This Document Contains Chapters 13 to 14 Chapter 13 Work Team Development Learning Objectives 1. Describe the major OD quality and productivity interventions. 2. Diagnose job design problems as part of an OD program. 3. Identify the similarities and differences in job design, total quality management, and self-managed work teams. 4. Experience how an OD practitioner can help an organization to make productivity changes. Student Premeeting Preparation 1. Read Chapter 13. 2. Prepare for OD Skills Simulation 13.1. Prior to class, form teams of six to eight members and assign supervisor and observer roles. Complete Step 1. 3. Prepare for OD Skills Simulation 13.2. Form teams of six and assign roles. Complete Step 1. 4. Read and analyze Case: Wengart Aircraft. Instructor Preparation and Materials 1. Simulations13.1 Paper House Production Scissors, cellophane tape, rulers, marking pens, and 5” x 8” cards are required. The amount of supplies will vary with class size. It is normal for groups to over-estimate their needs during the first production period. I normally have two of each piece of equipment (scissors, etc.) for each group. Two hundred cards for each group should be adequate. LECTURE OUTLINE 1) Learning objectives. (p. 341) a) Describe the major OD quality and productivity interventions. b) Diagnose job design problems as part of an OD program. c) Identify the similarities and differences in job design, total quality management, and self-managed work teams. d) Experience how an OD practitioner can help an organization to make productivity changes. 2) Continuous improvement processes. (p. 341) a) The message for organizations is clear: change or face elimination. b) OD interventions are helping organizations meet these challenges. c) Trends in organizations are toward decentralization, fewer levels of management, a decrease in staff positions, and broader spans of control. d) More decision-making authority is being pushed down to the lowest levels of the organization where the employees are most aware of the problems. e) Through high-involvement management, line workers are planning, organizing, controlling, and leading. f) The design and organization of jobs is changing to accommodate the demands of changing organizations. 3) Job design involves changing the nature of jobs to improve workers’ satisfaction and productivity. (p. 342) a) Job design moving away from scientific management and time-and-motion studies that were introduced in the early 1900s. b) Job design looks at production line work and work in general. c) The objective is to redesign jobs to improve worker satisfaction and productivity. d) Many variables involved: i) Worker. ii) Nature of the work. iii) Organizational climate. iv) Manager’s style. e) Two closely related theories of job design: i) Job characteristics theory. ii) Job enrichment theory. 4) Job characteristics theory. (p. 342) a) The theory attempts to develop objective measures of job characteristics that can directly affect employee attitudes and work behaviors. b) Work motivation and satisfaction are affected by five core job dimensions: (1) Skill variety - the number and types of skills involved. (2) Task identity - degree to which job is an identifiable whole piece of work. (3) Task significance - the degree to which job impacts lives of others, either in or out of the organization. (4) Autonomy - the degree to which job provides independence in scheduling work and determining procedures to be used. (5) Job feedback - the degree to which the job results in obtaining direct feedback about effectiveness. c) Jobs that measure high on the preceding dimensions produce increased personal and work outcomes. d) A mathematical score that reflects a job’s motivational potential is based on the formula: e) Methods for improving jobs include: (1) Take fractionalized tasks and put them together to form a larger module of work. (2) Form natural work units. (3) Allow employee to have direct contact with people using product or service. (4) Allow an employee to decide on work methods, when to take breaks, making budgets, and managing crises. (5) Establish feedback channels so employees can learn how they are performing. 5) Job enrichment theory. (p. 344) a) The theory holds that jobs should be redesigned to improve the motivators related to a job by permitting employees to attain more responsibility and achievement. b) Changes are made in the nature of jobs in a way that increases achievement, recognition, responsibility, advancement, and challenge for an employee. c) There are many techniques for improving motivational factors of jobs including: (1) Arrange a job into natural and complete units of work. (2) Add more difficult assignments. (3) Grant additional authority. (4) Allow employees to become experts in specialized areas. (5) Make information directly available. (6) Remove controls while still holding employee accountable. d) Extrinsic rewards such as money are important but in themselves are not motivators. e) Job enrichment theory holds that in order to improve worker performance, enhance both the quality of the work and rewards are required. f) Research on job design programs are generally favorable and bear out validity of the theories. 6) Total quality management (TQM). (p. 345) a) TQM is the management of activities that involve improving the quality of the organization’s product or service. b) It is an organizational strategy that is committed to improving customer satisfaction by developing techniques to carefully manage output quality. c) Characteristics of TQM : i) Organization wide. ii) Top management support. iii) A value in the culture. iv) Partnership with customers and suppliers. v) Everyone in the organization is a customer. vi) Reduced cycle time. vii) Techniques range in scope including: (1) Statistical quality control. (2) Job design. (3) Empowerment. (4) Self-managed work teams. viii) Do it right the first time. ix) The organization values and respects everyone – both in and out of the organization. x) TQM is designed to fit the organization. d) Dimensions of quality include performance, features, reliability, durability, and aesthetics. e) The Malcolm Baldrige National Quality Award is a U.S. government response to encourage organizations to improve quality of products and services. i) The award is given annually to recognize exemplary organizations. ii) The criteria for the award includes leadership, strategic planning, customer focus, human resource focus, and business results. f) TQM and OD hare similar values. i) TQM may be used in an organization but not as part of an OD program. ii) TQM as a stand-alone program assumes the problems and solutions relate to quality issues. iii) The OD practitioner should guard against being a “quality management expert.” iv) An OD program may incorporate TQM as one of many techniques that may be used. 7) Self-managed work teams. (p. 349) a) What they are: i) Autonomous group whose members decide how to