Week 7 Chapter 19, 20, 21
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Organization Development & Change
11 edition Thomas G. Cummings • Christopher G. Worley
CHAPTER
19
Transorganizational Change
©2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Learning Objectives
Explain the rationale and logic behind organization collaboration.
Describe and apply OD interventions that enable mergers and acquisitions.
Discuss and apply the OD process to strategic alliance formation and development.
Describe the process of network formation and transorganizational development as well as how networks change.
©2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Transorganizational Rationale
Transorganizational strategies allow organizations to perform tasks that are too costly and complicated for single organizations to perform
Goods and services are exchanged between organizations and transactions occur
Transorganizational strategies work best when transactions occur frequently and are well understood
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©2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Transorganizational Systems
Members maintain their separate organizational identities and goals
Tend to be underorganized and member organizations are loosely coupled
Different from mergers and acquisitions
Network interventions may be appropriate
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©2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Mergers and Acquisitions
Merger – the integration of two previously independent organizations into a completely new organization
Acquisition – the purchase of one organization by another for integration into the acquiring organization.
Distinct from transorganizational systems, such as alliances and networks, because at least one of the organizations ceases to exist.
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©2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Merger and Acquisition Rationale
Diversification
Vertical integration
Gaining access to global markets, technology, or other resources
Achieving operational efficiencies, improved innovation, or resource sharing
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Merger and Acquisition Application Stages (1)
Pre-combination Phase
Search for and select candidate
Create and M&A team
Establish the business case
Perform a due diligence assessment
Develop merger integration plans
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©2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Merger and Acquisition Application Stages (2)
Legal Combination Phase
The two organizations settle on the terms of the deal, gain approval from regulatory agencies and shareholders, and file appropriate legal documents
Operational Combination Phase
Implementing the operational, technical and cultural integration activities
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©2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Strategic Alliance Interventions
When two organizations formally agree to pursue a set of goals
There is sharing of resources, intellectual property, people, capital, technology, capabilities or physical assets
Common alliances are licensing agreements, franchises, long-term contracts, and joint ventures
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©2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Strategic Alliance Application Stages
Alliance Strategy Formulation
Clarify the business strategy and why an alliance is needed
Partner Selection
Leverage similarities and differences to create competitive advantage
Alliance Structuring and Start-up
Build and leverage trust in the relationship
Alliance Operation and Adjustment
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©2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Network Interventions
Involves three or more companies joined together for a common purpose
Each organization in the network has goals related to the network as well as those focused on self-interest
Characterized by two types of change: (1) creating the initial network (transorganizational development) and (2) managing change within an established network
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©2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Managing Network Change (1)
How a network was established influences the willingness and ability to change
Emergent properties or characteristics add complexity to change
Network behaviors and patterns can be expected and unexpected with complex interactions among members of the network
Knowledge of the “whole system” is required to implement change
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©2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Application Stages for Transorganizational Development
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Managing Network Change (2)
Create instability in the network
Manage the tipping point
The Law of the Few: Salespeople, Mavens, Connectors
Stickiness
The Power of Context
Rely on self-organization
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©2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Organization Development & Change
11 edition Thomas G. Cummings • Christopher G. Worley
CHAPTER
20
Organization Development for Economic, Ecological, and Social Outcomes
©2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Learning Objectives
Describe OD interventions that help organizations balance economic, social, and environmental objectives.
Describe sustainable management organizations (SMOs) and how OD can assist in their design and development.
Describe global social change organizations and how to adopt OD practices to develop them.
©2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Sustainable Management Organizations
Sustainable Management Organizations (SMOs) are designed to achieve sustainable effectiveness. They can perform in three areas—people, planet, and profit—and are agile enough to remain effective over time .
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©2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Strategies that Support
Sustainable Effectiveness
Breadth
Multiple countries, markets, technologies or products and services increase the complexity of a firm’s carbon footprint and social impact
Aggressiveness
In general, SMOs are wary of too much aggressiveness too often and have growth objectives that are reasonable and reasoned.
Differentiation
SMOs understand why customers make purchasing decisions and how the organization’s product and service features align with those choices.
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©2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Objectives that Support
Sustainable Effectiveness
Create positive economic outcomes while rejecting the goal of maximizing profit or shareholder returns.
Create positive ecological outcomes with awareness of carbon footprints and the planet’s ecology.
Create positive social outcomes that contribute to human and cultural well-being with a clear perspective on social values and issues.
