This Document Contains Chapters 15 to 16 Chapter 15 Organization Transformation and Strategic Change Learning Objectives 1. Identify and define organization transformation in relation to the change process. 2. Understand the basic strategy-culture matrix and other approaches to changing the culture to fit the strategy. 3. Recognize the importance of corporate culture and its relation to strategy. 4. Experience these concepts in a management simulation. Student Premeeting Preparation 1. Read Chapter 15. 2. Prepare for OD Skills Simulation 15.1. Prior to class, form teams of six and select roles. Complete Step 1. 3. Read and analyze Case: The Space Electronics Corporation. Instructor Preparation and Materials 1. Simulations: no special materials are required. LECTURE OUTLINE 1) Learning objectives. (pg. 398) a) Identify and define organization transformation in relation to the change process. b) Understand the basic strategy-culture matrix and other approaches to changing the culture to fit the strategy. c) Recognize the importance of corporate culture and its relation to strategy. d) Experience these concepts in a management simulation. 2) Strategy and transformation. (pg. 398) a) The success of great companies begins to work against them when the “pride of position” starts to erode its base. b) Success can work against a company when it looses touch with its customers, corporate visions then become blurred, and a large corporate bureaucracy hinders employees from doing “productive work.” c) When organizations are in desperate need of change or else they will face bankruptcy/takeover, radical changes may be the only choice. d) Organizational transformation refers to drastic changes in how an organization functions and relates to its environment. 3) Organization transformation. (pg. 399) a) The difference between organization development (OD) and organization transformation (OT) is: i) OD strategies represent more gradual approaches to strategic change. ii) OT approaches are drastic, abrupt change to total structures, management processes, and corporate cultures; may or may not be developmental. b) OT tends to use directive approaches to change rather than participative. i) This is usually a top-down, top-management driven process. ii) It requires a clear, shared vision, a willingness to clean house, to reengineer and restructure, and the ability to tackle many problems at once. iii) Research suggests the political dynamics of OT tend to be shaped by the use of power rather than by collaborative, participative approaches. iv) Due to immediate threat, this may be the best way (or only way) to bring the organization back into fit with its environment. c) There are several possible large-scale change strategies. i) Large-scale change approaches are: (1) Incremental—Long-term planned change. (2) Transformational—immediate, drastic change. ii) Dunphy and Stace have identified a model of large-scale strategies based on three key dimensions. (see Figure 15.2, Strategies for Planned Organizational Change) (1) Time frame of change—short or long. (2) Level of support of the organizational culture. (3) Degree of discontinuity with the environment. iii) Four process change strategies: (1) Participative evolution - incremental; anticipates change; has support of culture through collaborative means. (2) Charismatic transformation - radical change in a short time with support of culture. (3) Forced evolution incremental - adjustments over longer period without support of culture. (4) Dictatorial transformation - used in times of crisis; major restructuring running counter to the internal culture. iv) OD change agents must select the most effective change process and strategy, rather than relying solely on a strategy that is compatible with their own personal values. v) Results of OT. (1) Large-scale change in times of crisis (OT) tends to be shaped more by directive methods rather than participative approaches. (2) OT may be best or only way to bring back an organization under immediate threat. (3) Outsiders such as externally recruited executives are more likely to initiate OT than the existing management team. (4) Research has shown OT is risky and its performance outcomes are uncertain. vi) The key point is that OD practitioners should select the most effective change process and strategy, rather than rely on a strategy simply because it is compatible with their personal values. 4) The corporate culture. (pg. 403) a) Culture includes shared values, beliefs, and behaviors formed by the members of an organization over time. i) CEO’s words alone do not produce culture; the actions of managers do. ii) A corporation’s culture is its major strength when it is consistent with its strategies. b) The strategy-culture fit. i) Strategy. (1) A course of action used to achieve major objectives. (2) Concerned with relating the resources of the organization to opportunities in the larger environment. (3) Increasingly necessary to change business strategy to meet emerging discontinuities in the environment. ii) Culture. (1) Provides a set of values for setting priorities on what is important. (2) A critical factor in the implementation of a new strategy. c) Core