autonomy, and job feedback.

- Example: Increased satisfaction and performance at Indiana Bell Telephone.
5. Vertical Loading
- Definition: Empower workers with managerial responsibilities.
- Result: Increases autonomy and accountability.
- Example: IBM assembly workers gained autonomy in quality control.
6. Opening Feedback Channels
- Approach: Provide immediate, direct feedback on performance.
- Advantage: Enhances intrinsic motivation and job satisfaction.
- Example: Corning Glass Works' operators saw improved performance with

direct inspection.
Barriers to Job Enrichment
- Technical System: Limits job changes due to technology constraints.
- Personnel System: Rigid job descriptions hinder flexibility.
- Control System: Strict procedures limit job complexity and challenge.
- Supervisory System: Autocratic methods restrict autonomy and feedback.
Sociotechnical Systems Approach

- Conceptual Background
- Origin: Developed at Tavistock Institute, London; spread globally.
- Premises: Organization as a sociotechnical system; open to environment.
- Sociotechnical System
- Components: Social (people, relationships) and technical (tools, methods).
- Outcome: Product and human satisfaction through joint optimization.
- Application in Organizations
- Examples: Intel, United Technologies, General Mills apply STS for innovative
work designs.
- Contrast: Focuses on integrating social and technical aspects for optimal

performance and human satisfaction.
- Comparison: Differs from engineering (technical focus) and motivational

(human fulfillment) approaches.
Environmental Relationship in STS
- Open Systems Interaction: STS are open systems interacting with their
environment for resources (energy, materials, information) and providing
products/services.

- Boundary Management: Ensures effective exchange while protecting from

disruptions.
- Purpose: Facilitates adaptation to change and influence on the environment.
- Methods: Structuring relationships to balance autonomy and external exchange.
Self-Managed Work Teams (SMWT)
- Definition and Responsibilities:
- Also known as self-directed or high-performance teams.
- Handle complete products/services or significant parts of processes.
- Control task behaviors, assignments, methods, and production goals within

organizational limits.
- Team Task Design:
- Task Differentiation: Autonomy and completeness of team tasks.
- Example: Johnsonville Sausage teams handle interrelated tasks independently.
- Boundary Control: Influence over environmental transactions (inputs,

outputs).
- Example: Nursing teams in hospitals manage specific patient groups or

processes.
- Task Control: Regulation of own behavior and production methods.
- Example: Freedom to schedule activities and adjust goals based on task

demands.

- Benefits and Applications:
- Flexibility and Efficiency: Cross-training reduces dependency on external

resources.
- Responsibility and Adaptability: Members manage equipment, materials, and

technical variances.
- Performance Optimization: Control over production processes reduces

overhead costs.
- Team Process Interventions:
- Purpose: Address social process issues like communication, roles, decision-

making.
- Methods: Process consultation, team building to enhance team functioning.
- Development: Members acquire process skills through training or OD support.
Organization Support Systems for Self-Managed Work Teams
- Organizational Structure:
- Traditional vs. Organic: Bureaucratic structures hinder self-managed teams;

organic structures with flexibility and decentralized authority support them.
- High-Involvement Organizations: Flat structures, open information systems,

team-based selection and rewards foster teamwork and self-management.

- External Leadership Role:
- Team Facilitator: Supports team in decision-making, goal setting, and member

selection.
- Skills Needed: Understanding of sociotechnical principles, group dynamics,

task environment, and technology.
- Tasks: Develops team autonomy, manages boundaries, mediates with other

units.
- Challenges for Managers:
- Ambiguity in responsibilities and authority.
- Lack of required skills and organizational support.
- Insufficient attention from higher management.
- Frustration due to complex demands of supervisory role.
Characteristics of Self-Managed Work Teams
- Based on team concepts with few hierarchical levels and job descriptions.
- Egalitarian culture without status symbols like special dining rooms or parking.
- Uniformity in dress code, if required.
- Team Characteristics:
- Physical Site: Dedicated location for team operations.
- Functional Boundaries: Clearly defined responsibilities.
- Team Size: Typically small (5-15 members) for effective collaboration.
- Autonomy: Order materials, set goals, determine rewards, participate in

hiring/firing decisions.
- Vision: Shared sense of direction and purpose energizes team efforts.
- Partnership: Strong collaboration between team, management, and, if

applicable, unions.
- Member Characteristics:
- Diversity: Variety in viewpoints, backgrounds, and skills enhances learning and

decision-making.
- Information Sharing: Open communication and well-developed information

systems.
- Skills: Proficiency in technical areas, finance, accounting, and interpersonal

skills.
- Training: Continuous learning and cross-training are essential for team success.
- Customer Focus:
- Emphasis on internal and external customers.
- Understanding customer needs and market competition guides team actions.

Lesson 39
Performance management
Goal Setting
- Definition: Goal setting involves defining and clarifying employee goals, which
provides direction and purpose for organizational activities.
- Types of Goals:
- Challenging Goals: Stimulate higher performance as they push individuals or

teams to achieve beyond standard expectations.
- Specific Hard Goals: Outperform vague or generalized goals like "do your
best" by providing clear targets.
- Feasibility: Goals must be perceived as achievable to maintain motivation;

overly ambitious goals can lead to discouragement.

- Participation: Employees are more committed to goals they help set, fostering
ownership and dedication.
- Feedback: Regular feedback on goal progress enhances performance by

allowing adjustments and improvements.
- Implementation Examples:
- GE's Stretch Goals: Encourage significant productivity and quality

improvements through ambitious objectives.
- Six Sigma at GE: Aimed at achieving near-perfect manufacturing quality with

statistical precision.
- Companies Using Goal Setting: Include 3M, AT&T Universal Card, and
Occidental Petroleum's Oxy-USA.
- Characteristics and Considerations:
- Individual Differences: Goal-setting programs are effective across various job

roles and educational backgrounds.
- Team Considerations: Setting individual goals for interdependent team tasks

may undermine teamwork unless coordinated with team goals.
- Management Support: Crucial for success; managers should provide

optimism, encouragement, and consistent feedback and rewards.
Here's the continuation and completion of the notes on Application Stages and
Application Stages of Goal Setting

1. Diagnosis: Comprehensive assessment of job roles, employee needs, and

contextual factors (business strategy, workplace technology, employee
involvement).
2. Preparation for Goal Setting: Increasing communication between managers

and employees, formal training in goal-setting methods, and developing action
plans for implementation.
3. Setting of Goals: Establishing challenging goals with clear measurement

methods, involving employees to the extent supported by contextual factors and
their ability to set higher goals.
4. Review: Evaluation of the goal-setting process to ensure goals are energizing,

challenging, strategically aligned, and supported by employees.
Management by Objectives (MBO)
- Definition: MBO integrates individual and organizational goals through

participative goal setting and continuous performance review.
- Purpose: Enhances performance, communication, job satisfaction, and

organizational alignment by focusing on both organizational and individual goals.
- Process Steps:

1. Work Group Involvement: Defining group and individual goals, establishing

action plans.
2. Joint Manager-Subordinate Goal Setting: Aligning individual roles with

organizational goals, clarifying responsibilities.
3. Action Plans: Developing plans for goal achievement, reflecting individual

styles and responsibilities.
4. Success Criteria: Agreement on how success will be measured, ensuring

mutual understanding and communication clarity.
5. Review and Recycle: Periodic review of progress, discussion of achievements,

obstacles, future plans, coaching, and counseling.
6. Maintenance of Records: Documenting goals, criteria, progress, and feedback

for ongoing review and improvement.
- Benefits of MBO: Motivates through goal clarity, fosters collaboration, and

ensures alignment between individual efforts and organizational objectives.
- Challenges: Requires clear communication, mutual trust, and commitment from

both managers and employees to succeed.
Criticism of MBO
- Cost and Time-Consuming: Implementation of MBO is resource-intensive,

limiting its application to managerial and professional levels due to the effort
required.

- Skill Requirement: Proper MBO implementation necessitates improved

managerial skills and competence, which may not always be present.
- Equality in Goal-Setting: Critics question the feasibility of joint goal-setting

among unequal parties, especially concerning lower-level employees.
- Quantitative Focus: Some MBO programs overly emphasize quantitative goals,

neglecting qualitative aspects critical to overall performance.
- Communication Issues: In some instances, MBO can lead to top-down

communication instead of fostering open dialogue and mutual goal setting,
potentially overlooking critical job aspects.
Performance Appraisal
- Definition: Feedback system evaluating individual or group performance by

supervisors, managers, or peers, influencing pay, promotion, and development
decisions.
- Purpose: Links goal-setting with reward systems, serves organizational and

employee development needs.
- Issues and Innovations:
- Traditional vs. High-Involvement Approaches:
- Traditional: Supervisor-led, administratively driven, focused on past

performance.
- High-Involvement: Includes multiple raters (360-degree feedback),

emphasizes developmental feedback, and real-time performance management.

- Challenges: Subjectivity in measurement, legal compliance, and aligning

appraisal with evolving business strategies.
- Benefits: Enhanced accuracy, acceptance, and alignment with organizational

goals through ongoing feedback and multiple perspectives.
Implementation of Performance Appraisal Systems
1. Selecting Stakeholders: Involving HR, legal, senior management, and system

users to ensure comprehensive design considering political and legal implications.
2. Diagnosing Current Situation: Assessing current appraisal practices,

organizational strategy, and employee involvement to identify strengths and
weaknesses.
3. Establishing Purposes and Objectives: Defining appraisal goals (e.g.,

feedback, development, rewards) to align with organizational needs and employee
expectations.
4. Designing the System: Determining appraisal methods, frequency of feedback,

and criteria for performance measurement to ensure timeliness, accuracy, and
acceptance.
5. Pilot Testing: Testing the new system in a limited scope to identify and rectify
design flaws before full implementation.