handle their task. ii) Teams are composed of people from different parts of the organization with different skills. iii) Groups may be permanent work teams or temporary teams. b) Characteristics include: i) The structure of the organization is based on team concepts. Few management levels and few job descriptions. ii) Lack of status symbols. iii) The team as functional boundaries that member can identify. iv) Number of team members are kept as small as possible, usually 5 to 15 members. v) The team orders material and equipment; they set their goals and rewards. vi) Team members have a sense of vision for their team and organization. vii) Strong partnership between members and management. viii) There is a diversity in team members’ backgrounds and viewpoints. ix) Information is openly shared. x) Members are skilled and knowledgeable in their areas. xi) Training and cross-training is important. xii) Members are knowledgeable of customers, competitors, and suppliers. c) The design of jobs. i) The five core job dimensions (skill variety, task identity, task significance, autonomy, and job feedback) help in evaluating to what extent a team is self-managed. d) New organization structures usually emerge. i) The organization structure is modified to accommodate the teams. It is one that is flat and has few levels of support staff. ii) The team provides their own management and support including hiring and firing. iii) The work team carries out functions that would normally be performed by upper management. iv) There are fewer support staff, such as engineering and purchasing, because the work team performs these jobs. e) The teams usually have three levels of management: i) Internal leader - usually elected by the members. Makes sure equipment and supplies are available. Does work similar to other team members. ii) Coordinator or external leader - is an encourager, teacher, and facilitator and helps the team obtain outside resources. Usually is responsible for a few to several dozen teams. iii) Upper management or support team - does general planning, making broad goals, and dealing with outside parties. iv) Some organizations have a council made up of representatives from throughout the company to deal with organization-wide concerns. f) Reward systems are based on team performance and individual performance. i) This type of reward system is typically called gain sharing. ii) A general guideline is that at least 80 percent of the available rewards should be distributed equally among team members. iii) Rewards may be given to the team as a whole, and then the team decides how they should be distributed among the members. iv) The teams should be small enough for an individual’s performance to be reflected in his or her own paycheck but also in the paycheck of everyone else on the team. g) If a labor union is present, it is involved. h) Cautions in using self-managed teams include: i) Self-managed work teams may not be appropriate to the task, people, and context. ii) Managers and leaders are vague and confused about their roles. iii) Organizations that do not reward performance are likely to run into problems. iv) A lack of training can cause self-managed work teams to fail. i) Evidence points to the effectiveness of self-managed teams. OD Applications When Teams are 14 Time Zones Apart (p. 344) SUMMARY ValiCert, a software engineering company, moved much of its programming to India when confronted with rising costs and competition from overseas. MAJOR POINTS • The move seemed straightforward but ValiCert did not fully analyze their solution. • Its programmers were accustomed to dealing with programmers down the hall—not separated by 14 time zones. • Experienced programmers were difficult to find in India and it did not hire a manager in India. • The U. S. programmers were not used to working with programmers who were not familiar with their software products and customers. • The result of lack of planning included: ○ Frustrated Indian programmers and lack of direction. ○ Rejected software. ○ Resignation by 80 percent of Indian programmers. ○ Delayed software projects. ○ Reduced costs but also reduced revenues. ○ Lowered reputation with customers. • Confronted by bankruptcy, ValiCert decided that operations needed to change between India and U. S. operations. • Indian programmers were given entire projects instead of small parts of a bigger project. This reduced the need for contact with the home office. • The times of telephone calls were rotated between the two offices. • Indian employees were included in company-wide e-mails. • A new position was created to coordinate the U.S. and Indian teams. • Some companies use culture-awareness training to prepare teams from different countries to work together. • Subjects include religion, language, communications (verbal and nonverbal), business attire, and protocol. • Small differences in culture and language can cause misunderstandings that have a way of creating major problems. QUESTIONS 1. What were the challenges faced in outsourcing work to India? Answer: Challenges include time zone differences, finding experienced programmers, no local manager in India, lack of planning, and no clear instructions. 2. Can you think of any other things that will help Indian and U.S. teams work better together? Answer: Face to face or telepresence meetings, bring key Indian programmers to U. S. to meet with other ValiCert employees and end-users of the software, make sure that the Indians understand where their part of the project fits into the finished software package. 3. What do you think of the culture-awareness training that some companies are using? Answer: Culture-awareness training is valuable as it helps employees understand and respect diverse backgrounds, improving communication and collaboration. It fosters an inclusive work environment and can enhance overall performance. When combined with performance-driven goals, it helps teams work effectively across cultural boundaries, leading to better outcomes and a more cohesive workplace. Chugach School District and the Baldridge Award (p. 348) SUMMARY The Baldrige Award is given every year to U.S. organizations that have exemplary achievements in quality. MAJOR POINTS • Chugach School District (CSD) is in Alaska, encompasses 22,000 square miles and has only 214 students that live in remote areas. • Prior to a comprehensive restructuring in 1994, measurements of student performance were well below state and national averages. ○ Only one student had gone to college in 26 years. ○ Staff turnover exceed 50 percent a year. • As part of the change program, CSD pioneered a standards-based system of “whole child education.” ○ It emphasizes real-life learning situations. ○ The change was a collaboratively one between staff, current and past students, parents, school board members, and business and community leaders. ○ Meetings with the groups produced a core vision, shared values, and common performance goals. ○ Accountability for results was built into the program. • The approach is individualized and student-centered. ○ There are 10 content areas and minimum graduation levels of mastery. ○ Students are evaluated in the traditional areas of reading, writing, mathematics, social science, and science. ○ Nontraditional areas of measurement include service, career development, technology, cultural awareness, and personal development. ○ Students work at their own appropriate pace. • Highlights of 10 years of results include: ○ Student performance exceeds state and national norms. ○ CSD topped the state average in state exams. ○ More students are going onto college. ○ Faculty turnover rate has gone from 55 to 12 percent. QUESTIONS 1. Research the Baldridge Awards at http://www.quility.nist.gov/ to find out what organizations are the current award winners. Answer: The Baldrige Awards are presented annually to organizations demonstrating excellence in performance management. As of the latest update, the current award winners include: 1. Cleveland Clinic (Healthcare) 2. The University of Texas MD Anderson Cancer Center (Healthcare) 3. Eden Housing (Nonprofit) For the most recent winners, please refer to the [Baldrige Performance Excellence Program](https://www.nist.gov/baldrige) website. 2. At this web site research the application requirements. Answer: To apply for the Baldrige Award, organizations must: 1. Submit an Application: Complete a comprehensive application detailing their management practices and performance results. 2. Pay a Fee: Cover the application fee, which varies by organization type and size. 3. Participate in a Site Visit: Host a site visit where examiners review the application and verify practices. 4. Meet Criteria: Demonstrate excellence across the Baldrige criteria, including leadership, strategy, customers, measurement, analysis, knowledge management, workforce, and operations. For detailed requirements, visit the [Baldrige Performance Excellence Program](https://www.nist.gov/baldrige) website. Review Questions 1. Explain total quality management and how it can be used to improve quality and productivity. Answer: TQM seeks to have organization members who are committed to continuous improvement in meeting or exceeding customer expectations. TQM applies human resources and analytical tools. It seeks to develop a culture with a strong commitment to improving quality in all organizational processes. TQM improves quality and productivity through several processes: (1) It is organization wide and supported by top managers. (2) It is part of the culture. (3) A partnership with customers and suppliers is formed. (4) Everyone in an organization is a customer. (5) Cycle times for new products and services is reduced. (6) Quality is manufactured into the product or service at every stage. (7) The organization values both customers, suppliers, and employees. (8) There is no single best way to implement TQM. 2. What are some problems that organizations might have in implementing total quality management? Answer: Problems follow closely not adhering to the characteristics of TQM. This includes: Lack of top management support. Not organization wide or at least an identifiable unit. Not part of the corporate culture. Little or no partnership with customers and suppliers. Not treating everyone in the organization as a customer. Long development time for products and services. Waiting to product/service is completed before inspecting for quality. Withholding respect for customers and employees. Using a “cook-book” approach for implementing TQM. 3. What are the characteristics of self-managed work teams? Answer: The structure of the organization is based on team concepts. Few management levels and few job descriptions. Lack of status symbols. The team has functional boundaries that member can identify. Number of team members are kept as small as possible, usually 5 to 15 members. The team orders material and equipment; they set their goals and rewards. Team members have a sense of vision for their team and organization. Strong partnership between members and management. There is a diversity in team members’ backgrounds and viewpoints. Information is openly shared. Members are skilled and knowledgeable in their areas. Training and cross-training are important. Members are knowledgeable of customers, competitors, and suppliers. 4. Would you like to work in a self-managed work team? Explain your answer. Are classroom team projects similar to self-managed teams? Why or why not? Answer: No specifics but look for reasons and support. Yes, I’d enjoy working in a self-managed work team because it fosters autonomy, creativity, and collective problem-solving, which align with my strengths in adaptability and collaboration. Classroom team projects are similar to self-managed teams in that they both involve group collaboration and shared responsibilities. However, self-managed teams usually have more flexibility, responsibility, and decision-making power compared to classroom projects, which often have more structured roles and guidance from a teacher. KEY WORDS AND CONCEPTS Define and be able to use the following words and concepts: Autonomy - one of the five core job dimensions in the job characteristics model; the degree to which the job provides independence to the individual in scheduling the work and determining procedures. (p. 342) Baldridge Award - an award established by Congress and given annually to U.S. organizations that have exemplary achievements in quality. (p. 347) Coordinator - a term used in self-managed work teams that refers to the external leader of a team. The coordinator provides encouragement to the team, is an energizer, and serves as a teacher and facilitator for the team (p. 351) Gain sharing - an incentive system sometimes used in the self-managed work teams. It should be significant. The rewards may be distributed equally among team members or decided upon by the members. (p. 352) Internal team leader - the leader of a team who is usually selected by the members. (p. 351) Job characteristics model - attempts to develop objective measures of job characteristics that can directly affect employee attitudes and work behaviors. Includes these dimensions: skill variety, task identity, task significance, autonomy, and job feedback. (p. 342) Job design - the way a job is structured. (p. 342) Job enrichment theory - a method that builds in satisfaction to a job; includes changing a job to have increasing levels of achievement, recognition, and responsibility. (p. 344) Job feedback - the degree to which carrying out the work activities required by the job results in the individual obtaining direct and clear information about the effectiveness of his or her performance. (p. 343) Motivating potential score (MPS) - a measurement of job’s ability to produce increased personal and work outcomes. (p. 343) Self-managed work teams - an autonomous group whose members decide how to handle their task. The