characteristics of culture. i) Refers to a system of shared values held by members that distinguishes one organization from another. ii) Core characteristics include: (1) Individual autonomy. (2) Sensitivity to the needs of customers and employees. (3) Support and assistance provided by managers. (4) Interest in having employees initiate new ideas. (5) Openness of available communication channels. (6) Members encouraged to be aggressive and risk-seeking. d) Sharing the vision. i) Vision is a mental image of a possible and desirable future state of the organization that articulates a view of a condition that is better in some important ways than what now exists. ii) Many management theorists feel that vision is the very essence of leadership; it involves several stages. (See Figure 15.3 Sharing the Vision) (1) Share the vision. (2) Empower the individual. (3) Develop trust. (4) Reward performance. e) Strong versus weak cultures. (See Figure 15.4 Relative Strength of Corporate Cultures) i) A strong culture is characterized by the organization’s basic values being both intensely held and widely shared. ii) A weak culture may be seen in a relatively young company or one that has a high turnover of executives and employees. iii) Culture is the product of key components: structure, systems, people, and style. f) The strategy-culture matrix: Four basic alternatives in determining strategy changes are: (See Figure 15.5 The Strategy-Culture Matrix) i) Manage the change (manageable risk) - quadrant 1. (1) Change important and compatible with culture. (2) Use cultural acceptance and reinforcement as strategies. ii) Reinforce the culture (negligible risk) - quadrant 2. (1) Change not as important and compatible with culture. (2) Forge vision that emphasizes shared values and reinforce existing culture. iii) Manage around the culture (manageable risk) - Quadrant 3. (1) Change important and incompatible with present culture. (2) Reinforce value system, reshuffle power to raise key people, and use leverage in the organization. iv) Change the strategy to fit the culture (unacceptable risk) - quadrant 4. (1) Change is important but incompatible with culture. (2) Changing the culture is explosive, long-term process that may be impossible. (3) Determine if strategic change is a viable alternative or if strategy should be modified to fit more closely with existing culture. 5) Strategic change management. (pg. 408) a) Noel Tichy proposed the strategic change management model, which seeks to align the organization’s strategy, structure, and human resource systems to fit with the organization’s environment. b) Organizations are composed of technical, political, and cultural systems in perpetual interaction with environmental change and uncertainty. (See Figure 15.6 Environmental Forces and Organizational Systems) i) Technical - solve production problems (mission, strategy, organization structure) ii) Political - solve allocation problems of resources and power (reward system, career succession, budgets, power structure) iii) Cultural - solve value/belief problems (shared values, objectives) c) Three steps to change: i) Develop image of desired organization. ii) Separate systems and intervene separately in each one. iii) Plan for reconnecting three systems. 6) Changing the corporate culture. (pg. 409) a) An effective corporate culture can result in superior performance, but an organization’s culture may also inhibit the organization from meeting competitive threats or adapting to changing conditions. b) Five reasons to justify large-scale cultural changes: i) When the company has strong values that do not fit the changing environment. ii) When the industry is very competitive and changes with lightning speed. iii) When the company is mediocre or worse. iv) When the firm is about to join the ranks of the very largest. v) When the firm is small but growing rapidly. c) Cultural change can be difficult and time consuming; major changes to the culture should be attempted only after less-difficult and less-costly solutions have been ruled out. OD Applications Transformation at Home Depot (p. 400) SUMMARY Though Home Depot is the number-one home-improvement retail chain in the United States, the company outgrew its initial business model and began to encounter problems by the late 1990s and that continued through much of the next decade. MAJOR POINTS • For more than 22 years Home Depot had an unstructured and entrepreneurial culture. • Stores were encouraged to be independent and headquarters was called the store support center. • But by the late 1990s competitor Lowe’s began taking market share and Home Depot’s sales growth declined • The board of directors brought in Bob Nardelli as CEO, formerly of General Electric, to turn around a dysfunctional culture. • Nardelli quickly began installing managerial practices that he had seen work at GE. • He instituted centralizing purchasing, cleaned up stores, required stores to submit performance data to headquarters, and lowered employee costs • The strategy worked in the short term; but without lower level support for the changes, there were unintended consequences. • Nardelli’s attempt at transformation created a culture of