6. Evaluating and Monitoring: Continuously assessing system effectiveness

through user satisfaction, legal compliance, and alignment with strategic goals.
Reward Systems
- Impact on Performance: Rewards significantly influence employee and group

performance, drawing from value expectancy theory which explains that
employees exert effort to achieve goals that lead to valued outcomes.
- Key Factors Affecting Motivation:
1. Availability: Rewards must not only be desired but also accessible; inadequate
rewards can demotivate.
2. Timeliness: Rewards should be timely to reinforce desired behaviors

effectively.
3. Performance Contingency: Rewards should directly link to specific

performance achievements, maintaining clear cause-effect relationships.
4. Durability: Intrinsic rewards, such as increased autonomy, may have longer-

lasting effects compared to extrinsic rewards like pay increases.
5. Equity: Employee satisfaction and motivation increase when rewards are

perceived as fair internally (within the organization) and externally (compared to
industry standards).
6. Visibility: Rewards must be visible within the organization to signal

performance expectations and encourage motivation.

Specific Rewards: Pay, Promotions, and Benefits
1. Pay: A fundamental extrinsic reward, pay impacts motivation based on its

perceived fairness and alignment with performance.
2. Promotions: Offer opportunities for career advancement and increased

responsibilities, motivating employees to perform at higher levels.
3. Benefits: Include non-wage compensation such as healthcare, retirement plans,

and employee perks, contributing to overall job satisfaction and retention.
Design and Implementation of Reward Systems
- OD Perspective: Integrates reward systems with organizational structures,

human relations philosophies, and work designs for congruence and effectiveness.
- Objectives: Align rewards with organizational goals, enhance employee

satisfaction, and improve performance through intrinsic and extrinsic motivators.
- Considerations: Ensure rewards are aligned with performance outcomes,

maintain fairness and visibility, and adapt to organizational changes and employee
needs.
Effective reward systems play a crucial role in organizational development by

motivating employees, aligning behaviors with goals, and enhancing overall
performance and satisfaction. By addressing intrinsic and extrinsic motivators and
ensuring fairness and visibility, organizations can leverage reward systems to
achieve strategic objectives and foster a positive work environment. We also know
how reward systems impact performance, the key factors influencing motivation,
and the specific types of rewards such as pay, promotions, and benefits. They also
emphasize the importance of designing and implementing reward systems that are
fair, visible, and aligned with organizational goals to maximize their effectiveness
in fostering employee engagement and organizational success.
Lesson 40
Developing and Assisting Members
Career Planning and Development Interventions:
- Adapting to Trends: Organizations must adjust career planning and

development due to evolving career stages, technological changes, and global
competition.
- Social Contract: Redefining the relationship between individuals and

organizations is necessary.

- Workforce Diversity: Increasing diversity (gender, age, values, thinking styles,

ethnicity) requires strategic responses.
- Wellness Interventions: Programs addressing fitness, health consciousness,

substance abuse, and work-life balance.
Career Planning and Development:
- Employee Control: More managers and professional staff seek control over their
careers due to organizational downsizing and restructuring.
- Employer's Role: Organizations provide career planning to attract and retain

talent, particularly women and minorities.
- Special Programs: Nontraditional methods are often needed for career

development, especially for women, minorities, and older employees.
- Career Halt: Programs help employees cope with layoffs and job losses from
organizational decline or restructuring.
Career Stages:
1. Establishment Stage (21-26 years):
- Uncertainty about competence and potential.
- Dependence on bosses and experienced employees.
- Initial career choices and exploring possibilities.

2. Advancement Stage (26-40 years):
- Independent contributions and career advancement.
- Autonomous performance and less guidance needed.
- Clarifying long-term career options.
3. Maintenance Stage (40-60 years):
- Holding on to career successes.
- Helping less-experienced subordinates.
- Midlife crisis for those dissatisfied with career progress.
4. Withdrawal Stage (60+ years):
- Preparing for retirement.
- Imparting knowledge and experience to others.
- Feeling fulfilled and ready for leisure.
Career Planning:
- Setting Objectives: Personalized process assessing interests, capabilities, values,

and goals.
- Career Planning Programs: Include communication about opportunities,

workshops, career counseling, self-development materials, and assessment
programs.
Career Planning Issues by Stage:
- Establishment: Identifying alternatives, assessing capabilities, learning

performance expectations.
- Advancement: Getting ahead, exploring long-term options, integrating career

and personal life.
- Maintenance: Helping others, reassessing career, redirecting actions.
- Withdrawal: Interests outside work, post-retirement options, financial security.
Application - Pacific Bell Career Planning Centers:
- Career Centers: Managed by specialists with extensive training, providing

confidential services.
- Resources: Print, audio, video materials, job posting systems, career-life

planning programs.
- Workshops: Resume writing, interviewing, career assessments.
- Counseling: Personal skills assessment, career choice identification, ongoing

support during transitions.
- Response to Changes: Centers created due to strategic changes, shifting

employee values, and a flattening organizational structure.
Career Planning and Development

Introduction:
Career planning and development is vital for both individual growth and
organizational success. It involves a series of stages where individuals can enhance
their skills, explore career options, and achieve personal and professional goals.
Companies play a crucial role by providing resources and opportunities to facilitate
this process.
Stages of Career Development:
1. Establishment Stage:
- Goal: To help individuals gain clarity about their career goals and begin
building the necessary skills.
- Interventions: Realistic job previews, job pathing, performance feedback, and

coaching.
- Purpose: Reduce turnover, increase job satisfaction, and build organizational

knowledge.
2. Advancement Stage:
- Goal: To support employees in achieving higher positions and responsibilities.
- Interventions: Job rotation, challenging assignments, dual-career

accommodations, mentoring, and developmental training.
- Purpose: Increase productivity, enhance job satisfaction, and retain high-

quality members.

3. Maintenance Stage:
- Goal: To help individuals remain effective and motivated in their current roles
and prepare them for future transitions.
- Interventions: Mentoring, developmental training, work-life balance planning,

and consultative roles.
- Purpose: Maintain motivation, improve quality of life, and leverage experience

for organizational benefit.
4. Withdrawal Stage:
- Goal: To assist employees in transitioning smoothly from active work to

retirement.
- Interventions: Phased retirement, retirement planning workshops, and

counseling.
- Purpose: Lower stress during transition, ensure financial security, and convey
value for their contributions.
Key Career Development Interventions:
1. Realistic Job Preview:
- Description: Provides accurate expectations of work requirements during the

recruitment process.
- Benefits: Reduces turnover, training costs, and increases job satisfaction.

2. Job Pathing:
- Description: Offers a sequence of work assignments leading to a career

objective.
- Benefits: Develops skills, reduces turnover, and builds organizational

knowledge.
3. Performance Feedback and Coaching:
- Description: Continuous feedback and support to improve job performance.
- Benefits: Increases productivity, job satisfaction, and helps monitor human

resources development.
4. Assessment Centers:
- Description: Evaluates managerial potential through interviews, tests, and

exercises.
- Benefits: Increases person-job fit, identifies high-potential candidates, and

supports career advancement.
5. Mentoring:
- Description: Establishes a developmental relationship between a less-

experienced member and a more-experienced mentor.
- Benefits: Increases job satisfaction, motivation, and facilitates knowledge

transfer.

6. Developmental Training:
- Description: Provides education and training opportunities to achieve career

goals.
- Benefits: Enhances organizational capability and prepares employees for

mentoring and coaching roles.
7. Work-Life Balance Planning:
- Description: Helps employees balance work and personal goals.
- Benefits: Improves quality of life, increases productivity, and reduces turnover.
8. Job Rotation and Challenging Assignments:
- Description: Provides opportunities for employees to take on new and

challenging tasks.
- Benefits: Increases job satisfaction and maintains member motivation.
9. Dual-Career Accommodations:
- Description: Assists members with significant others to find satisfying work

assignments.
- Benefits: Attracts and retains high-quality members and increases job

satisfaction.
10. Consultative Roles:

- Description: Helps experienced members take on advisory roles later in their

careers.
- Benefits: Increases problem-solving capacity and job satisfaction.
11. Phased Retirement:
- Description: Assists members in transitioning to retirement.
- Benefits: Increases job satisfaction and lowers stress during transition.
2. Realistic Job Preview
- Purpose: To set realistic expectations for recruits during the recruitment process.
- Stages: Especially useful in the establishment stage and advancement stage.
- Benefits:
- Reduces reality shock.
- Decreases turnover.
- Increases job satisfaction and organizational commitment.
- Application:
- Companies like Texas Instruments and Prudential Insurance provide new

recruits with detailed information about the company and the job.
- Techniques: Booklets, talks, and site visits.
3. Job Pathing
- Definition: Sequence of work assignments leading to a career objective.

- Stages: Helps in establishment and advancement stages.
- Benefits:
- Develops skills, knowledge, and competencies.
- Reduces turnover.
- Builds organizational knowledge.
- Application:
- Example: Banks use job pathing to develop branch managers by moving

employees through jobs such as teller, loan officer, and credit manager.
4. Performance Feedback and Coaching
- Importance: Crucial during the establishment and advancement stages.
- Functions:
- Provides feedback on performance.
- Offers coaching and on-the-job training.
- Benefits:
- Increases employee performance and satisfaction.
- Helps in systematic monitoring of human resource development.
- Application:
- Companies like Intel and Monsanto separate career development feedback from
salary reviews.

5. Assessment Centers
- Purpose: Originally for selecting and developing managerial talent, now also
used for career development.
- Process:
- Comprehensive interviews, tests, and simulation exercises.
- Feedback on managerial potential.
- Benefits:
- Helps in career advancement and selection for new work designs.
- Provides support and direction for career development.
- Application:
- Example: Hamilton-Standard used assessment centers for selecting team

members for a high-involvement work design.
6. Mentoring
- Definition: Establishing a link between experienced managers and less

experienced employees.
- Stages: Beneficial in establishment, advancement, and maintenance stages.
- Benefits:
- Provides career guidance and opportunities for promotion.
- Shares knowledge and experience.
- Application:
- Boeing pairs high-potential employees with corporate managers for mentoring.