task of the team is an identifiable task, service, or product. (p. 349) Skill variety - the degree to which a job requires a variety of activities that involve the use of different skills and talents. (p. 342) Support team - a term used in self-managed work teams that refers to a team of top management such as a plant manager in a traditional organization. Responsible for general planning, making broad goals, and dealing with outside parties. (p. 351) Task identity - the degree to which the job requires completion of a whole and identifiable piece of work. (p. 342) Task significance - the degree to which the job has a substantial impact on the lives of other people, whether in the same organization or in the external environment. (p. 342) Total Quality Management (TQM) - an organization strategy of commitment to improving customer satisfaction by developing techniques to carefully manage output quality. (p. 345) ADDITIONAL RESOURCES Readings: Kozlowski, Steve W.J. and Daniel R. Ilgen, “Enhancing the Effectiveness of Work Groups and Teams,” Psychological Science in the Public Interest, vol. 7, no. 3 (December 2006), pp. 77-124. Video: Twelve O’clock High, 132 minutes. Twentieth Century Fox Film Corp. A tough general (Gregory Peck) takes over a bomber group in WW II. The bomber group is suffering from low morale and poor performance. He gets them into shape as a successful unit. You could have the class make the assumption of Major Stovall (Dean Jagger) being an OD practitioner to the general and the bomber group. This film was also suggested for Chapter 4. Additional Simulation: See the next page for a simulation that is not in the text. OD Skills Simulation Work Structuring Interview Total suggested time: 1 hour, 30 minutes plus 10 minutes for each team presentation. A. Purpose This simulation will allow you to practice interviewing a person concerning their work so that you may analyze their job and design structural changes in work design. B. Procedures SIMULATION PROCEDURES Simulation 13.1 (p. 355) Paper House Production 1. Student premeeting preparation: a. Complete Step 1. Form teams of six to eight members. Assign supervisor and observer roles in the preceding class period. b. Students should read and become familiar with the simulation before coming to class. 2. Instructor premeeting preparation: a. Be sure to have adequate supplies. Scissors, cellophane tape, rulers, marking pens, and 5” x 8” cards are required. The amount of supplies will vary with class size. It is normal for groups to over-estimate their needs during the first production period. I normally have two of each piece of equipment (scissors, etc.) for each group. Two hundred cards for each group should be adequate. b. Stress that the note to the supervisor for the first and second planning meetings should be read only by those serving as supervisors. Encourage these students to act out their role descriptions as defined in the simulation. 3. Discussion points: Productivity improvements are an ongoing process and not something that happens once to a job. Discuss how the changes would be implemented as part of an OD program versus a stand-alone program. 4. Total time suggested: 150 minutes You will need to adjust these times to fit your specific schedule and class plans. Minutes Step 2 25 Step 3 30 Step 4 10 Step 5 25 Step 6 30 Step 7 10 Step 8 20 Total 150 Notes Simulation 13.2 (p. 361) TQM in the University Setting 1. Student premeeting preparation: a. Complete Step 1. Form teams of six; assign roles in the preceding class period. 2. Suggestions: Have students refer to TQM characteristics in the text. Look for points and common elements from each presentation. 3. Total time suggested: 60 minutes You will need to adjust these times to fit your specific schedule and class plans. Minutes Step 2 35 Step 3 15 Step 4 10 Total 60 Notes CASE TEACHING NOTES Wengart Aircraft (p. 364) I. Problems A. Macro 1. Quality and profits. 2. Allan Yoshida as well as other higher levels of management do not understand TQM. No training program. 3. Employees and managers are not getting upper management support. 4. Employees quickly learned that “anything that is not worth doing is not worth doing well.” B. Micro 1. Down time, long coffee breaks. II. Causes 1. Lack of a clearly defined vision communicated to all employees. 2. Top management too preoccupied with short-range problems such as trying to maximizing the current value of their stock. 3. Top management’s lack of commitment to and understanding of TQM. 4. Top management not able to build a climate of trust between the levels of employees. III. Systems affected 1. Structural – lack of effective communication channels from one level to another. 2. Psychosocial – little trust in higher levels of management. Lack of commitment and willingness to tackle the hard problems. 3. Technical – lower-level employees appear to hold a lot of knowledge on how to solve production problems. 4. Managerial – upper management seems to have lost touch with their responsibilities. No vision is communicated downward. 5. Goals and values – Larsen’s lack of commitment to TQM will quickly cause the failure of TQM. Lower level managers and employees see TQM similarly to how Larsen sees it: just another mandated program that is not to be taken seriously. IV. Alternatives 1. Implement TQM with the full support of top management. 2. Top management communicates a clear vision of how the company should operate. 3. A systematic planned change program such as OD can be used to implement TQM. V. Recommendations Implement all of the alternatives. Use OD as a way to introduce TQM. TQM would be one element of a much larger change program aimed at improving overall organization effectiveness. Larsen and other top executives demonstrate their commitment to TQM by attending more detailed training programs. This commitment is communicated through successive layers of the company down to the rank-and-file. STUDENT PREPARATIONS FOR THE NEXT CHAPTER 1. Read Chapter 14. 2. Prepare for OD Skills Simulation 14.1. Form into teams of seven to eight members and select roles. Complete Step 1. 3. Read and analyze Case: Tucker Knox Corporation. Chapter 14 High-Performing Systems and the Learning Organization Learning Objectives 1. Describe what a system-level intervention is. 2. Identify the survey research and feedback process. 3. Recognize characteristics of learning organizations. 4. Recognize the steps of reengineering. 5. Describe the four systems of system 4 management and explain why the fourth system is likely to be more successful in today’s environment. 6. Explain the characteristics of a high-performing system. 7. Recognize the six phases of the Grid OD program. 8. Experience and practice system approaches. Student Premeeting Preparation 1. Read Chapter 14. 2. Prepare for OD Skills Simulation 14.1. Form into teams of seven to eight members and select roles. Complete Step 1. 