revolution, not evolution. • By 2005 Home Depot was struggling though Nardelli’s pay was at $30 million. • In 2007 the board asked Nardelli to renegotiate his pay but instead he quit and collected $210 million as a severance payout. • Nardelli was replaced by Marvin Ellison who has been making a methodical and long-range approach to change. QUESTIONS 1. Evaluate the positive and negative changes that Nardelli made at Home Depot. Answer: Nardelli made some prudent and sound changes including centralized purchasing, cleaning up stores, standardized hiring and evaluation practices, and measuring store and manager performance. But it appears that he made mistakes in the implementation, especially in light of Home Depot’s long-held practice of stores being independently operated. His change of lowering employee costs by replacing experienced salespeople with less experienced and lower cost employees had long term consequences of reducing customer satisfaction. 2. To get a sense of the current customer and employee dissatisfaction of Home Depot, enter “I hate Home Depot” or similar words into Google. Observe the dates of the postings to see if the postings have changed in frequency and degree of criticism. Answer: Searching for phrases like “I hate Home Depot” reveals a mix of recent and older posts reflecting customer and employee dissatisfaction. There has been a noticeable frequency of negative comments, with some criticism reflecting ongoing concerns about customer service and employee treatment. The volume and intensity of criticism appear to fluctuate, often spiking in response to specific incidents or changes within the company. For a detailed understanding, reviewing recent reviews and news articles would provide further insights. 3. Research Home Depot’s current performance and what the company is doing to bring change. Financial and other company information is available at www.homedepot.com/. Answer: As of the latest updates: • Financial Performance: Home Depot reported robust performance with strong revenues and profit margins, reflecting solid financial health. • Change Initiatives: The company is focusing on enhancing its digital capabilities, improving customer service, and investing in supply chain efficiency. Recent efforts include upgrading its online platform, expanding its product range, and implementing new technology to streamline operations. For the most current details, check Home Depot’s latest annual or quarterly reports on their website. Review Questions 1. Compare and contrast organization development and organization transformation. How are they similar or dissimilar? Answer: Organization development is planned strategy to bring about change. Organization transformation is drastic, abrupt change to total structures that aim for survival in a competitive environment. The changes may or may not be developmental in nature. 1. Suppose you receive a new job offer. What cultural factors would you consider in making a decision? Answer: When evaluating a new job offer, consider these cultural factors: 1. Company Values: Ensure they align with your personal values and ethics. 2. Work Environment: Assess the overall atmosphere, including teamwork, communication style, and management approach. 3. Employee Engagement: Look for evidence of employee satisfaction and recognition. 4. Diversity and Inclusion: Check the company’s commitment to a diverse and inclusive workplace. 5. Work-Life Balance: Evaluate policies and practices related to flexibility and support for personal time. These factors help ensure a good cultural fit and long-term job satisfaction. 2. Suppose you receive a job offer. What cultural factors would you consider in making a decision? Answer: When considering a job offer, evaluate these cultural factors: 1. Company Values: Alignment with your personal values and ethics. 2. Work Environment: Atmosphere and team dynamics. 3. Leadership Style: Approachability and management practices. 4. Work-Life Balance: Flexibility and support for personal time. 5. Diversity and Inclusion: Commitment to a diverse and inclusive workplace. These factors help ensure a good fit and overall job satisfaction. 3. How does the culture affect an organization’s ability to change? Answer: Organizational culture can facilitate or inhibit change in the organization. The strategy-culture matrix helps managers develop strategies for implementing change. Four basic alternatives in determining changes are: (l) manage the change; (2) reinforce the culture; (3) manage around the culture; and (4) change the strategy to fit the culture (see Fig. 15.5). 4. Can you identify the characteristics that describe your organization’s culture? Or the culture of this class? Answer: To describe an organization's or class's culture, consider: 1. Values and Beliefs: Core principles and ethics that guide behavior. 2. Communication Style: How information is shared and discussed. 3. Leadership Approach: The style and effectiveness of leaders. 4. Team Dynamics: Collaboration, support, and conflict resolution. 5. Norms and Practices: Daily routines, rituals, and expectations. These characteristics help define the overall cultural environment. 