PADM511:

Lesson Overview

In this week, we will study some of the important theories of planned change, which describe the activities necessary to modify strategies, structures, and processes to increase an organization’s effectiveness. For example, the action research model focuses on planned change as a cyclical process involving joint activities between organization members and OD practitioners. Planned change theories can be integrated into a general model. Four sets of activities—entering and contracting, diagnosing, planning and implementing, and evaluating and institutionalizing—can be used to describe how change is accomplished in organizations. The general model has broad applicability to planned change. It identifies the steps an organization typically moves through to implement change and specifies the OD activities needed to effect change.

We will also examine the role of the organization development practitioner. This term applies to three sets of people: individuals specializing in OD as a profession, people from related fields who have gained some competence in OD, and managers having the OD skills necessary to change and develop their organizations or departments. You are probably the third kind. The professional OD role can apply to internal consultants who belong to the organization undergoing change, to external consultants who are members of universities and consulting firms or are self-employed, and to members of internal–external consulting teams. Values have played a key role in OD and traditional values promoting trust, collaboration, and openness have been supplemented recently with concerns for improving organizational effectiveness and productivity. As a profession, OD always has shown a concern for the ethical conduct of its practitioners, and several ethical codes for OD practice have been developed by various professional associations.

Lesson Objectives

After completing this lesson, you should be able to do the following:

• Describe and compare three major perspectives on changing organizations.
• Introduce a general model of planned change that will be used to organize the material presented in the book.
• Describe how planned change can be adopted to fit different kinds of conditions.
• Understand the essential character of OD practitioners.
• Understand the necessary competencies required of an effective OD practitioner.
• Understand the roles and ethical conflicts that face OD practitioners.

Lesson Readings & Activities

By the end of this lesson, make sure you have completed the readings and activities found in the Lesson 2 Course Schedule.

Overview of the Reading – What Should You Pay Attention to?

Let me start by pointing out what you should pay attention to when you read the textbook.  

1. Theories of Planned Change: The first two models (Lewin’s change model and action research model) are classic, traditional approaches to OD. The third perspective (the positive model) represents the latest thinking about planned change and updates the classic perspectives. You should thoroughly understand the similarities and differences between them.
   
   A little bit background: The first two models are proposed by Kurt Lewin, who is the founder of the academic disciplines such as social psychology and organizational change. If you still remember in P ADM 510 Organizational Behavior, when we studied personality, I introduced you to Lewin’s dynamic theory of personality. Lewin is a very influential figure in modern social sciences and trained many students who were also quite influential. For example, Leon Festingner, a student of Lewin’s, proposed the theory of cognitive dissonance, which we also discussed in P ADM 510. My Ph.D. supervisor is a student of Alex Bavelas, who contributed significantly to the field of organizational communication (who also wrote that famous case on Bob Knowlton that we studied in P ADM 510), who is also a student of Lewin’s. In this sense, I am a Lewinian researcher.
    
2. General Model of Planned Change: This is an important model. It will help you organize the upcoming material in the book. The general model organizes and integrates the previous models into four sets of activities (entering and contracting, diagnosing, planning and implementing change, evaluating and institutionalizing change). These activities have broad applicability to planned change. The general model identifies the steps an organization moves through when implementing change and specifies the OD activities needed to effect change. 
    
3. Different Types of Planned Change: Although the general model of planned change suggests that OD is a straightforward process, most OD efforts do not proceed according to a neat timetable or preset sequence of events. The application of OD in a particular organization or situation requires adjustments in the process of planned change. This section suggests that three dimensions are particularly important (magnitude of change, degree of organization, domestic vs. international settings). How these dimensions can impact the process of planned change should be noted.
    
4. Critique of Planned Change: This is where you should think critically on the textbook knowledge. Critics suggest that current theories and models of planned change are (1) deficient in knowledge about how the stages of planned change differ across situations, (2) unable to capture the disorderly and dynamic qualities of change, and (3) need more searching for better understanding of the relationship between planned change and organizational performance and effectiveness. Still others express concern not with the planned change model, but with the qualifications and activities of OD practitioners. I ask you to think critically on more issues of the theories you have read that were not mentioned by the above three critics.
    