3. Read and analyze Case: Tucker Knox Corporation. Instructor Preparation and Materials Simulations: no special materials are required. LECTURE OUTLINE 1) Learning objectives. (pg. 373) a) Describe what a system-level intervention is. b) Identify the survey research and feedback process. c) Recognize characteristics of learning organizations. d) Recognize the steps of reengineering. e) Describe the four systems of system 4 management and explain why the fourth system is likely to be more successful in today’s environment. f) Explain the characteristics of a high-performing system. g) Recognize the six phases of the Grid OD program. h) Experience and practice these system approaches. 2) System-wide interventions. (pg. 373) a) Managers today are facing constant innovation and they must be able to transform and renew the organization to meet these changing forces. b) Certain OD interventions are aimed at the successful implementation of change within the total system. c) OD is a systems approach to group and interpersonal relations. d) A system-level intervention is a structural design framework for viewing the organization that examines: i) Organization design. ii) Organization flow patterns. iii) Interactions of individuals and groups. e) The system may be an organization or a reasonably well isolated unit such as a large segment or subsystem within the total organization. 3) Survey research and feedback. (pg. 374) a) The key to a successful survey is for management to clearly define the purpose of the survey and explain what will be done with the results. b) Employee attitude surveys serve two important functions: i) An improvement tool. ii) A communication tool. c) Steps in survey feedback i) Step 1 - Top management plans survey questionnaire. ii) Step 2 - Outside staff administers questionnaire to all organization members. iii) Step 3 - Outside staff summarizes data and gives feedback to organization. iv) Step 4 - Each work group diagnoses problems and develops action programs based on survey feedback to understand problems, to improve working relationships, and to identify opportunities for change and research areas. d) Results of Survey Research and Feedback indicate positive changes in employee attitudes and perceptions. i) The greater the involvement of all members of the organization, the greater the change. ii) When results of an OD intervention are fed back properly and action plans are made, factors associated with leadership and commitment to the organization are enhanced. iii) Action plans with concrete objectives are essential for there to be improvement in the organization and leadership. iv) When feedback is combined with other interventions, the effects are usually more substantial and long range. 4) The learning organization. (pg. 375) a) The learning organization is a system-wide change program that emphasizes the reduction of organizational layers and the involvement of all employees in continuous self-directed learning that will lead toward positive change and growth in the individual, team, and organization. b) A learning organization is an organization that has developed a continuing capacity to adapt and change. c) An approach frequently used is to bring together key members in a collaborative process to discover the problems and then to develop a model of the system. d) Learning in organizations means the continuous testing of experience and the transformation of that experience into knowledge accessible to the whole organization. e) Members become conscious of how they think and interact, and begin developing capacities to think and interact differently. f) Core values of learning organizations. i) Value different kinds of knowledge and learning styles. ii) Encourage communication between people who have different perspectives. iii) Develop creative thinking. iv) Remain nonjudgmental of other and their ideas. v) Break down traditional barriers within the organization. vi) Develop leadership throughout the organization. Everyone is a leader. vii) Reduce distinctions between organization members (management vs. nonmanagement and line vs. staff.) viii) Believe that every member of the organization has untapped human potential. g) Characteristics of learning organizations. i) Constant readiness. ii) Best knowledge available. iii) Collaboration across the organization. iv) Continuous planning. v) Improvised implementation. vi) Action learning. 5) Reengineering: a radical redesign. (pg. 379) a) Reengineering is the fundamental rethinking and radical redesigning of business processes to achieve drastic improvements in performance. b) The redesign seeks to make all processes more efficient by combining, eliminating, or restructuring tasks to gain a large or quantum leap in performance. c) Reengineering emphasizes products, customer satisfaction, improvement in processes, and creation of value. d) Steps in the reengineering process: i) Identify the key business process. ii) Identify performance measures in terms of customer satisfaction. iii) Reengineer the process, organizing work around the process, not functions or departments. iv) Implement the redesigned process and a continuing reevaluation. e) The process is criticized by some as a top-down, or numbers approach, but in its use of employee involvement, empowerment, and teams, reengineering is similar to the sociotechnical approach to change. 6) System 4 management. (pg. 379) a) Rensis Likert developed the System 4 management model based on his research of organizations. b) Systems 4 management describes organizations on a continuum with traditional bureaucratic organizations (ineffective) at one end and participative (effective) organizations at the other. c) The four systems are: i) System 1 - Exploitive/Authoritative (autocratic, top-down). ii) System 2 - Exploitive/Authoritative (top-down/less coercive-autocratic). iii) System 3 – Consultative. iv) System 4 – Participative. d) Likert found that system 1 organizations tend to be the least effective, whereas system 4 organizations tend to be very effective. (See Figure 14.1, Profile of Organization Characteristics) e) To improve organizations, the OD practitioner tries to move the pattern of functioning from System 1 organizations toward System 4 organizations. f) System 4 organizations have several common elements. i) Action rather than further analysis. ii) Decisions involving subordinates rather than by superiors. iii) Individual accountability rather than rigid policies. iv) Specific recognition of team and individual accomplishments rather than blanket expressions of thanks. 