- Mentoring programs are also created for women and minorities.
7. Developmental Training
- Purpose: Helps employees gain skills for training and coaching others.
- Components:
- Workshops on human relations, communication, active listening, and mentoring.
- Substantial investments in education, such as tuition reimbursement.
- Benefits:
- Increases the organization’s reservoir of skills and knowledge.
- Enhances capability to implement personal and organizational strategies.
- Application:
- Companies like Procter & Gamble, Cisco Systems, and IBM offer
developmental training programs for mid-career managers.
- Techniques: Preparatory reading, lectures, experiential exercises, and case

studies.
These career development interventions not only address the needs of employees at
various stages of their careers but also contribute to overall organizational
effectiveness by enhancing skill levels, reducing turnover, and increasing job
satisfaction.
Work-Life Balance Planning

This intervention helps employees balance work and home life better. Due to
restructuring, downsizing, and global competition, work hours have increased,
causing more stress. Employees, especially baby boomers, are seeking to restore
balance in their lives. Organizations like Corning Glass Works, Hewlett-Packard,
and Infonet are responding to attract, retain, and motivate the best workforce.
Benefits include increased creativity, morale, and reduced turnover. Programs
include flexible hours, job sharing, day care, and helping employees achieve
career and family goals. A popular program, "middlaning," helps redesign work to
provide more time for family and personal needs, involving education in work
addiction and financial planning.
Job Rotation and Challenging Assignments
These interventions provide employees with experience and visibility for career
advancement or to revitalize stagnant careers. Unlike job pathing, these are less
planned and may not focus on promotion opportunities. Employees are moved into
new areas after demonstrating competence. Companies like Corning Glass Works
and Hewlett-Packard identify high-potential candidates and provide them with
cross-divisional experiences. Fallback positions are created to reduce the risk of
unsuccessful transfers. For mid-career employees, challenging assignments prevent
loss of job motivation. Research suggests rotating employees every three years to
maintain motivation. Firms with stable strategies, like the U.S. Post Office, should
help plateaued employees adapt to lateral job changes and enforce high
performance standards.
Dual-Career Accommodations

These practices help employees cope with the problems of both partners pursuing
full-time careers, especially during the advancement stage. Job transfers often
require relocation, affecting both partners. Companies devise policies to
accommodate dual-career employees, such as help with relocation, flexible
working hours, counseling, daycare centers, improved career planning, and policies
for family members working in the same organization. Cooperative arrangements
with other firms provide employment opportunities for partners. General Electric
has a network to share job information for dual-career couples.
Consultative Roles
These roles provide late-career employees with opportunities to help others

develop their careers and solve organizational problems. Unlike mentoring,
consultative roles focus on specific projects or problems and involve offering
advice and expertise. For example, a pre-retirement production manager consulted
with sales and estimating departments to improve bid accuracy. Consultative roles
do not include managerial performance evaluation and control, making them less
threatening. They increase problem-solving capacity and provide senior employees
with meaningful work as they transition to retirement.
Phased Retirement
This approach allows older employees to gradually transition from work to leisure
life through part-time work. It helps employees contribute to the firm while
preparing for life outside work. Programs like IBM's tuition rebates for pre-retirees
help them prepare for second careers. Phased retirement reduces the shock of

sudden retirement and helps employees withdraw emotionally from the

organization. Many companies now offer phased retirement programs.
Organization Decline and Career Halt
Due to decreased demand, mergers, acquisitions, and restructurings, many

managers and employees face layoffs and career disruptions. Organizations
manage decline by adopting equitable layoff policies, keeping employees
informed, setting realistic expectations, and offering relocation and transfer help.
Outplacement services, retraining, and treating employees with dignity are crucial.
OD practitioners help manage career dislocation and halt, aiding employees in
adapting to changes and finding new opportunities.
Lesson 41
Developing and Assisting Members
Workforce Diversity Interventions
Workforce Diversity Overview
- Modern workforce characteristics have changed significantly over the past 20

years.
- Employees now represent diverse ethnic backgrounds, education levels, ages,

health conditions, family structures, and physical/mental abilities.
- Diversity involves more than cultural or ethnic differences; it includes a wide

range of distinctive needs, preferences, expectations, and lifestyles.
- Organizations must design HR systems to accommodate these differences to

attract and retain a productive workforce and leverage diversity as a competitive
advantage.
Framework for Managing Diversity
1. Diversity Pressures:
- Pro-Diversity: Argue that embracing diversity enhances organizational

performance.
- Anti-Diversity: Fear that diverse perspectives might hinder concerted action.
2. Management's Perspective:
- Can range from resistance (implementing only legally mandated policies) to

active learning (viewing diversity as a competitive advantage).
3. Strategic Responses:
- Reactive: Responding to issues after they occur.
- Proactive: Anticipating and addressing diversity issues before they arise.
4. Implementation Style:
- Episodic: Addressing diversity issues in a piecemeal fashion.
- Systemic: Integrating diversity-friendly values and practices into the

organizational culture.
Internal and External Pressures and Interventions

1. Age
- Trend: Rising average age of the workforce; increasing proportion of older

workers.
- Implications: Differentiated HR practices needed for older and younger

workers.
- Interventions:
- Work design to accommodate physical capabilities and career stages.
- Wellness programs.
- Career planning and development.
- Reward systems tailored to different age groups.
2. Gender
- Trend: Increasing percentage of female workers.
- Implications: Increased health-care costs, demand for child care, flexible

working arrangements.
- Interventions:
- Job sharing.
- Fringe benefits tailored to family needs.
- Career development programs like job pathing, challenging assignments, and

mentoring.
3. Disability

- Trend: More people with disabilities entering the workforce.
- Implications: Need for comprehensive health care, physical workplace

accommodations, new attitudes toward disabled workers.
- Interventions:
- Work design to simplify tasks or leverage diverse skills.
- Career planning and development for disabled workers.
- Performance management systems that accommodate disabilities.
4. Culture and Values
- Trend: Increasing cultural diversity and differing values.
- Implications: Need for management practices aligned with diverse cultural

values and norms.
- Interventions:
- Employee involvement practices tailored to cultural expectations.
- Flexible reward systems and working hours.
- Career planning and development programs aligned with cultural values.
5. Sexual Orientation
- Trend: Increasing acceptance and prevalence of same-sex households.
- Implications: Need for equal employment opportunities and supportive

policies.
- Interventions:
- Anti-discrimination policies.
- Fringe benefits that support diverse family structures.
- Education and training programs to promote inclusivity.
Culture and Values
Cultural diversity requires management practices aligned with cultural values.

Organizations must address both extrinsic and intrinsic needs and adapt employee
involvement practices to different cultural expectations.
Interventions:
Flexible working hours and locations.
Career planning and development aligned with cultural values.
Employee involvement practices tailored to cultural participation expectations.
Sexual Orientation
Diversity in sexual orientation necessitates interventions to prevent discrimination

and promote equality.
Interventions:
Education and training to increase awareness.
Human resources practices addressing equal employment opportunities.
Offering domestic-partner benefit plans.

Employee Wellness Interventions
Organizations are increasingly aware of the relationship between employee

wellness and productivity. Stress-related ailments cost industries significantly,
prompting the growth of Employee Assistance Programs (EAPs) and stress
management interventions.
Employee Assistance Programs (EAPs)
EAPs identify, refer, and treat employee problems affecting performance. Initially
focused on alcoholism, EAPs now address a range of issues including drug abuse,
emotional, family, marital, and financial problems.
Interventions:
Broad programs addressing multiple issues.
Focused programs dealing with specific problems like substance abuse.
Successful EAPs have been implemented by organizations such as General Motors

and Johnson & Johnson, demonstrating positive effects on employee well-being
and productivity.
Employee Assistance Program Model
1. Identification and Referral
- Formal Referral: Identifies employees with performance issues and encourages

them to join the EAP.

- Informal Referral: Employees voluntarily seek help, even without performance

problems.
- Supporting Activities:
- Clear written policies.
- Public support from top management and HR.
- Training programs for supervisors.
- Ensuring confidentiality for employees.
2. EAP Office
- Functions:
- Accepting employees into the program.
- Problem evaluation and initial counseling.
- Referring to treatment resources.
- Monitoring progress and reintegrating employees.
- In-house vs. External Resources:
- In-house: Direct control but potential confidentiality issues.
- External: Requires screening and qualification of providers.
- Management:
- Clear procedures relating to disciplinary actions.
- Maintaining confidential treatment records.

3. Treatment
- Resources:
- Inpatient and outpatient care.
- Social services.
- Self-help groups.
- Variability: Depends on the specific needs and resources of the organization.
Implementing an Employee Assistance Program
1. Develop an EAP Policy and Procedure
- Guidelines should include confidentiality, disciplinary procedures,

communication, training, and program philosophy.
- Involve senior management and unions (if applicable) for worker commitment.
2. Select and Train a Program Coordinator
- The coordinator oversees program activities, training, publicity, evaluation,

troubleshooting, and support.
3. Obtain Employee/Union Support
- Engage key representatives for input on EAP features, policy review, and
endorsements.