5. Select an organization and critique how the president or its CEO has articulated a vision to its members? Answer: Organization: Microsoft CEO: Satya Nadella Critique: Satya Nadella has effectively articulated Microsoft’s vision by focusing on "empowering every person and organization on the planet to achieve more." His approach emphasizes: 1. Inclusivity and Innovation: Promotes a culture of growth through diversity and cutting-edge technology. 2. Clear Messaging: Regularly communicates this vision through public speeches and internal communications. 3. Strategic Initiatives: Aligns company strategies and product development with the vision, such as investments in cloud computing and AI. Overall, Nadella’s articulation has rejuvenated Microsoft’s culture and direction, driving both employee engagement and market growth. 6. Find an article from Business Week, Fortune, the Wall Street Journal, or another publication that discusses an organization’s culture and identify the strength of the corporate culture using Figure 15.4 as a frame of reference. Answer: Article Source: Wall Street Journal Organization: Google Culture Strength: The article highlights Google’s culture as strong and innovative. Using Figure 15.4’s frame of reference: 1. Shared Values: Employees strongly align with Google’s values of innovation and inclusivity. 2. Norms and Practices: The company fosters creativity through open communication and flexible work environments. 3. Employee Engagement: High levels of engagement and satisfaction are evident, with strong internal support and recognition programs. Google’s culture is reinforced by its consistent practices and strong alignment with its core values, demonstrating high strength in cultural cohesion. KEY WORDS AND CONCEPTS Define and be able to use the following words and concepts: Culture - reflects organization’s past and is rooted in firm’s history and mythology. It influences how managers approach problems, react to competition, and implement new strategies. (pg. 404) Incremental approach - refers to long-term planned change that relies on collaboration and participation from organization members. (pg. 401) Organization transformation (OT) - drastic, abrupt change to total structures, management processes, and corporate cultures (such as mergers, takeovers, plant closures, and restructuring). (pg. 399) Strategic change management - this model focuses on an alignment between an organization’s strategy, structure and human resources systems and a fit between them and the environment. The organization is composed of three systems: technical, political, and cultural (see Figure 15.6). (pg. 408) Strategy - refers to a course of action used to achieve major objectives; concerned with relating the resources of the organization to opportunities in the larger environment. (pg. 403) Strategy-culture matrix - a model that can be used to assess the readiness of a corporate culture for strategic changes; provides four basic strategies for implementing change within a culture (see Figure 15.5). (pg. 406) Technical, political, and cultural systems - Organizational systems of the strategic change management model. (pg. 408) Transformational change - refers to immediate drastic change accomplished by directive methods. (pg. 401) Vision - a mental image of a possible and desirable future state of the organization. (pg. 405) ADDITIONAL RESOURCES Readings: Kotter, John “Leading Change,” Harvard Business Review, vol. 85, no. 1 (January 2007), p 99 Kouzes, James M. and Barry Z. Posner, “To Lead, Create a Shared Vision,” Harvard Business Review, vol. 87, no. 1, (January 2009), pp. 20-21 Maynard, Micheline, The End of Detroit: How the Big Three Lost Their Grip on the American Car Market (New York: Currency/Doubleday, 2003). Morrell, Margot, Shackleton’s Way: Leadership Lessons from the Great Antarctic Explorer (New York: Viking, 2001.) Leadership lessons from the 1914 Antarctic expedition of explorer Sir Ernest Shackleton and his 28-man crew. See the film description below of Shackleton’s Antarctic Adventure. Tichy, Noel M. and Andrew R. McGill (eds.), The Ethical Challenge: How to Lead with Unyielding Integrity (San Francisco: Jossey-Bass, 2003). Tichy, Noel M. with Nancy Cardwell, The Cycle of Leadership: How Great Leaders Teach Their Companies to Win (New York: Harper Business, 2002). Video: Shackleton’s Antarctic Adventure, 2001, NOVA/WGBH Boston (PBS), 40 minutes. Documentary that includes some of the original footage of the expedition. This is the story of Sir Ernest Shackleton’s legendary 1914-1916 expedition where the 28-man crew survived for two years trapped in the pack ice of Antarctica. Subjects include leadership skills, conflict, goals, team work, culture, norms, and loyalty to the mission and people. A good example of an organization that is facing survival against near impossible odds and the kind of change that is required for their survival. Not everything the expedition does is correct given the luxury of hindsight. Brings together a number of the concepts discussed in the textbook and allows for analyzing their application in a real organization. SIMULATION PROCEDURES Simulation 15.1 (pg. 411) The GenTech Company 1. Student premeeting preparation: a. Complete Step 1. Students form into groups of six and select roles. b. Students read the GenTech Company background, terminology, and strategy descriptions. c. On an individual basis, students record choices for strategies, allocate resources and record percentages. 