5. Who Is the Organization Development Practitioner? It is important, even at this early stage of the course, for you to recognize that OD practitioners are not just external consultants. Reflect on what you have read in the Lesson 1 Learning Reflections; most of your classmates have already filled a change agent role with their friends, family, coworkers, and so on. An OD practitioner is anyone who is helping a system change using the principles of OD, so in this sense, we are all OD practitioner.
    
6. Professional Values and Ethics: The values traditionally underlying OD interventions have been associated with humanistic psychology. You should reflect while reading this section on whether or not your own values are aligned with these traditional values. If not, where do your values stray from the traditional humanistic ones and what do you see as the change? Do you believe that you can be an instrument of change if your own values are more materialistic or achievement oriented? Why do you want to become agents of change?

Why Do Organizations Change?

This seems a self-explanatory and self-evident question. Let’s think about this question a little bit further. For example, under what environmental pressures were organizations propelled toward change? Why aren't all organizations affected equally by such pressures? How is equilibrium or a dynamic balance achieved between forces for stability and forces for change in an organization?

It is not an easy task to identify the variety of pressures of organizational change. The theoretical position of why change occurs can be based on either the economic perspective of organizational change or the organizational learning perspective.

• The economic perspective focuses on satisfying the shareholders of the organization and maintaining their investments, hence ensuring the organization's survival. Change is conducted to improve organizational performance in the form of better balance sheet results. If we reflect on the different images of change introduced in Lesson 1, this position is most aligned with the “management as control” images of change managers, that is, the director, navigator, and caretaker.
   
• The organizational learning perspective focuses on building the capabilities of an organization to give its members the ability to deal with change. This perspective recognizes the complexity of organizations and human systems which cannot be accurately represented through a single linear objective. This idea is most aligned with the “management as shaping” perspective illustrated by the coach, interpreter, and nurturer images of change managers.

Pressures for change can come from a variety of sources including the environment, the discovery of deviations from standards, new desires and visions of the future, or the fundamental nature of organizations themselves. Now let’s find out WHY organizations change through a discussion of external and internal pressure for change. The following two tables summarize these reasons:

Table 2.1. Environmental Pressures for Change

Environmental Pressures for Change

Pressure	Example	Description	Implications
Fashion pressures	Boeing Co.	Boeing underwent a number of structural and cultural changes based on what Jack Welch had done at GE.	Neo-institutionalism: mimetic isomorphism. An organization imitates companies that are considered to be successful.
Mandated pressures	Chevron Texaco	Chevron Texaco was sued for racial discrimination by employees. They changed company practices to ensure fair treatment of employees.	Neo-institutionalism: coercive isomorphism. An organization changes through either formally or informally mandated requirements.
Geopolitical pressures	3M	Once Europe became more unified and moved towards opening its borders, 3M’s presence in various European countries was no longer suitable.	This is when global changes (or crises) greatly impact an organization and change is necessary for survival.
Market decline pressures	AOL Time Warner	In the face of changing technology, AOL saw a decline in the demand for their Internet provision. They needed to implement strategic changes to survive.	When current markets that the organization operates in begin to decline, there is pressure to find newer, more viable markets.
Hyper- competition pressures	Gateway	Gateway faced fierce competition from Dell and HP, and changed the structure and image of the company.	The increasingly rapid pace of business affects the way organizations respond to their consumers and their competitors.
Reputation and credibility pressures	Walt Disney Company	Walt Disney faced serious criticism for the close ties between the directors and CEO and the lack of management experience. They changed structures and practices to rectify this situation.	In light of recent corporate governance scandals in organizations, the pressure to maintain a good reputation and high level of credibility has increased.