4. Publicize the Program
- Increase awareness of EAP procedures, resources, and benefits among employees

and managers.
5. Establish Relationships with Health-Care Providers and Insurers
- Review insurance policies for mental health and chemical dependency treatment
coverage.
- Prepare EAP staff to advise on insurance coverage and personal expenses.
6. Schedule EAP Training
- Ensure training methods and materials are up-to-date and accurate, including role
plays and referral methods.
7. Continually Administer and Manage the Plan
- Review program effectiveness through audits, user satisfaction, and adjustments

to treatment options.
- Provide ongoing training to EAP staff on legal requirements, new options,

organizational changes, and service quality.
Stress Management Programs
Definition and Model

- Stress: Reaction to environmental conditions requiring behavioral adjustments.
- Positive Stress: Moderate levels leading to motivation, innovation, and learning.
- Negative Stress: Excessive or prolonged stress causing physical and emotional

exhaustion.
- Person-Environment Fit: Good fit leads to positive stress; poor fit leads to
negative consequences.
Interventions
- Diagnosis and Awareness: Identifying stress and its causes.
- Coping Mechanisms: Changing the causes of stress and helping people cope.
Causes and Consequences of Work Stress
Occupational Stressors:
- Job demands, lack of control, inadequate support, etc.
- Individual Differences: Social support, coping abilities, etc.
- Negative Consequences: Anxiety, poor decision-making, health issues, low

productivity.
Stress and Work: A Working Model
Figure 57: Stress Model

Consequences
- Subjective: Anxiety, apathy.
- Behavioral: Alcoholism, drug abuse, accident proneness.
- Cognitive: Poor concentration, mental blocks, burnout.
- Physiological: Increased blood pressure, increased heart rate.
Occupational Stressors
- Physical Environment: Light, noise, temperature, polluted air.
- Individual Factors: Role conflict, role ambiguity, work overload, lack of

control, responsibility, work conditions.
- Group Factors: Poor relationships with peers, subordinates, bosses.
- Organizational Factors: Poor structural design, politics, no specific policy.
Individual Differences
- Cognitive/Affective:
- Type A or B behavior patterns: Type A (impatient, competitive, hostile) and

Type B (less hurried, aggressive, hostile).
- Hardiness: Resilience to stress.
- Negative Affectivity: General tendency to experience negative emotions.
- Biological/Demographic:

- Age: Younger individuals might cope differently than older ones.
- Gender: Stress responses can differ between men and women.
- Social Support: Strong support networks can mitigate stress.
- Occupation: Different jobs have varying stress levels.
- Race: Cultural differences can influence stress perception and coping.
Diagnosis and Awareness of Stress and Its Causes
Methods for Diagnosing Stress
- Charting Stressors: Identifying and measuring organizational and personal

stressors through questionnaires and interviews.
- Health Profiling: Assessing stress symptoms and health risks through medical
history, personal habits, and physical examinations.
Alleviating Stressors and Coping with Stress
Changing Organizational Conditions
- Role Clarification:
- Process:
1. Identify relevant people involved in defining a role.
2. Discuss and agree on role expectations.

3. Create a written role description.
4. Periodically review and adjust the role as necessary.
- Supportive Relationships: Improving relationships with peers, subordinates, and

superiors to reduce stress.
Helping People Cope with Stress
- Stress Inoculation Training: Teaching employees coping skills and stress

management techniques.
- Health and Fitness Facilities: Providing resources for physical health to

mitigate stress.
Summary of Organizational Stressors and Stress Management Techniques
- Work Overload: Can be quantitative (too much to do) or qualitative (too

difficult). Both can lead to negative stress if not balanced with abilities and
knowledge.
- Role Ambiguity and Conflict: Unclear or contradictory expectations can cause

stress, especially in managerial roles.
- Individual Differences: Type A personalities are more prone to stress. Social

support and hardiness can mitigate stress effects.
Implementing Stress Management Interventions

- Organizational Level: Adjust work conditions, clarify roles, improve

relationships.
- Individual Level: Provide training for coping skills, offer health and fitness
resources.
Role Clarification and Supportive Relationships
Role Clarification
Role clarification helps employees understand their job demands by clearly

defining their responsibilities and expectations. This process involves:
1. Identifying Relevant People:
- Gather individuals relevant to defining a role (e.g., managerial team, boss,

subordinate, other departments).
2. Discussion and Consensus:
- Role holder discusses their perceived duties and responsibilities.
- Other participants comment, agree, or disagree with the role holder's

perceptions.
- An OD practitioner may facilitate the discussion to reduce defensiveness.
3. Role Description:

- Once consensus is reached, the role holder writes a description of the agreed-
upon activities.
- A copy of the role description is distributed to all participants.
4. Periodic Review:
- Participants periodically check if the role is being performed as intended and

make necessary modifications.
Supportive Relationships
Establishing supportive and positive relationships among employees helps buffer

stress. Key elements include:
1. Trust and Care:
- Supportive relationships involve genuine care and willingness to help.
2. Interventions:
- Supportive relationships are integral to team building, intergroup relations,

employee involvement, work design, goal setting, and career planning and
development.
3. Boss-Subordinate Relationship:

- A supportive boss can significantly reduce stress-related health issues among

subordinates.
4. Building Supportive Groups:
- Organizations should create supportive, cohesive workgroups, especially in

stressful situations like introducing new products or solving emergency problems.
Stress Inoculation Training and Health Facilities
Stress Inoculation Training
This training helps employees cope with stress by teaching them to recognize and
manage stress signals. The process includes:
1. Understanding Stress Signals:
- Recognize warning signals like decision-making difficulty, sleep and eating

disruptions, headaches, and backaches.
2. Admitting Stress Levels:
- Encourage employees to admit when they are overstressed or understressed.
3. Developing Coping Plans:

- Create a concrete plan to cope with stress.
- Use a coping self-statement procedure:
- Preparation: "What am I going to do about these stressors?"
- Confrontation: "I must relax and stay in control."
- Coping: "I must focus on the present set of stressors."
- Self-reinforcement: "I handled it well."
Health Facilities
Organizations provide facilities to help employees cope with stress, including:
1. Exercise Facilities:
- Companies like Xerox, Weyerhaeuser, and PepsiCo maintain elaborate exercise

facilities.
2. Cardiovascular Fitness Programs:
- Firms like Exxon, Mobil, and Chase Manhattan Bank operate corporate fitness
programs.
3. Biofeedback Facilities:
- Companies like McDonald's and Equitable Life provide biofeedback devices to

monitor and reduce stress.
4. Meditation and Stay-Well Programs:
- Some companies provide time for meditation and programs that encourage
healthy diets and lifestyles.
Lesson 42
Organization and Environment Relationships
Introduction
Organizations are dynamic entities that interact with their environments to acquire
resources and deliver valued products or services. The strategies organizations
adopt are shaped by environmental factors, prompting various responses to manage
these interactions effectively.
Organization and Environment Framework
Organizations exist as open systems within environmental contexts, influenced by

two main types of environments:

1. Task Environment:
- Comprises direct interactions with specific entities like customers, suppliers,

competitors, and regulatory bodies.
- These interactions directly impact an organization's ability to achieve its goals

and outcomes.
2. General Environment:
- Encompasses broader external forces such as technological, legal, political,

economic, social, and ecological factors.
- These forces affect organizations indirectly but significantly, influencing

operations and strategic decisions.
3. Enacted Environment:
- Represents how organization members perceive and interpret their general and
task environments.
- This perception shapes organizational responses and strategies.
Environmental Types
Organizational environments can be categorized into:
- Task Environment: Direct interactions with entities like customers and

suppliers.
- General Environment: Broader external forces influencing organizations

indirectly.
- Enacted Environment: Perception and interpretation of both task and general

environments by organization members.
Environmental Dimensions
Environments can be characterized along dimensions that affect organizational

responses:
1. Information Uncertainty:
- Degree of ambiguity in environmental information.
- High uncertainty requires extensive information processing to understand and

respond effectively.
2. Resource Dependence:
- Degree to which organizations rely on external sources for critical resources.
- Organizations manage resource dependence to maintain autonomy and

operational stability.
Organizational Responses

Organizations employ various responses to manage environmental influences:
1. Administrative Responses:
- Formulating mission statements, objectives, policies, and budgets to define

organizational purpose and resource allocation.
- Establishing scanning units to gather and interpret environmental information

for strategic decision-making.
Competitive Responses
Competitive responses are strategies employed by organizations, including for-

profit, nonprofit, and governmental entities, to achieve and sustain a competitive
advantage. This advantage is derived from three key principles:
1. Uniqueness:
- Organizations identify resources and processes that differentiate them from

competitors.
- These resources can include financial, reputational, technological, and human

resources.
- Distinctive competencies—unique organizational processes—are essential for

competitive advantage.
2. Value:

- Competitive advantage is achieved when organizational resources and

processes deliver outputs that justify higher prices or lower costs.
- Products or services with desirable features warrant higher prices (e.g.,

Mercedes automobiles), while those providing essential functionalities at low cost
also add value (e.g., Chevrolet automobiles).
3. Imitability:
- Sustainable competitive advantage requires resources and processes that are

difficult for competitors to replicate.
- Strategies to maintain this advantage include protecting critical information,

retaining key human resources, and leveraging economies of scale.
Collective Responses
Organizations utilize collective responses to manage environmental uncertainties

and dependencies through coordinated efforts with other entities. These responses
include:
- Bargaining, Contracting, and Co-opting:
- Methods to manage interdependencies among organizations.
- Examples include negotiating alliances or contracts to share resources and risks.
- Joint Ventures, Federations, Strategic Alliances, and Consortia:

- Collaborative arrangements among organizations to tackle complex tasks and

overcome barriers.
- Used for large-scale research and development, market entry, and technology
transfer.
- Challenges in Collective Responses:
- Barriers such as organizational autonomy and governmental policies limiting

coordination within industries.
- In contrast, Japanese policies supporting cooperation have bolstered industries

like consumer electronics.
Integrated Strategic Change (ISC)
ISC integrates organizational development with strategic planning to enhance

implementation effectiveness:
- Key Features:
- Treats strategy formulation, organizational design, and implementation as a

unified process.
- Involves stakeholders throughout the organization to foster ownership and

alignment.
- Application Stages:

- Strategic Analysis: Assessing readiness for change and current strategy.
- Strategic Choice: Designing a new strategy and organizational structure.
- Strategic Change Plan: Creating a comprehensive agenda for change.
- Implementation: Executing the change plan with adaptability and continuous

feedback.
Transorganizational Development (TD)
TD addresses complex challenges by fostering collaboration among multiple

organizations:
- Transorganizational Systems (TS):
- Groups of organizations collaborating for shared goals while maintaining

autonomy.
- Examples include joint ventures and public-private partnerships.
- Challenges and Application:
- Issues include managing autonomy, relationships, and varying levels of

commitment among member organizations.
- Evolution of TD focuses on creating effective TS and managing their dynamics

for sustained collaboration.