2. Discussion points: a. Discuss parameters of team effectiveness: i. Determination of optimal strategy. ii. Completion of task in least amount of time. b. Determine risk level ratings for individuals, team, and ratings from other individuals. 3. Total time suggested: 90 minutes You will need to adjust these times to fit your specific schedule and class plans. Minutes Step 2 30 Step 3 10 Step 4 10 Step 5 15 Step 6 10 Step 7 15 Total 90 Notes CASE TEACHING NOTES The Space Electronics Corporation (pg. 417) 1. Problems A. Macro 1. Firm needs to decide whether to pursue new state-of-the-art prime contracts. 2. Wide differences in management’s view about pursuing the projects with little discussion. 3. Departments, such as R&D, are isolated from one another. B. Micro 1. None apparent. 2. Causes 1. Profitability has been declining, new contracts would boost firm. 2. Market share has been declining. 3. Systems affected 1. Structural – none apparent though if the contracts are obtained there will likely be reorganization. 2. Psychosocial – managers seem to be willing to disagree with one another but do not discuss or try to resolve issues. 3. Technical – indication that R&D is not well integrated with other areas of the company which can affect ability of company to respond to unfolding opportunities. 4. Managerial – except for engineering and marketing, the plan for going after the new contracts had not been discussed—even among affected departments. 5. Goals and values – risk-taking is not a value among managers but this is influenced by corporate management. In addition, there seems to be a lack of full discussion of different points of view. 4. Alternatives 1. Pursue prime contracts. 2. Try to remain profitable as subcontractor. 3. All of the departments jointly hold detailed discussions on the contracts that include feasibility, costs, rewards, etc. 4. If the contracts are not pursued, then management decides what are the other options for Space Electronics in the face of no other major projects coming up for the next few years. 5. Recommendations The executive committee holds detailed discussions on the contracts. In the meetings conduct comprehensive discussions including feasibility, costs, and rewards. Also, discuss other options if contracts are not pursued. In the face of declining future major projects, Space Electronics’ opportunities are diminished if they do not try to become the prime contractor. They may get small pieces of the contracts as a subcontractor but this is not assured and may not be enough to sustain Space Electronics. Without risk-taking the firm will not be able to grow. Without innovation and creativity, the firm will stagnate. STUDENT PREPARATIONS FOR THE NEXT CHAPTER 1. Read Chapter 16. 2. Complete the Profile Survey and Profile Form in Simulation 16.1, Part A, Step 1. 3. Complete Step 1 of OD Skills Simulation 16.2. Chapter 16 The Challenge and the Future for Organizations Learning Objectives 1. Understand the basic issues in using organization development as an approach to planned change. 2. Recognize ways of maintaining, internalizing, and stabilizing a change program. 3. Identify some of the future trends and problems facing the OD practitioner. 4. Understand the process of terminating the practitioner-client relationship. Student Premeeting Preparation 1. Read Chapter 16. 2. Complete the Profile Survey and Profile Form in Simulation 16.1, Part A, Step 1. 3. Complete Step 1 of OD Skills Simulation 16.2. Instructor Preparation and Materials 1. Simulations: You may want to reproduce The Bob Knowlton Case answer sheet for Simulation 16.2. It is located in the Simulation Procedures section. LECTURE OUTLINE 1) Learning objectives. (pg. 420) a) Understand the basic issues in using organization development as an approach to planned change. b) Recognize ways of maintaining, internalizing, and stabilizing a change program. c) Identify some of the future trends and problems facing the OD practitioner. d) Understand the process of terminating the practitioner-client relationship. 2) The organization of the future. (pg. 420) a) Leading companies envision an endlessly changing organization. b) Reconfigurable is a term that describes an organization that is flexible and able to change on an annual, monthly, weekly, daily, or even hourly time frame. c) People are achieving higher educational levels, with a resulting increase in the level of motivational needs. d) When OD is used in an organization, its results have to be measured. e) Criteria of effectiveness for OD practitioner: i) Stability of the OD effort after implementation. ii) Ability of client system to maintain innovation or the development of a self-renewal capacity. f) Because change is never ending, the completion of one change cycle leads to another. 