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Components of Organization Identity
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Agile Organization Designs for SMOs (1)
Work processes
Core and exploitive
Creative and exploratory
Innovative
Structures
External focus on external environments
“Boundary Spanning”
Maximum surface area
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Agile Organization Designs for SMOs (2)
Management Processes
Flexible decision-making, processes that leverage information from external sources
Transparency; information is moved throughout the organization wherever it is needed
Decision-making is timely and relevant to keep pace with changing environments
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©2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Agile Organization Designs for SMO’s
Human Resource Systems
Multiple types of employment arrangements, individuality of employees and development of skills
Alignment of financial and non-financial reward systems the support the triple-bottom-line
Rewards motivate and reinforce change
Development and reward systems support the shared leadership philosophy
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SMO Application Stages (1)
Identifying and Redefining Organization Identity
Identify the organization’s values-in-use, brand promise and reputation support agility
Leverage those that support sustained effectiveness
Repurposing the Board of Directors
Membership reflects important stakeholders and may establish committees for sustainable objectives.
Integrate social and ecological goals with economic objectives of traditional shareholder value perspective
Develop effective decision-making skills in order to balance tough choices between sustainability actions and financial performance
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©2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
SMO Application Stages (2)
Building Capabilities
Identify existing capabilities and determine which new abilities are necessary
Develop multi-stakeholder decision making
Create a change capability –
Members develop change management skills
Design an organization effectiveness function with competencies in strategic planning, organization design, and change management
“Learning by doing”
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SMO Application Stages (3)
Sequencing the Changes
Work systems redesign
Align future goals with current behaviors
Clarifying the Strategy
Gain key stakeholder support for the new vision, mission and values
Building an agile design
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©2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Global Social Change Organizations
Global Social Change Organizations (GSCOs) are not-for-profit and nongovernmental entities that are created at the grassroots level to help communities and societies address complex and important problems such as unemployment, race relations, homelessness, hunger, disease, water quality, and political instability.
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©2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Characteristics of GSCOs
Commitment to creating environmentally and socially sustainable world futures
Innovative social-organizational structures that enable cooperation across previously polarized or constrained boundaries
Values of empowerment and people-centered forms of action
Linked globally and locally in structure, membership or partnership
Multiorganizational partnerships to form new hybrids of business, government and volunteerism
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©2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
GSCOs Application Stages
Building the Local Organization
Values to create vision
Recognizing conflict
Problem of success
Creating Horizontal Linkages
Networks of local organizations with similar views and objective
Developing Vertical Linkages
Upward communication and influence to governmental and policy-level decision-making processes.
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©2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Organization Development & Change
11 edition Thomas G. Cummings • Christopher G. Worley
CHAPTER
21
Future Directions in Organization Development
©2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Learning Objectives
Explore OD’s current state and several trends in its larger context.
Explore several implications for how OD will be practiced in the future
©2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Current State of Organization Development (1)
OD continues use of long-standing interventions widely accepted as best practice
Team Building
Process consultation
Survey feedback
Work design
Leadership development
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©2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Current State of Organization Development (2)
OD practice continues to be based on development of organizations that value human potential, trust, and collaboration
OD is experiencing rapid, expansive growth in interventions that help organizations facing complex and rapidly changing environments; e.g. change management
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Current State of Organization Development (3)
OD knowledge and practice base are constantly refreshed with active research
Researchers at universities and applied research center’s test the efficacy of different OD interventions
Action research activities
Evidence-based management practices
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Economic Trends in the Context of OD
Globalization
Concern for social and ecological consequences
Increased concentration of income and wealth
Climate change and global warming threats
Geopolitical instability and geostrategic risks
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©2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Technological Trends in the Context of OD
Consequences of technology
Cyberattacks on business and political systems
Diminished human capabilities
Assumed positive relationship with productivity
Changes in work skills and design
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Organizational Trends in the
Context of OD
Organizations face motivational choices
Individualism, capitalistic
Collective, community
Sustainability vs profitability
Organizations face structural choices
Small, Networked and Agile
Large, Centralized and controlling
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Implications for OD’s Future
“Stick to its Knitting”
Continue supporting the fundamental human and social process issues within the organization
Make pertinent changes in practices and objectives to align with emerging trends
Focus on helping organizations gain the capability to change and develop themselves
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©2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
OD and Change Management
OD change management interventions are developmental
Building organizational capabilities to be self-regulating, problem solving, and adaptable to its environment
Supporting organization learning to helping organizations and members change and improve themselves.
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Toward More Integrated OD Practices
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Toward Responsible Progress
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Toward More Inclusive Values
OD’s values will become more inclusive and include economic, social and ecological objectives.
Broader sets of criteria for defining OD and assessing organization effectiveness
More comprehensive guidelines for OD interventions
Multiple viewpoints, values and beliefs are heard and nurtured over time
OD would create new interventions based on more inclusive values
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