Transorganizational Development (TD) Stages
TD involves several stages aimed at creating and managing transorganizational

systems (TSs):
1. Identification Stage:
- Initial phase focused on identifying potential member organizations for the TS.
- Challenges include organizations' reluctance to collaborate due to perceived

autonomy or lack of familiarity.
- Change agents facilitate this stage by helping organizations clarify goals,

explore collaboration alternatives, and establish membership criteria.
- Leadership groups may be formed to guide initial discussions and decisions.
2. Convention Stage:
- Involves bringing potential members together to assess the feasibility and

desirability of forming a TS.
- Facilitated by change agents who may come from neutral entities like research
centers to ensure credibility.
- Structures and manages interactions to foster consensus and resolve differences

among diverse stakeholders.
3. Organization Stage:

- Once consensus is reached, members organize themselves to start performing

tasks.
- Involves creating structures (e.g., coordinating councils) and mechanisms (e.g.,

formal operating procedures) to facilitate communication and joint efforts.
- Legal and financial aspects are crucial, with corporate lawyers and analysts
playing significant roles in structuring agreements and responsibilities.
4. Evaluation Stage:
- Final phase where the TS performance is assessed through feedback

mechanisms.
- Change agents collect data on performance outcomes, member satisfaction, and

collaborative effectiveness.
- Feedback informs adjustments and potential returns to earlier stages for

corrections.
Roles and Skills of Change Agents in TD
TD practitioners require specific roles and skills to effectively manage the

complexities of TSs:
- Activist Role:
- Initiate and guide the formation of TSs where organizations are initially hesitant
or lack cohesion.

- Educate and structure interactions among potential members to build

understanding and alignment.
- Neutral Facilitator:
- Maintain impartiality to ensure fair treatment of all TS members.
- Facilitate conflict resolution and consensus-building among diverse

stakeholders.
- Political and Networking Skills:
- Political competence to navigate conflicts of interest and power dynamics

inherent in multi-organization systems.
- Networking abilities to establish and manage relationships across autonomous

organizations without hierarchical control.
- Team Consulting Approach:
- Engage diverse practitioners with complementary skills to handle multifaceted

TD projects effectively.
- Emphasize long-term, large-scale interventions involving multiple

organizational stakeholders.
Mergers and Acquisitions (M&A)
Overview of Mergers and Acquisitions (M&A)

Mergers and acquisitions (M&As) involve the combination of two organizations

through either a merger or acquisition process:
- Merger: Integration of two independent organizations into a new entity.
- Acquisition: Purchase of one organization by another, leading to integration into

the acquiring entity.
M&As are distinct from transorganizational systems (TSs) like alliances or joint
ventures, as they often result in the cessation of at least one of the original
organizations.
Rationale for Mergers and Acquisitions
Organizations pursue M&As for various strategic reasons:
- Diversification and Vertical Integration: Broadening market reach or

integrating supply chains.
- Access to Resources: Technology, global markets, or specialized capabilities.
- Operational Efficiencies: Cost savings, improved innovation, or resource

sharing.

M&As are favored when internal growth is slow, and alliances or joint ventures do
not offer sufficient control over critical resources.
Application Stages of Mergers and Acquisitions
M&As typically involve three main phases:
1. Pre-combination Phase:
- Search and Selection of Candidates: Developing criteria, identifying potential

partners, assessing regulatory compliance, and initiating contact.
- Formation of M&A Team: Appointing senior leaders and experts to oversee

due diligence and integration planning.
- Establishment of Business Case: Developing a strategic vision, competitive

strategy, and integration plan to justify the merger or acquisition.
- Due Diligence Assessment: Evaluating managerial, technical, financial, and

cultural compatibility between organizations.
- Merger Integration Planning: Defining integration objectives, organizational

design, and operational requirements.
2. Legal Combination Phase:
- Financial Negotiations: Finalizing terms and financial arrangements.
- Legal Formalities: Obtaining regulatory approvals, shareholder consent, and

filing legal documents.

3. Operational Combination Phase:
- Day 1 Activities: Implementing initial integration steps.
- Organizational and Cultural Integration: Combining systems, processes, and

cultures.
- Evaluation and Adjustment: Assessing performance, addressing challenges,

and refining integration plans.
Role of Organization Development (OD) Practitioners
OD practitioners contribute significantly to M&As, particularly in the pre-

combination and operational phases:
- Pre-combination Phase:
- Facilitate cultural and organizational due diligence to ensure compatibility

beyond financial metrics.
- Support the formation of the M&A team through team-building and process
consultation.
- Assist in developing a clear strategic vision and integration plan that considers
cultural integration and leadership alignment.
- Operational Combination Phase:
- Provide support in managing cultural integration and organizational change.

- Facilitate communication and conflict resolution among diverse stakeholders.
- Conduct evaluations to refine integration strategies and ensure alignment with

strategic goals.
Operational Combination Phase
The operational combination phase of mergers and acquisitions (M&A) is crucial

for implementing integration plans effectively. This phase starts during due
diligence and can extend for months or years beyond the legal consolidation. Key
activities include:
1. Day 1 Activities:
- Communication and Actions: Official announcements regarding leadership

changes, headquarters location, job roles, and areas affected by layoffs. These
actions convey critical messages to stakeholders about the merger's strategic
objectives and operational plans.
2. Operational and Technical Integration Activities:
- Physical and Structural Changes: Implementation of planned moves,

structural adjustments, work process revisions, and system integrations. These
activities range from logistical adjustments to significant operational
transformations.

- Case Example: American Airlines' acquisition of Reno Air illustrates the

extensive changes needed, such as uniform changes, signage updates, and route
integrations. Missteps, like poorly managed wage and benefit programs, can lead
to operational disruptions.
3. Cultural Integration Activities:
- Building New Organizational Norms: Activities aimed at fostering shared

values and norms across the merged entities. Success in this phase hinges on
merging technical and cultural aspects effectively.
- Example: Encouraging joint problem-solving among employees from both

organizations helps integrate operations and culture simultaneously.
Managing the Operational Combination Phase
Successful implementation of M&A initiatives requires strategic management of

the operational combination phase:
1. Timely Implementation:
- Early and rapid execution of integration plans minimizes disruptions and

uncertainties. This proactive approach helps maintain momentum and clarity,
crucial for achieving strategic goals and reassuring stakeholders.
2. Effective Communication:

- Clear and consistent communication to various stakeholders (shareholders,

regulators, employees) about integration plans, job security, and operational
changes. Transparent communication reduces uncertainty and enhances
collaboration.
3. Collaborative Problem-Solving:
- Encouraging collaboration between teams from both organizations enhances

role clarity, relationships, and employee commitment. Customer-focused
collaboration assures clients of continued service quality during transitions.
4. Continuous Assessment:
- Ongoing evaluation of integration progress and outcomes through targeted

assessments. Key questions include confirming financial projections, assessing
organizational efficiency, and resolving stakeholder concerns.
Case Example: Daimler-Benz and Chrysler Merger
The merger between Daimler-Benz and Chrysler in 1998 exemplifies both the
strategic benefits and challenges of M&As. The merger capitalized on product line
complementarity and global market access but faced significant cultural
differences between the organizations.
- Cultural Challenges: Differences in organizational cultures (e.g., lean vs.

bureaucratic) impacted integration efforts, affecting operational areas like logistics,
finance, and human resources.
- Operational Issues: Challenges included managing diverse human resource

practices, compensation disparities, and union contracts, highlighting the
importance of cultural alignment in integration success.
Lesson 43
Organization Transformation
Key Features of Revolutionary Change Efforts:
- Change Triggered by Environmental and Internal Disruptions
- Systemic and Revolutionary Change
- Demands a New Organizing Paradigm
- Driven by Senior Executives and Line Management
- Involves Continuous Learning and Change
Causes of Organization Transformation:
- Responding to Major Environmental or Technological Changes
- Anticipating Future Shifts in Business Strategy
- Modifying Corporate Culture and Internal Structures
Characteristics of Transformational Change:

- Radical Alterations in Organizational Perceptions, Thinking, and Behavior
- Beyond Incremental Improvements
- Focus on Fundamental Organizational Assumptions
- Requires Shifts in Corporate Philosophy and Values
Triggers for Transformational Change:
1. Industry Discontinuities: Shifts in legal, political, economic, and technological

conditions affecting competition.
2. Product Life Cycle Shifts: Changes requiring new business strategies.
3. Internal Company Dynamics: Changes in size, strategy, executive leadership,

etc.
Transformational Change Characteristics:
Transformational change reshapes an organization fundamentally, addressing its

culture and design elements comprehensively. It is systemic and revolutionary,
driven by senior executives to bypass political obstacles and organizational inertia.
This approach integrates changes across various organizational features
simultaneously, such as structure, information systems, HR practices, and work
design, which are interdependent and require coordinated transformation to align
with new cultural values.
Organizational Paradigm Shift:
The shift from a control-based to a commitment-based organizing paradigm

emerged in response to technological advancements, quality concerns, and the
need for greater worker participation. This new paradigm advocates leaner, more
flexible structures, decentralized decision-making pushed down to lower levels,
and accountable teams and business units focused on specific products, services, or
customers. It emphasizes participative management and teamwork, adapting well
to dynamic and changing conditions.
Role of Senior Executives:
Senior executives play a crucial role in driving transformational change. They are
responsible for strategically initiating, defining, and overseeing the implementation
of change. This leadership role involves articulating a clear vision for the
organization's future direction, setting ambitious performance standards, and
fostering organizational pride and enthusiasm. In some cases, external executives
are recruited for their talent and energy to lead these transformations, highlighting
the critical importance of strong executive leadership in achieving successful
organizational change.
Vision Development in Organizational Change:
Vision is crucial in organizational and cultural change as it embodies the essence

of leadership. A clear vision articulates a realistic, credible, and attractive future
for the organization, inspiring and empowering people at all levels. Key stages in
developing a shared vision include:
1. Sharing the Vision: Communicating a clear and challenging vision that

resonates with individuals and enhances their sense of purpose within the
organization.