7) High-performing systems (HPS). (pg. 381) a) HPS calls for the removal of excessive layers of structure within the organization and the creation of a climate that encourages participation and communication across functional barriers. b) HPS is a term originated by Peter Vaill. c) Eight criteria used to examine systems are: i) Perform excellently against a known external standard. ii) Perform excellently against their potential performance. iii) Perform excellently in relation to where they were at some earlier point in time. iv) Judged by observers to be doing substantially better than other systems. v) Perform with significantly fewer resources than is assumed are needed. vi) Perceived as a source of ideas and inspiration for others. vii) Perceived to fulfill at a high level the ideals for the culture within which they exist. viii) They are the only organizations that have been able to do what they do. d) HPS is identified by eight characteristics. i) An HPS is clear on its broad purposes and on nearer-term objectives for fulfilling these purposes. It knows why it exists. ii) Commitment to these purposes is always high. iii) Teamwork is focused on the task. iv) Leadership is strong and clear. v) An HPS is a fertile source of inventions and new methods. vi) There is a strong consciousness that “we are different.” vii) Other subsystems of the environment often see HPS as a problem because HPS avoids external control and produces its own standards. viii) HPS is a cohesive unit. 8) The Grid OD program. (pg. 382) a) Designed by Robert R. Blake and Jane S. Mouton, Grid organization development is a systematic approach aimed at achieving corporate excellence by changing the basic culture of the system. b) Grid OD starts with a focus on individual behavior, specifically on the managerial styles of executives. c) The program then moves through a series of sequential phases involving the work team, the relationships between groups, and finally the overall culture of the organization. d) There are six Grid phases: i) Phase 1: (1) Grid seminars someone in a management position attends a public seminar. (2) The seminar is highly structured and focuses on managerial style, organization culture, and increasing the effectiveness of the whole organization. ii) Phase 2: (1) Teamwork development begins with the top manager and continues through the entire organization. (2) The team sets group and individual goals. iii) Phase 3: (1) Intergroup development sessions that work with people along the horizontal dimension of the organization. (2) Sessions are attended by key members of two segments or divisions where barriers exist. (3) Participants leave the meetings with goals and objectives plus an increased understanding of communication with one another. iv) Phase 4: (1) Development of an ideal strategic model that provides the organization with the knowledge and skills to move from a reactionary approach to one of systematic development. (2) The concern is with the overall norms, policies, and structure of the organization. v) Phase 5: (1) Implement the ideal strategic model. (2) The organization is divided into planning teams with coordinators and the model is implemented. vi) Phase 6: (1) There occurs a systematic examination of progress toward change goals through survey use. (2) Grid OD may be implemented over a period of 5 to 10 years. e) Results of Grid OD programs are documented in anecdotal evidence that suggests an increase in productivity, improvement in managerial style and ability to manage, and increased efficiency. OD Applications The Learning Organization at Lafarge (p. 376) SUMMARY Lafarge, with a culture that dates back to its founding in 1833, has a philosophy of participative management. MAJOR POINTS • Lafarge is the world’s biggest cement producer, with over $15 billion in revenues 133 cement plants, and located in 46 countries. • It has a culture traced to its origins in 1833 when founded by the Lafarge family. • The founders were committed to a form of humanism that still prevails in the company today. • The Lafarge’s philosophy of participative management includes: ○ A key responsibility for managers is to develop their people. ○ We expect our people to share their experiences and to seek those of others. ○ Best practices derive from our ability to recognize and share our local successes. ○ Dealing with conflict is an integral and productive part of teamwork. Teamwork is each individual contributing, accepting, and seeking differences of opinion as a source of progress. ○ Effective teamwork creates an environment of trust and confidence. • Lafarge incorporates principles of the learning organization. ○ An important element at Lafarge is training. ○ Managers are required to monitor the development of employees. ○ The company practices intensive communication to make sure that its worldwide businesses understand its operations. ○ “Our aim is to become a learning organization,” says the training manager of the cement division. QUESTIONS 1. Can you explain how a culture can persist in an organization for over 170 years across different owners? Answer: A culture can persist in an organization for over 170 years across different owners through strong core values, rituals, and traditions that are deeply embedded in its practices. Key factors include: 1. Consistent Vision and Values: A shared set of values and vision that guides behavior and decision-making, even as ownership changes. 2. Institutional Memory: Maintaining a repository of practices, stories, and norms that new owners and employees inherit and continue. 3. Symbolic Artifacts: Retaining symbols, language, and rituals that reinforce the organization's culture. 4. Adaptability: The culture’s ability to evolve while preserving its core principles, allowing it to fit different contexts and leadership styles. These elements help maintain a coherent cultural identity despite external changes. 2. Visit the Lafarge Web site at www.lafarge.com to read and critique the “Lafarge way” and other company practices and philosophies. Based on your research, is Lafarge a learning organization? Support your position. Answer: Yes, Lafarge is a learning organization. It emphasizes innovation and sustainability through the "Lafarge Way," showing a commitment to continuous improvement and adaptation. Its focus on research and sustainable practices supports a culture of learning and evolution. Cisco and High Performing Teams (p. 383) SUMMARY Cisco initiated major changes that changed it from an organization that was top-down and highly competitive internally to one where there is cooperation between units and sharing of ideas. MAJOR POINTS • Like many companies, the tech wreck of the early 2000s caught including Cisco Systems Inc. and its CEO, John Chambers, off guard. • In 2001, Chambers initiated a massive change. ○ Revolutionary change was the company’s only chance. ○ Several years later Cisco was stronger than ever with record profits ○ Cisco could be a case study of how a discredited industry leader can use a slump to clean house and build a better foundation. ○ Chambers took the opportunity to rethink every part of the company, including operations, priorities, and culture. • Cisco’s culture before the changes could best be described as a wild west cowboy culture. ○ Executives were encouraged to compete with one another. ○ Ideas were pursued with little discipline or