3) Monitor and stabilize the OD program. (pg. 421) a) This chapter covers the fifth stage of an OD program: self-renewal, stabilize, evaluate, and disengage. (See Figure 16.1, Stage Five of Organization Development’s Five Stages) b) Stage 5 involves four factors. i) Feedback. ii) Stabilize and monitor the change. iii) Evaluate the OD program results. iv) Termination of the practitioner and client relationship. c) The feedback of information. i) Information is returned to participants. ii) Commitment to change is reinforced by feedback and support. iii) Program effectiveness is measured by the degree to which problems have been corrected. iv) The information that is fed back may be readily available data such as production and accounting figures. v) Data may also have to be obtained from interviews, questionnaires, “organization mirror,” and benchmarks to measure change over time. d) The stabilize and monitor change. i) There is acceptance and adoption of the change program. (1) It is important to guard against deterioration and “fade out.” (2) Reinforcement of the change is necessary and can occur with the following: (a) Participating employees and divisions see themselves as an elite group and sell the benefits; they become “disciples” of the change. (b) If the OD program is initiated in one division, the results are used to demonstrate the effectiveness to another division. (c) Practice and familiarity with the new methods help to reinforce the change and institutionalize it. ii) Continued assessment of change efforts during future periods helps to guard against degradation over time. e) Evaluate the OD program. i) Evaluations are important for three groups. (1) Decision makers. (2) OD participants. (3) OD practitioners. f) Termination of the practitioner and client relationship. i) Termination of the relationship is the final stage of the OD process. ii) Termination may occur when the basic change objectives are accomplished. iii) Either the practitioner or the client believes that little more can be accomplished or there is a diminishing rate of return for the efforts expended. iv) Disengagement will likely call for a gradual reduction of the practitioner’s help. v) Characteristics of disengagement (1) Both client and consultant mutually agree on reduced involvement. (2) Involvement does not drop to zero, but may continue at a low level. (3) The door is always open for further work. g) Self-renewal. i) Disengagement occurs when: (1) The benchmarks used to evaluate change have been achieved. (2) The client system seems capable of continuing self-renewal and innovation. ii) Self-renewal means building innovation and commitment to change into the organization’s values. iii) The OD program should have developed within the organization an ability to innovate constantly. iv) The self-renewing organization is constantly able to initiate new strategies leading to continued innovation. 4) Emerging issues and values. (pg. 424) a) OD is a growing, developing, and changing field of study. b) The field is still in transition, which makes it difficult to define what is or is not an OD intervention. c) Is OD a fad or discipline? i) OD has over 50 years of background history. ii) Rather than fad, OD appears to be a primary method for helping organizations adjust to accelerated change. iii) As a result, OD is not a fad, but an emerging discipline. iv) Too often managers use interventions as gimmicks or quick fixes rather than facing problems. v) OD is contributing a technology that will be required even more as the rate of change increases. vi) OD is changing like the world around us. (1) It has moved far beyond its historical roots. (2) It is continually adding new approaches and techniques as new problem areas emerge. d) The role of values. i) In the application of OD, practitioners face several complex dilemmas. e) Professionalism of OD. (1) Some question OD because it is ill-defined and lacks a common body of knowledge. (2) There is a lack of empirical evidence to provide scientific validity to some of the OD interventions. f) No certification of OD practitioners. g) OD has an overemphasis on human and social interventions. h) OD is less able to deal with conditions of distrust, power, and conflict. i) OD has limitations dealing with short-term, crises situations. 5) Future trends in organization development. (pg. 427) a) Future trends in OD. i) Organization transformation (OT). ii) Shared vision. iii) Innovation. iv) Trust. v) Empowerment. vi) Learning organization. vii) Reengineering. viii) Core competencies. ix) Organizational architecture. b) Macrosystem trends in OD. i) Impact of culture change. ii) Total resource utilization. iii) Centralization vs. decentralization. iv) Conflict resolution. v) Interorganization collaboration. c) Interpersonal trends in OD. i) Merging line and staff functions. ii) Resource linking. iii) Integrating quality and productivity. iv) Diversity. v) Networking. vi) Rewarding. d) Individual trends in OD. i) Intrinsic worth. ii) Change in individuals. iii) Effects of thinking. iv) Health and fitness. v) Interdependence. 