2. Empowering Individuals: Involving people in defining the vision and ensuring

their individual goals align with organizational objectives.
3. Developing Trust: Establishing goals for high performance while allowing

individuals to contribute to and provide feedback on the vision.
4. Rewarding Performance: Recognizing high performers and supporting risk-

taking, freedom to fail, and decentralized decision-making to foster innovation and
commitment.
Execution and Leadership in Change:
Effective leadership during change involves:
1. Energizing: Demonstrating personal enthusiasm for change and modeling

expected behaviors. Communicating early successes to build momentum.
2. Enabling: Providing necessary resources for change, using rewards to reinforce

new behaviors, and building a capable top-management team to support
organizational transitions.
Continuous Learning and Change:
Transformational change necessitates continuous innovation and learning

throughout the organization. This involves:

- Learning Process: Continuous learning to adopt new behaviors aligned with

strategic directions. This process includes trying new approaches, evaluating
outcomes, and adjusting behaviors as needed.
- Unlearning and Adaptation: Members must unlearn old behaviors and adopt
new values and norms to support the vision. Learning occurs at all levels, adapting
to a dynamic environment and ensuring organizational agility.
- Persistent Adaptation: Transformational change is ongoing, adapting as long as

the organization needs to respond to environmental changes. Managing change
continuously builds organizational capacity to evolve and thrive.
Types of Interventions:
Three key interventions for managing change effectively include:
1. Culture Change: Shifting organizational norms and values to support new

strategic directions.
2. Self-Design: Empowering teams and individuals to innovate and create

solutions that support organizational goals.

3. Organization Learning and Knowledge Management: Continuously learning

and adapting organizational knowledge and practices to fit evolving environmental
demands.
This structured approach highlights the importance of vision, leadership,

continuous learning, and adaptive interventions in managing successful
organizational change.
Understanding Organizational Culture:
Organizational culture encompasses the shared basic assumptions, values, norms,

and artifacts that guide members' behaviors and interactions within the
organization. These cultural elements provide a framework for understanding how
work is conducted, evaluated, and how relationships are managed with
stakeholders like customers, suppliers, and government agencies.
Levels of Organizational Culture:
Organizational culture operates at different levels of awareness:
1. Artifacts: Observable aspects such as physical spaces, behaviors, and rituals

that reflect deeper cultural norms.
2. Norms: Explicit rules and expectations governing behavior within the

organization.

3. Values: Beliefs about what is important and deserving of attention within the
organization, shaping member priorities and decisions.
4. Basic Assumptions: Implicit beliefs about how things should be done, deeply
embedded in the organization's identity and guiding principles.
Case Example - The Action Company:
The Action Company exemplifies a high-technology manufacturing firm with a

distinctive organizational culture. It values innovation, hard work, and rapid
problem-solving, fostering an environment of high energy and emotional
engagement among its employees. Key cultural elements include:
- Individual Autonomy: Empowering employees to take initiative and contribute

at maximum capacity.
- Customer and Employee Sensitivity: High responsiveness to changing needs

and relationships with stakeholders.
- Support and Open Communication: Encouraging new ideas and maintaining

open communication channels.
- Risk-Taking: Promoting a culture where innovation and risk-taking are valued

and encouraged.

Cultural Context and Diversity:
Applying Organizational Development (OD) practices in different cultural contexts

requires adapting to the cultural values and norms prevalent in each region.
Cultural values significantly influence organizational customs and practices related
to power dynamics, conflict resolution, ambiguity, time management, and
responses to change.
Key Cultural Values:
Researchers identify five key cultural values that impact organizational practices:
- Context Orientation: How information is communicated and valued within a

culture.
- Power Distance: The degree to which power is distributed unequally within the
organization.
- Uncertainty Avoidance: The extent to which members of a culture are

comfortable with ambiguity and uncertainty.
- Achievement Orientation: The emphasis placed on achievement and success.
- Individualism: The degree to which individuals prioritize personal goals over

group interests.

High-Context vs. Low-Context Cultures:
Cultures vary in their context orientation, with high-context cultures emphasizing

implicit communication through social cues and rituals, and low-context cultures
relying more on explicit verbal communication and written guidelines.
Cultural Dimensions in Organizational Context:
Understanding cultural dimensions is crucial for effective organizational

management. Here are key insights into how different cultural values influence
organizational practices:
Power Distance:
Power distance refers to how individuals in a culture view authority, status

differences, and influence patterns:
- High Power Distance Cultures: Found in regions like Latin America and
Eastern Europe, these cultures favor unequal distribution of power and influence.
They accept autocratic decision-making and hierarchical structures with significant
supervisory levels. Subordinates often perceive themselves as lower in social status
and expect close supervision.
- Low Power Distance Cultures: Found in places like Scandinavia, these cultures
prefer participative decision-making and egalitarian practices. They emphasize
reducing hierarchical gaps and avoiding special privileges for authority figures.

Uncertainty Avoidance:
Uncertainty avoidance reflects a society's tolerance for ambiguity and preference

for stability:
- High Uncertainty Avoidance Cultures: Common in Asia, these cultures prefer

stable routines, resist change, and uphold strict adherence to rules. They prioritize
maintaining the status quo and are averse to ambiguity and risk.
- Low Uncertainty Avoidance Cultures: Found in many European countries,

these cultures are more comfortable with ambiguity and change. They favor
organic organizational structures, fewer rules, and encourage more participative
decision-making and risk-taking.
Achievement Orientation:
Achievement orientation pertains to a culture's emphasis on acquiring power,

wealth, and success:
- High Achievement Orientation Cultures: Found in Asia and Latin America,

these cultures highly value career advancement, individual initiative, and
competitive success. Organizations set ambitious goals and thrive on high levels of
stress and conflict.

- Low Achievement Orientation Cultures: Seen in Scandinavian countries, these

cultures prioritize social aspects of work, such as working conditions and
opportunities for personal growth. They place less emphasis on aggressive goal-
setting and competitive success.
Individualism:
Individualism measures the extent to which individuals prioritize personal goals

over group goals:
- High Individualism Cultures: Evident in countries like the United States and
Canada, these cultures emphasize personal initiative, competitiveness, and
autonomy. Organizations encourage individual decision-making and
empowerment, often leading to higher turnover rates.
- Low Individualism Cultures: Found in countries such as Taiwan, Japan, and

Peru, these cultures prioritize group cohesion and loyalty to the organization.
Cooperation among employees and collective decision-making are valued,
supporting long-term commitment to the company.

Lesson 44
Understanding Organizational Culture and Change
In the study of organizational development (OD), various approaches are used to

diagnose and understand organizational culture. Each approach offers unique
insights into how culture influences organizational behavior and how it can be
managed to support strategic change.
Behavioral Approach:
The behavioral approach focuses on observable behaviors within an organization.

It emphasizes how tasks are performed and relationships managed to achieve
business results. For instance, interviews with managers in an international
banking division revealed implicit norms governing relationships (companywide,
boss-subordinate, peer, interdepartmental) and managerial tasks (innovating,
decision-making, communicating, organizing, monitoring, appraising/rewarding).
This approach helps diagnose cultural risks when implementing new strategies,
identifying where existing behaviors may conflict with desired changes.
Competing Values Approach:
This approach assesses organizational culture through competing value dilemmas.

It examines two key value pairs:

- Internal focus and integration Vs. external focus and differentiation:

Balancing internal operations with external competitive pressures.
- Flexibility and discretion Vs. stability and control: Managing innovation and
adaptability against stability and consistency.
Organizational cultures are categorized into four quadrants based on where their
values lie along these dimensions: clan culture, adhocracy culture, hierarchical
culture, and market culture. Each quadrant represents different organizational
priorities and approaches to managing these conflicting values.
Deep Assumptions Approach:
The deep assumptions approach delves into the underlying, unexamined

assumptions that guide organizational behavior. These assumptions are often tacit
and shared among members, influencing organizational effectiveness deeply.
Diagnosing culture at this level requires:
- Observation of behavioral examples: Routines, stories, rituals, and language

reveal cultural norms.
- Identification of discrepancies: Recognizing differences between espoused

values and actual behaviors.
- Understanding subcultures: Acknowledging that large organizations may have

diverse subcultures with differing assumptions.
Techniques for assessing deep assumptions include iterative interviewing

processes involving both insiders and outsiders, as well as culture workshops that

engage diverse groups within the organization to uncover underlying cultural

elements.
Application Stages:
Changing organizational culture is challenging due to deeply rooted values and

assumptions. Critics argue that altering cultural assumptions is particularly difficult
because members may resist change, viewing culture as a defense mechanism
against uncertainty and a source of competitive advantage. Strategies to manage
cultural risks include modifying strategies to align with existing culture or
managing around cultural barriers rather than attempting direct cultural change.
Despite these challenges, large-scale cultural change may be necessary under

certain conditions, such as adapting to a changing environment, competitive
pressures, or organizational growth. Organizations facing such situations must
carefully consider whether cultural change is feasible and complement it with other
adaptive strategies.
Practical Guidelines for Cultural Change
Changing corporate culture is a complex endeavor that requires strategic planning

and commitment at all levels of the organization. Here are practical guidelines for
successfully navigating cultural change:
1. Formulate a Clear Strategic Vision:

Cultural change should begin with a clear strategic vision that outlines the
organization's new direction and the values needed to support it. This vision serves
as a benchmark against which existing culture can be evaluated. For example,
Johnson & Johnson's "Our Credo" articulates core values such as responsibility to
stakeholders and environmental stewardship, guiding the organization's cultural
norms.
2. Display Top-Management Commitment:
Successful cultural change must be championed by senior management. Leaders

should visibly endorse and advocate for new values and behaviors. For instance,
Jack Welch of General Electric (GE) promoted cost-cutting, productivity
improvement, and customer focus throughout his tenure, aligning the entire
organization behind these goals.
3. Model Culture Change at the Highest Levels:
Senior executives must embody the desired cultural changes through their actions
and decisions. Their behavior sets the tone for the organization and reinforces the
importance of new values. An example is Jim Treybig of Tandem, who
demonstrated compassion and understanding by investigating the reasons behind
an employee's poor performance before taking action.
4. Modify the Organization to Support Change:
Cultural change often necessitates adjustments in organizational structure, human

resources systems, and management practices. These modifications align behaviors
with the new culture, emphasizing performance in line with strategic goals. For
instance, Boeing made significant organizational changes to emphasize financial
performance and accountability.
5. Select and Socialize Newcomers, Terminate Deviants:
Changing organizational membership can effectively shift culture. New hires

should align with the desired culture, while those resistant to change may need to
be replaced. Leaders like Gould and Jan Carlzon of Scandinavian Airlines replaced
senior executives to ensure alignment with new strategies and cultural values.
6. Develop Ethical and Legal Sensitivity:
Cultural change can create ethical and legal challenges when values promoting
integrity and fairness are not upheld. Organizations must ensure that promised
values are supported by actual behaviors and practices. This includes providing
mechanisms for dissent and diversity, and educating managers on ethical
implications of cultural change.
Self-Designing Organizations:
Researchers advocate for self-designing organizations capable of adapting to

changing environments through ongoing design activities involving all
organizational levels. This approach helps translate corporate values into specific
structures and behaviors that fit the organization's unique context, promoting
continuous adjustment to meet evolving conditions.
Demands of Transformational Change:
Transformational change requires a systemic approach that integrates various

organizational features and adapts to ongoing uncertainty. It necessitates

organizational learning, stakeholder alignment, and involvement at multiple levels

to effectively implement new strategies and behaviors.
Successful cultural change requires a holistic approach that aligns strategic vision
with organizational values, demonstrates commitment from top management,
modifies organizational structures, selects and socializes new members, and
ensures ethical and legal integrity. These guidelines provide a roadmap for
organizations seeking to navigate the complexities of cultural change to enhance
performance and adaptability in dynamic environments.
Application Stages and Learning Organization
Self-Design Strategy: Application Stages
The self-design strategy provides a systematic approach for organizations to

transform themselves in alignment with their strategic goals. It emphasizes
ongoing adaptation and learning to maintain relevance in dynamic environments.
Here are the stages involved in the self-design strategy:
1. Laying the Foundation:
- Acquiring Knowledge: Organization members gain understanding of

organizational principles and self-design processes through workshops, readings,
and visits to other successful organizations.
- Valuing: Corporate values that will guide transformation are identified and
negotiated among stakeholders at all levels.

- Diagnosing: Current organizational features are assessed to identify gaps

between existing operations and desired performance outcomes.
2. Designing:
- Organizations generate initial designs and innovations that support corporate

strategy and values. This phase focuses on outlining broad parameters, with
specific details to be refined and adapted as implementation progresses (minimum
specification design).
3. Implementing and Assessing:
- Implementation of designed changes begins, accompanied by ongoing action

research to assess progress, identify challenges, and make necessary adjustments.
- Continuous feedback loops ensure that implementation issues feed back into the
designing, valuing, and diagnosing stages, facilitating iterative improvement.
Learning Organization
The concept of a learning organization complements the self-design strategy by

fostering continuous learning and adaptation within organizational systems. Key
aspects of a learning organization include:
- Core Values:
- Value Diversity: Different knowledge and learning styles are appreciated and
integrated.
- Encourage Communication: Open communication channels promote sharing

of diverse perspectives and ideas.
- Promote Creative Thinking: Innovation is encouraged through creative

problem-solving approaches.
- Nonjudgmental Atmosphere: Ideas are considered without bias, fostering an

environment conducive to experimentation and learning.
- Break Down Barriers: Traditional organizational barriers are minimized to

promote collaboration across different roles and levels.
- Develop Leadership: Leadership development is distributed throughout the

organization, recognizing that everyone has the potential to lead.
- Embrace Human Potential: Acknowledgment that every member possesses

untapped potential, contributing to the organization's growth and adaptability.
- Functionality:
- Learning organizations continuously test experiences and convert them into

actionable knowledge. This knowledge is then disseminated throughout the
organization to support decision-making and goal achievement.
- The focus is on creating "knowledge for action," ensuring that acquired

knowledge is directly applicable to organizational objectives.
- Instead of blaming external factors, learning organizations seek opportunities

and proactively adapt to changes in their environment.

- Learning organizations reduce hierarchical layers and promote self-directed

learning among all members.
- Boundaries within the organization are minimized to facilitate seamless

collaboration and knowledge sharing across departments and roles.
Characteristics and Levels of Learning in Organizations
Characteristics of a Learning Organization
Learning organizations possess distinct characteristics that enable them to adapt

and thrive in dynamic environments:
1. Constant Readiness:
- Learning organizations remain vigilant and responsive to changes in their

environment. They are proactive in identifying and seizing new opportunities
rather than reacting passively to external shifts.
2. Continuous Planning:
- Unlike traditional organizations with fixed plans devised by top executives,

learning organizations engage in continuous and flexible planning. Plans are not
static; instead, they are collaboratively developed, regularly reviewed, and adjusted
by all levels of the organization.

3. Improvised Implementation:
- Learning organizations encourage experimentation and improvisation rather

than rigidly adhering to predefined strategies. Implementation of solutions involves
coordination and collaboration across the organization, with successful innovations
becoming integrated into organizational practices.
4. Action Learning:
- Change in learning organizations is a continuous process rather than a periodic

event. Action is taken, results are evaluated, and adjustments are made iteratively.
This approach fosters ongoing adaptation and improvement.
Organization Learning Processes
Learning in organizations involves several interconnected processes that enable

continuous improvement and adaptation:
1. Discovery:
- Learning begins with the identification of errors or gaps between desired and
actual conditions. For instance, recognizing that sales are below projections
prompts the organization to investigate and address the underlying issues.
2. Invention:
- Solutions are devised to bridge the gap identified during discovery. This phase
includes diagnosing root causes and developing appropriate strategies or
interventions. For example, poor advertising may be identified as a cause of low

sales, leading to the creation of a new marketing campaign.
3. Production:
- Implemented solutions are put into action to address the identified issues. The
effectiveness of these solutions is monitored closely to assess their impact on
organizational performance.
4. Generalization:
- Insights gained from successful solutions are generalized to other relevant

situations within the organization. This involves drawing conclusions about what
works and applying that knowledge to similar challenges or contexts.
Levels of Learning
Learning in organizations can occur at different levels, each contributing to

organizational adaptability and growth:
- Single-loop Learning (Adaptive Learning):
- Focuses on correcting errors or reducing discrepancies between current and

desired states. It involves refining existing techniques and processes to improve
performance incrementally. This level of learning is akin to adjusting a thermostat
based on room temperature—it addresses immediate issues without fundamentally
altering underlying assumptions.

- Double-loop Learning (Generative Learning):
- Operates at a deeper level by challenging and revising underlying assumptions,

beliefs, and norms within the organization. It goes beyond addressing symptoms to
questioning the very frameworks and paradigms that shape organizational behavior
and decisions. This level of learning can lead to transformative changes in strategy,
structure, and culture.
Lesson 45
Seven Practices of Successful Organizations
Successful organizations often share common practices that contribute to their

sustained performance and competitive advantage. One of these fundamental
practices is employment security, which plays a pivotal role in shaping
organizational culture, fostering productivity, and enhancing overall performance.
Here an exploration of how employment security influences organizational
success:
1. Employment Security
Employment security refers to the assurance provided by organizations to their

employees that their jobs are stable and protected, barring extreme circumstances.
This practice has several implications and benefits:

- Stability and Commitment: Organizations that offer employment security build

trust and commitment among their workforce. Employees feel assured that their
contributions are valued and that the organization prioritizes their long-term well-
being over short-term financial fluctuations.
- Strategic Asset Retention: During economic downturns or strategic shifts,

organizations with employment security policies are less likely to resort to layoffs.
This retention of skilled and knowledgeable employees prevents the loss of critical
assets to competitors, who might capitalize on the sudden availability of talented
workers.
- Enhanced Productivity: Employees in organizations with employment security

tend to be more productive. They are motivated to contribute positively to
organizational goals because they see their jobs as secure and integral to the
company's success.
- Long-Term Perspective: Job security encourages employees to take a longer-

term perspective on their roles within the organization. They are more likely to
focus on building customer relationships, improving service quality, and
contributing to the organization's overall performance rather than just meeting
immediate targets.
- Support for High-Performance Practices: Employment security complements

other high-performance management practices such as selective hiring, extensive
training, information sharing, and delegation of authority. Organizations are more
inclined to invest in these practices when they expect a stable and committed
workforce that can maximize returns on these investments.

- Cultural Fit and Performance: While employment security is assured,

performance remains a critical factor. Employees must still perform effectively and
align with the organization's culture and values. Organizations like Lincoln Electric
maintain high standards and may have initial turnover as new hires adjust to their
culture.
- Strategic Advantage: Organizations that prioritize employment security can

become employers of choice, attracting top talent even during economic
downturns. This proactive approach reduces the need to compete for talent during
peak hiring periods when labor markets are tight.
Continuing from the exploration of successful organizational practices, let's

delve into the significance of selective hiring and self-managed teams as
critical elements of organizational design:
2. Selective Hiring
Successful organizations prioritize selective hiring as a foundational practice. This

approach ensures that they attract and retain the right talent aligned with their
strategic objectives and organizational culture. Here’s how selective hiring
contributes to organizational success:
- Large Applicant Pool: Organizations like Southwest Airlines actively cultivate a

large applicant pool. Despite the significant initial effort and expense, having a

vast pool allows them to select candidates who best fit their organizational needs
and values. For instance, Singapore Airlines and Southwest Airlines meticulously
shortlist candidates based on specific attributes crucial for customer service roles.
- Clarity in Hiring Criteria: Successful organizations are clear about the critical
skills and attributes required for each role. They move beyond vague notions of
hiring "good employees" to defining precise qualities essential for success within
their unique organizational context. This clarity guides the selection process,
ensuring alignment between candidate capabilities and job demands.
- Attributes Over Skills: While technical skills are important, successful

organizations often prioritize innate qualities such as teamwork, adaptability,
initiative, and cultural fit during hiring. These attributes are considered harder to
train and crucial for long-term success and performance within the organization.
- Long-Term Perspective: Selective hiring encourages a long-term perspective

among employees. Candidates who align with the organization's values and culture
are more likely to invest in their roles, contribute to organizational goals, and
remain committed during challenging times.
- Rigorous Selection Process: Organizations committed to selective hiring

implement rigorous selection processes. This includes multiple rounds of
interviews, assessments, and sometimes trial periods to ensure a thorough
evaluation of candidate fit and potential contribution.