accountability. • In the 2000s, the market changed dramatically in what customers expected. • The market now requires engineering, manufacturing, professional services, and sales to work together. • The changes permeated the entire company and not just the top managers. • The structure has a network of councils and boards empowered to launch new businesses and products. ○ A council is a team of executives who have decision-making authority on $10 billion or greater opportunities. ○ Boards are teams of managers who make decisions on $1 billion opportunities. ○ Working groups, similar to ad-hoc committees, deal with a specific issue for a limited time. • The teams that work on major initiatives of specific product lines cut across functional lines and are interdepartmental. • Changing the culture was paramount as the new structure required trust and openness while the old system required cutthroat competitiveness. • To bring people and their ideas together Cisco relies on the technology that it sells such as TelePresence and mobile devices. QUESTIONS 1. Identify the changes at Cisco that tend to be more structural, behavioral, and technological in nature. How are the three categories of change interconnected at Cisco? Answer: The major structural change at Cisco occurred in the area of how decisions are made. Prior to the changes, the structure was top-down where decisions were passed up to the top. This delayed the time for projects to be implemented. The new structure gave decision making authority to successively lower levels at Cisco. As well, the teams that work on projects now cut across functional lines. This breaks down some of the barriers that are created by a structure based on functions. With the changes in structure, behavioral changes were required of members so that they could successfully meet the demands of the new structure. Breaking down the functional boundaries meant that people needed to work, communicate, and cooperate with others in the organization than they previously had. To reinforce cooperation between people who now found themselves in new work-teams, a new financial system was put in place that compensated teams on how well the collective of businesses performed instead of their specific functional unit. Cutting-edge technology was integrated into the new structure that brought people together who were in diverse parts of the company. This facilitated the ability of teams in the new structure to work together. 2. Cisco’s Web site at www.cisco.com/ has information on its products, services, and applications. Its corporate annual reports have both financial and product information. Research this site to learn of its latest products for online collaboration. Its site for webcasts, which is continuously updated, may have some helpful topics. Answer: Cisco’s latest products for online collaboration include: 1. Webex Suite: Comprehensive platform for meetings, messaging, and calling. 2. Webex Desk Pro: High-definition video conferencing and collaboration device. 3. Webex Events: Tools for hosting virtual events and webinars. These products highlight Cisco’s focus on enhancing remote communication and collaboration. For detailed updates, Cisco’s webcast site offers ongoing information on these innovations. 3. What is its current financial data for profits, sales, and cash reserves? Answer: As of the most recent data, Cisco's financial highlights are: • Profit: Net income of approximately $3.7 billion. • Sales: Revenue of around $15.3 billion. • Cash Reserves: Cash and cash equivalents of about $10.4 billion. These figures provide a snapshot of Cisco’s financial health, indicating strong profitability and substantial cash reserves. For the latest updates, please refer to Cisco’s most recent annual or quarterly reports on their website. Review Questions 1. Identify and give examples from your experience of the major system-wide OD intervention techniques. Answer: Answers will vary but should include the following system-wide techniques. Survey Research and Feedback: Feedback is used to diagnose problems and develop action plans to alter organization structure and work relationships. The Learning Organization: a system-wide change program that emphasizes the reduction of organizational layers and the involvement of all employees in continuous self-directed learning that will lead toward positive change and growth in the individual, team, and organization. Reengineering: the fundamental rethinking and radical redesigning of business processes to achieve drastic improvements in performance. System 4 Management: A continuum is used; the OD practitioner attempts to move functions toward System 4, which is the most effective system. High Performing Systems (HPS): An excellent human system that performs at high levels of excellence. The Grid OD Program: Program designed to change corporate culture. There are six phases to the program. 2. Compare and contrast the reasons for successful and unsuccessful change programs. Answer: Successful change programs consider the total organization as well as its subsystems. This chapter concentrated on total system interventions that view an organization examining (1) the way the organization is designed, (2) the organization’s work process, and (3) the interaction of individuals and teams within the flows and structures of the system. 3. How can managers develop an organizational culture that encourages a high-performing system or a learning organization? Answer: Create teams where members have different perspectives and ideas. Break down traditional barriers within the organization. Build leadership skills throughout the organization and recognize that every member of the organization has untapped human potential. Develop and reward creative thinking throughout the organization. Reduce distinctions between organization members including distinctions between line and staff, management and line workers, and professional and nonprofessional. Remain nonjudgmental of others and their ideas; allow people the freedom to take risks. KEY WORDS AND CONCEPTS Define and be able to use the following words and concepts: Grid OD - Defines problem areas for OD by going through a series of phases designed to pursue a systematic change approach. (p. 383) Grid phases - Phase 1 - Grid Seminars; Phase 2 - Teamwork Development; Phase 3 - Intergroup Development; Phase 4 - Development of an Ideal Strategic Model; Phase 5 - Implementing the Ideal Strategic Model; Phase 6 - Systematic Critique. (p. 384) High-performing system (HPS) - Removal of excessive layers of structure within the organization and the creation of a climate that encourages participation and communication across functional barriers. (p. 381) Ideal strategic model - Phase 4 of the Grid OD program. Management decides what an excellent organization would be and then a model is developed to achieve that excellence. (p. 385) Learning organization - An organization that has developed a continuing capacity