6) The future of OD. (pg. 429) a) The course of change anticipated for OD will surround the issues of a changing workforce, global competence, and transformation within the organization. b) Organization development is an expanding and vital technology. c) There is a need for more empirical studies on OD interventions. d) There is a lack of ability for OD to deal effectively with external systems and power-coercive problems. e) When the controversies over approaches and techniques subside, and when the discipline becomes stagnant, then there will be an even deeper need to worry about the future of OD. OD Applications No Job Is Safe and Never Will Be (p. 429) SUMMARY The nature of work and what you will be doing in the future will change constantly. MAJOR POINTS • No career is safe and the career that you are preparing for today will likely not be the career you pursue for much of your life. • The shift in jobs to cheaper overseas labor markets that first began in manufacturing now includes software engineers, lawyers, CPAs, financial analysts, and medical specialists. • Most companies say about outsourcing, “We have to outsource in order to stay competitive.” • For organizations and individuals, being innovative and on the cutting-edge is a never-ending and always vigilant activity. • Career suggestions include: ○ Avoid jobs that can be broken down into repeatable steps. They are good candidates to either be replaced by computer software or sent to a lower-paid worker in a cheaper labor market. ○ Search for jobs that require flexibility, problem-solving, creativity, and a lifetime of learning. ○ Jobs likely to remain in-country include work that cannot be performed off the work site, such as repairing a complicated machine. ○ Factory workers who will most likely keep their jobs are those who excel in computer-controlled equipment or can quickly respond to one-of-a-kind orders. ○ Work that relies on complex communication skills will probably not be outsourced. ○ Jobs that require frequent interactions with other people, often face-to-face, will remain and flourish. ○ Employees with good people skills and employees who have experience with multicultural teams will have an advantage. ○ Get a college education and then keep going to college. QUESTIONS 1. What are you doing to become or remain competitive in the job market? Answer: To remain competitive in the job market, consider these strategies: 1. Continuous Learning: Stay updated with relevant skills and certifications. 2. Networking: Build and maintain professional connections in your industry. 3. Personal Branding: Develop a strong online presence and professional portfolio. 4. Career Development: Seek out mentorship and growth opportunities. 5. Adaptability: Be open to new roles and industries, adapting skills as needed. These actions help enhance your marketability and readiness for new opportunities. 2. Can you think of some other careers that are safe from being outsourced? Answer: Yes, certain careers are generally safer from being outsourced due to their unique requirements or localized nature. These include: 1. Healthcare Professionals: Doctors, nurses, and therapists require in-person patient interactions. 2. Skilled Tradespeople: Electricians, plumbers, and carpenters perform hands-on, location-specific work. 3. Creative Professionals: Artists, writers, and designers often produce work with a personal touch or cultural context. 4. Local Government Officials: Roles such as city planners or public service managers require local knowledge and presence. 5. Education Professionals: Teachers and school administrators engage directly with students and local communities. These careers typically involve tasks that are difficult to perform remotely or require a deep understanding of local context and human interaction. Review Questions 1. Identify some of the conditions for the success of an OD program. Answer: a. The organization is under pressure to improve and top management is supportive. b. Change begins at top of organization with the support and involvement of top management. c. Top management plays a direct role in the change program. d. Commitment to change, participation, and involvement is true of all levels of the organization. e. A gradual change occurs. Innovations are tested in one division before companywide introduction. f. Success reinforces change. 2. Is OD an emerging discipline or only a passing fad? Answer: OD is considered an emerging discipline. It has over 50 years of history. OD has also developed several new approaches to innovations for organizations. OD has been used to revitalize and renew companies through its approach to change. 