- Continuous Improvement: Like any other organizational process, selective

hiring undergoes continuous improvement. Organizations gather feedback on
hiring decisions, assess performance outcomes, and refine their selection criteria
over time. This iterative approach enhances the effectiveness of the hiring process
and aligns it closely with organizational goals.
3. Self-Managed Teams and Decentralization
Self-managed teams represent a significant shift in organizational structure and

management philosophy. They empower employees with autonomy and decision-
making authority, fostering a culture of accountability and innovation:
- Peer-Based Control: Self-managed teams replace traditional hierarchical

supervision with peer-based control. This approach not only enhances
accountability but also encourages teamwork and mutual support among team
members. Organizations like Whole Foods implement this structure, where teams
have autonomy over hiring decisions and performance management.
- Creativity and Problem-Solving: Teams enable collaborative problem-solving

and creativity. By pooling diverse perspectives and skills, teams are better
equipped to generate innovative solutions to complex challenges. This
collaborative environment promotes continuous learning and improvement.
- Administrative Efficiency: Eliminating layers of management through self-

managed teams reduces administrative overhead and costs. Organizations such as
AES Corporation exemplify this by integrating various functional tasks within the
teams themselves, thereby optimizing resource utilization and decision-making

efficiency.
- Learning and Adaptation: Self-managed teams facilitate learning through

hands-on experience and shared responsibility. Mistakes become opportunities for
growth, and teams collectively evolve their processes based on continuous
feedback and learning.
- Strategic Advantage: Companies embracing self-managed teams often benefit

from increased agility and responsiveness to market changes. This decentralized
approach empowers frontline employees to make timely decisions aligned with
organizational goals, contributing to overall operational effectiveness.
4. High Compensation Contingent on Organizational Performance
High-performance organizations recognize the critical link between compensation

and organizational performance. Here’s how they effectively utilize contingent
compensation to enhance employee motivation, retention, and overall
organizational success:
- Attracting and Retaining Talent: Compensation levels communicate the value

an organization places on its workforce. Offering competitive pay contingent on
organizational performance helps attract and retain top talent. When John Whitney
took over Pathmark, a struggling grocery chain, he immediately addressed
underpaid store managers by significantly increasing their salaries. This move not
only boosted morale but also stabilized the workforce during a critical turnaround
period.
- Forms of Contingent Compensation: Successful organizations employ various

forms of contingent compensation such as gainsharing, stock ownership, pay for
skill, and team-based incentives. These mechanisms align employees' economic
interests with organizational goals, motivating them to contribute to improved
performance and efficiency.
- Ownership Mentality: Companies like Whole Foods encourage employee

ownership through stock options or profit-sharing programs. When employees
have a stake in the company’s success, they are more likely to think and act like
owners, driving innovation and commitment.
- Motivation and Effort: Contingent compensation motivates employees by

ensuring they share in the benefits of their efforts. At Whole Foods, for example,
team performance directly influences bonus payouts, reinforcing a collaborative
and results-oriented culture.
- Balancing Employment Security: Combining employment security with

contingent compensation mitigates risks associated with high turnover and
enhances employee commitment. Organizations that reward performance while
assuring job security foster a stable and motivated workforce.
5. Training
Training plays a pivotal role in high-performance management systems by

equipping employees with the skills and knowledge needed to excel in their roles.
Here’s why training is crucial and how successful organizations implement
effective training programs:
- Skill and Initiative: High-performance systems rely on frontline employees'

skills and initiative to identify and resolve issues, innovate processes, and ensure
quality. Training enhances these capabilities, empowering employees to contribute
meaningfully to organizational success.
- Strategic Advantage: Companies that prioritize training gain a competitive edge

by developing a skilled workforce capable of adapting to evolving market
demands. Japanese firms, for instance, emphasize training to support flexible
production systems and long-term employee retention.
- Cultural Fit and General Competence: Effective training programs go beyond

technical skills to cultivate organizational culture and generalist competence. Taco
Inc.’s extensive educational opportunities exemplify how investing in employee
development enhances attitude, performance, and overall organizational success.
- Continuous Improvement: Training programs evolve based on feedback and

performance metrics, ensuring alignment with organizational goals and industry
standards. Organizations committed to continuous improvement view training as a
strategic investment in their human capital.

6. Reduction of Status Differences
Successful organizations reduce status differences to foster inclusivity,

collaboration, and organizational effectiveness:
- Symbolic and Substantive Measures: Reducing status differences involves

symbolic gestures like uniform language and physical space, as well as substantive
actions like minimizing wage disparities across organizational levels. Subaru-
Isuzu’s practice of referring to all employees as Associates exemplifies symbolic
equality, fostering a sense of shared purpose and value.
- Open Communication: By reducing status differentials, organizations promote

open communication and information sharing, critical for learning and adaptation.
This inclusive approach encourages employees at all levels to contribute ideas and
insights, driving innovation and organizational agility.
- Aligning Economic Interests: Practices that reduce status differences often

complement contingent rewards based on group or organizational performance.
This alignment ensures that all employees share in the benefits of improved
organizational outcomes, reinforcing a collective commitment to success.
Sharing information:
- Importance: Information sharing is crucial for building trust, aligning employees

with organizational goals, and enabling informed decision-making.
- Trust and Alignment: Transparent sharing of financial performance, strategy,

and operational metrics fosters trust and ensures all employees feel valued and
included.
- Contribution: Informed employees are better equipped to contribute effectively

to organizational success by understanding how their actions impact performance.
- Open Book Management: Example of a CEO revitalizing a plant with "open

book management," emphasizing sharing daily performance metrics, widespread
dissemination of information, and training employees to interpret financial
statements.
- Philosophy: Encourages a participatory approach where employees take

ownership of their roles and contribute to collective goals through informed
decision-making.
Good luck


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Short notes by Mʀ Sɦǟɦɮǟʐ

MGTM628 – Organizational Development

Individual-Level Diagnosis in Organization Development focuses on

1. Organization Design: This includes the overall structure, technology,

2. Group Design: Refers to the characteristics of the larger group or department to

3. Personal Characteristics: These include age, education, experience, skills, and

1 Organization Development – MGMT 628 | Mʀ Sɦǟɦɮǟʐ

The model identifies five key dimensions of individual jobs:

3. Task Significance: The impact of the job on others or the organization.

4. Autonomy: The level of freedom and discretion employees have in scheduling

5. Feedback about Results: The clarity and directness of information employees

2 Organization Development – MGMT 628 | Mʀ Sɦǟɦɮǟʐ

Continuous monitoring and adjustment of job design are crucial to ensure

- Timing is crucial as it affects the readiness and receptiveness of organizational

- This dimension focuses on who is involved in the diagnosis process. It can

3. Confidentiality vs. Group Surfacing of Data:

3 Organization Development – MGMT 628 | Mʀ Sɦǟɦɮǟʐ

4. Pre-selection vs. Emergent Selection of Variables:

- Refers to whether diagnostic variables are predefined or emerge based on initial

5. Integration into Long-term Strategy:

- Diagnostic activities should ideally be integrated into a broader organizational

6. Organizational Planning and Avoidance of Whims:

7. Nature of the Target Population:

4 Organization Development – MGMT 628 | Mʀ Sɦǟɦɮǟʐ

These dimensions collectively emphasize the importance of strategic planning,

The importance of technique selection in collecting and analyzing diagnostic

Importance of Technique Selection in Data Collection and Analysis:

1. Type of Technique Used: Techniques such as questionnaires versus interviews,

3. Effectiveness of Diagnostic Techniques: For instance, assigning diagnostic

5 Organization Development – MGMT 628 | Mʀ Sɦǟɦɮǟʐ

4. Confidentiality Assurance: Techniques must address confidentiality concerns.

5. Alignment with Organizational Goals: The chosen techniques should align

6. Facilitating Participation: Techniques that facilitate participation, such as

7. Feedback and Iterative Improvement: The data collection technique should

The choice of data collection and analysis techniques in organizational

The Data-Collection Process

6 Organization Development – MGMT 628 | Mʀ Sɦǟɦɮǟʐ

1. Importance of Data Collection:

- Crucial step in Organization Development (OD) programs.

- Ensures actions are based on accurate knowledge, enhancing the program's

- First step involves clearly defining program objectives.

- Necessary for determining relevant information and selecting appropriate data

- Preliminary data gathering helps clarify initial problem conditions.

3. Selection of Key Factors:

- Identifying central variables (e.g., turnover, communication breakdown).

- Shift towards broader issues like organizational culture and values.

4. Selection of Data-Gathering Method:

- Choosing a method depends on the nature of the problem.

- Methods include questionnaires, interviews, observations, and unobtrusive

7 Organization Development – MGMT 628 | Mʀ Sɦǟɦɮǟʐ

- Each method has strengths (e.g., quantifiability, richness of data) and

Methods for Collecting Data:

- Advantages: Quantifiable responses, easy to summarize, suitable for large

- Potential Problems: Response biases, predetermined questions may miss

- Advantages: Rich data, adaptive, builds rapport.

- Potential Problems: Expensive, interviewer bias, self-report biases.

- Advantages: Real-time data on behavior, adaptive.

- Potential Problems: Observer biases, reliability issues, sampling

- Advantages: Non-reactive, high face validity, easily quantified.