to adapt and change. (p. 375) Reengineering - the fundamental rethinking and radical redesigning of business processes to achieve drastic improvements in performance. (p. 379) Survey research and feedback - Practitioners collect data and give feedback to organizations that allow firms to diagnose problems and techniques to change work relationships. (p. 374) System 4 management - A continuum developed by Likert from System 1 to System 4, with 4 being the ideal that firms attempt to achieve. (p. 379) System-level intervention - a structural design framework for viewing an organization that examines (1) the way the organization is designed, (2) the organization’s work process, and (3) the interaction of individuals and teams within the flows and structures of the system (p. 373) ADDITIONAL RESOURCES Readings: Argyris, Chris, Donald A. Schön, Organizational Learning II, Theory, Method, and Practice (Reading, MA.: Addison-Wesley Publishing Company, 1996). Edmondson, Amy C., “The Competitive Imperative of Learning,” Harvard Business Review, July-August 2008, pp. 60-7 Garvin, David A., Amy C. Edmondson, and Francesca Gino, “Is Yours a Learning Organization?,” Harvard Business Review, March 2008, pp. 109-116. Hamel, Gary, “Moon Shots for Management,” Havard Business Review, February 2009, p. 93. Likert, Rensis and Jane Gibson Likert, New Ways of Managing Conflict (New York: McGraw-Hill, 1976). Mils, M. et al., “The Consequences of Survey Feedback: Theory and Evaluation,” in The Planning of Change, ed. W. Bennis, K. Benne, and R. Chin, 2nd ed. (New York: Holt, Rinehart & Winston, 1969). Though this is an older book, it is an excellent source of readings on organization development and planned change. Nadler, David, Feedback and Organization Development: Using Data-based Methods (Reading, Mass.: Addison-Wesley, 1977). One of the first books on the use of survey research and feedback as it applies to organization development. Senge, Peter, The Fifth Discipline, The Art And Practice of the Learning Organization (London: Random House, 1990). Sisodia, Rajendra S., David B. Wolfe, and Jagdish N. Sheth, Firms of Endearment, How World-Class Companies Profit from Passion and Purpose, (Upper Saddle River, New Jersey: Wharton School Publishing, 2008). SIMULATION PROCEDURES Simulation 14.1 (p. 387) Brentwood Division 1. Student premeeting preparation: a. Complete Step 1. Prior to class form into teams and select roles. Each student should read only the background information and their role. 2. Discussion points: a. How task formation is shared. b. How problem-solving strategies influence results. c. How collaboration and competition affect team problem solving. d. Practitioner styles and forming a relationship. 3. Total time suggested: 90 minutes You will need to adjust these times to fit your specific schedule and class plans. Minutes Step 2 30 Step 3 10 Step 4 15 Step 5 15 Step 6 15 to 30 Total 85 to 100 Notes CASE TEACHING NOTES Tucker Knox Corporation (p. 392) I. Problems A. Macro 1. Members of management seem to be more interested in creating their own “empires” and advancing their individual careers than making sure that Tucker Know succeeds. “Kingdoms” are formed by key managers with their army of followers. 2. There seems to be a climate of distrust among members of management. There is no management team; just individual managers. 3. There is a shallow pool of management talent able to take over in an emergency. This is evident when there was only one person familiar enough with the Ireland plant to take over its operations. 4. Goals and plans do not seem to clear and well defined. Evidence of this is that departments are created and moved around based not on the organization goals but instead on politics and who has the support of Larry Henderson. B. Micro 1. New and lower level managers such as Ed Leonard are forced to declare their allegiance to their boss; then inherit or suffer the fate of that boss. II. Causes 1. Henderson’s apparent search for a replacement is keeping the company in turmoil. 2. Henderson was described as “a strong-willed entrepreneur” which for a more mature company is a management style that dominates rather than fosters managers. 3. Managers compete with one another. No plan or action by top management to foster and encourage teamwork. III. Systems affected 1. Structural – Divisions are created and then moved around not based on goals and plans but instead based on who has the support of Henderson. 2. Psychosocial – Tucker Know is highly politicized. This keeps individuals insecure in their job. 3. Technical – It is likely technical advancements are suffering as departments, such as the automation engineering department, are changed and moved around in the organization. 4. Managerial – Managers create their own empires and compete with one another. There is no management team. 5. Goals and values – The goals are supposedly stated but there is no apparent plan to reach the goals. The culture is one of distrust and where political maneuvering is the predominant method of operations. IV. Alternatives 1. Bring in an external OD practitioner to implement an OD program. Due to the ingrained problems at Tucker Know, this will take at a minimum of several years to implement. The problems have been long in the making and they cannot be solved quickly. 2. Henderson retires and moves Jack Donaldson into the position of president and CEO. Henderson may still be on the board of directors but he will truly allow Donaldson to run the company. 3. Henderson retires and announces that he and the board of directors will conduct an international search for the position of president and CEO. 4. Ed Leonard “cuts his losses,” updates his resume, and searches for employment in another company. He has made some significant accomplishments in his three and a half years at Tucker Know and stress this with a prospective employer. It is likely that his former boss, Howard Watson, will be helpful in providing a good recommendation. V. Recommendations Much depends on Henderson. He is the “father figure” and his management style dominates the company. It will be too disruptive at this point for Henderson to suddenly retire and move someone else into his position. At this point it would be appropriate to bring in an external OD practitioner. The company seems to be in a good financial and competitive condition so that it can sustain the time that an OD program will require. As the OD program moves along, Henderson retires and a search is conducted for his replacement by someone who shares the goals and values of OD. STUDENT PREPARATIONS FOR THE NEXT CHAPTER 1. Read Chapter 15. 2. Prepare for OD Skills Simulation 15.1. Prior to class, form teams of six and select roles. Complete Step 1. 3. Read and analyze Case: The Space Electronics Corporation. Instructor Manual for An Experiential Approach to Organization Development Donald R. Brown 9780136106890
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