3. Do you agree or disagree with the criticisms of OD? Answer: Individual answers will vary. Critics wonder if OD will adapt its own discipline to new challenges. Firms are facing more social distress because of the increased complexity of new technology. New OD methods will be needed in the future; these new methods should be more comprehensive. Additional techniques and empirical studies are needed. The fact that there are so many questions indicates a healthy discipline. If OD practitioners were complacent, the discipline would not be changing and then there would be a need for worry about OD and its future. KEY WORDS AND CONCEPTS Define and be able to use the following words and concepts: Fade-out - this may occur in an OD program when change is not stabilized into the system and behavior slips back into a previous mode. (p. 422) Feedback - required by those involved in an OD program in order that they may determine whether to modify, continue, or discontinue their activities. (p. 421) Individual trends - One of the future trends of OD. This trend focuses on the personal level. (p. 428) Interpersonal trends - One of the future trends of OD. This trend focuses on team and group dynamics. (p. 428) Macrosystem trends - One of the future trends of OD. This trend focuses on the organizational system. (p. 428) Reconfigurable - an organization that is flexible and able to change on an annual, monthly, weekly, daily, or even hourly time frame. (p. 420) Self-renewal - building innovation and commitment to change into the organization’s values. (p. 423) Stabilizing the changes - ensuring that the change program will continue. Preventing deterioration of the change efforts and reverting to previous behaviors. (p. 421) ADDITIONAL RESOURCES: Readings: Bradford, David L. and W. Warner Burke (Editors), Reinventing Organization Development: New Approaches to Change in Organizations, (San Francisco: Pfeiffer, 2005.) Christensen, Clayton M. and Michael E. Raynor, The Innovator’s Solution: Creating and Sustaining Successful Growth (Boston: Harvard Business School Press, 2003). Collins, James C., How the Mighty Fall : And Why some Companies Never Give In. (New York: HarperCollins Publishers, 2009). Collins, James C., Good To Great : Why Some Companies Make the Leap--And Others Don’t, (New York: Harper Business, 2001). Garlow, James L., 21 Irrefutable Laws of Leadership Tested By Time: Those Who Followed Them--And Those Who Didn’t (Nashville, Tenn.: Thomas Nelson Publishers, 2002). Gladwell, Malcolm, Outliers: The Story of Success, (New York: Little, Brown and Co., 2008.) Lencioni, Patrick, The Five Dysfunctions of a Team: A Leadership Fable, (San Francisco: Jossey-Bass, 2002). Maxwell, John C., The 21 Irrefutable Laws of Leadership: Follow Them and People Will Follow You, (Nashville, Tenn.: Thomas Nelson, 2007.) Rath, Tom, Strengths Based Leadership: Great Leaders, Teams, and Why People Follow (New York: Gallup Press, 2008.) Rath, Tom, StrengthsFinder 2.0: A New and Upgraded Edition of the Online Test from Gallup's Now, Discover Your Strengths, (New York: Gallup Press, 2007.) Video: The Target Shoots First, 2000, 70 minutes. Documentary. Directed, written, produced, and filmed by the lead character. A recent 22 year old college graduate goes to work at Columbia House and video tapes his work and experiences. He is a production manager for the mail order record business at Columbia. Subjects include learning the culture, norms, and psychological contracts. At the time this was written, this film was shown on the Sundance TV channel but not available. It may have since become available. This is a good film to lead off the semester. The film is also appropriate to be used in Chapters 1 and 3. SIMULATION PROCEDURES Simulation 16.1 (p. 432) OD Consultant Behavior Profile II 1. Students premeeting preparation: a. Students should complete Step 1 including the Profile Survey and the Profile Form (The Profile Form is in Chapter 2). b. Participants should compare the results in this simulation to results of Profile I, which was completed in Simulation 2.1. 2. Suggestions: a. Reiterate that participation in the simulation provides an opportunity for candid feedback and a chance to practice practitioner skills. 3. Discussion points: a. Developing skills in goal setting and changing behaviors. b. Developing skills in listening and using feedback. c. Exploring the consulting role in an ongoing situation. d. Increasing your self-renewal capability. e. Remind the class of the goals that were set and new skills that were developed. Review the progress made since the first Consultant Profile was completed. Students have hopefully developed a self-renewal capability. 4. Total time suggested: 45 to 60 minutes You will need to adjust these times to fit your specific schedule and class plans. Minutes Step 2 for each person 15 - 20 Total 45 - 60 Notes Simulation 16.2 (p. 437) The OD Practitioner 1. Student premeeting preparation: a. Complete Step 1. Read the Bob Knowlton Case and answer the seven questions at the end. 2. Instructor premeeting preparation: a. Reproduce the answer sheet for the Bob Knowlton Case. 3. Discussion points: a. This case can draw upon many of the concepts covered in the text. Have the class summarize their findings in the case. b. This review will be a good opportunity to bring closure to the class and discuss the next step in the students’ learning and career. 4. Total time suggested: 90 minutes You will need to adjust these times to fit your specific schedule and class plans. Minutes Step 2 30 Step 3 30 Step 4 30 Total 90 5. Answer Sheet The answer sheet to the Bob Knowlton case is on the following page. You may want to reproduce this page to give to the class. Notes Answers to the Bob Knowlton Case Question Answer 1 b 2 d 3 d 4 c 5 d 6 c 7 d Instructor Manual for An Experiential Approach to Organization Development Donald R. Brown 9780136106890
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