 

Table 2.2. Internal Organizational Pressures for Change

Internal Organizational Pressures for Change

Pressure	Examples	Description	Implications
Growth pressures	Microsoft	The systems and practices in place from Microsoft’s entrepreneurial roots were not able to be applied to the increased scale of operations as the company grew.	Existing systems and processes in a small organization may no longer be applicable when its size increases.
Integration and collaboration pressures	EDS	EDS had pioneered IT services but found that its own internal system was lacking. There was a lack of coordination and communication between the different business units.	The possibility of integrating parts of the organization and creating economies of scale can pressure change in organizations.
Identity pressures	Forte Hotel	Hotels under this banner were competing against each other and lacked a unified identity with Forte. The company was separated into four distinct market segments and organizational culture programs were put in place.	A common organizational identity and the unified commitment of staff in different areas of an organization can be difficult to manage and may encourage change.
New broom pressures	Sears	Arthur Martinez decided that the shocking sales record of the company would be rectified through changing products and markets, reengineering store operations, and creating a service culture.	New authority figures can herald a new era and often initiate significant internal changes in an organization.
Power and political pressures	Morgan Stanley	Post-merger at Morgan Stanley were political power plays for the CEO position.	Power relationships and politicking can change internal processes and decision making. This situation has significant flow-on effects within the organization.

Organizational Effectiveness: The Ultimate Goal for Change

Increasing organizational effectiveness is the ultimate goal for any organizational change (this is the answer to the previous section–why organizations change). 

Organizational effectiveness is different from efficiency. Efficiency focuses on the conversion of inputs to outputs (e.g., output: input ratios), while organizational effectiveness, based on some scholars, is the degree to which an organization realizes its multiple goals. In a way, efficiency is doing something right, while effectiveness is doing the right thing.

Goals and effectiveness are certainly related; however, effectiveness is more complicated than merely achieving goals. For most of organizational scholars, the term effectiveness is quite difficult to define and is used in a variety of ways. Whether an organization is effective or not may depend on who is asking the question. This fuzziness leads to a variety of ways of measuring whether or not an organization achieves effectiveness. If someone claims that an organization is effective, then you should be very critical on what measures he/she used to measure the effectiveness.

Figure 2.1. Measuring Organizational Effectiveness

In general, the following ways are used to measure whether an organization is effective:

1. Resource-Based Approach
   
   The resource-based approach evaluates the ability of the organization to obtain valued resources from the external environment. Thus, it looks at the input side of the transformation process. This approach is useful when other indicators of performance are difficult to obtain. Indicators of system resource effectiveness include dimensions such as bargaining position, ability to correctly interpret properties of the environment, maintenance of internal day-to-day activities, and the ability to respond to environmental changes. A shortcoming of this measurement is the overemphasis on acquisition of resources rather than on their utilization. Thus, most organizational scholars believe that while acquiring resources is necessary, this alone does not give us a comprehensive picture of organizational effectiveness.

2. Internal Process Approach
   
   The internal process approach evaluates effectiveness by examining internal organizational health and economic efficiency. Here, some scholars use efficiency as the indicator for effectiveness. And others use the evaluation of human resources as the indicator for effectiveness. Indicators of effectiveness include strong corporate culture, team spirit, trustful communication, decision making near sources of information, undistorted communication, managerial rewards for performance, and interaction between the organization and its parts. There are, in turn, two different ways to look at internal effectiveness.
   • Efficiency: An organization is effective to the extent that it maximizes outputs with respect to the costs of inputs and the costs of the transformation of those inputs into outputs.
   • Emotional or affective health: An effective organization is one where workers are happy and satisfied.

3. Goal Approach
   
   The goal approach defines effectiveness in terms of “if,” and “how well,” an organization accomplishes its goals. It measures effectiveness by evaluating the extent to which operative goals are achieved. For this to work, goals must be measurable. It is more productive to measure effectiveness using operative goals than using official goals which are more abstract and difficult to measure. The goal approach is used because output goals can be readily measured after issues of multiple goals and subjective indicators of goal attainment are resolved.
   
   Managing multiple and conflicting goals is necessary when different managers champion different goals, or when the focus of managers of different goals created the desire to serve different environmental demands. Therefore, effectiveness often cannot be assessed by a single indicator.
   
   One problem with this approach is, if the goals are ill-defined, complex, or inappropriate, the mere attainment of these goals does not guarantee effectiveness. A second problem is, if the goals do not represent the diverse interests of important stakeholders, the organization may find itself in trouble. Thirdly, many times the meeting of one goal means that a conflicting goal cannot be achieved.

4. Stakeholder Approach
   
   Performance from the stakeholders’ perspective is yet another way to assess effectiveness. According to this perspective, organizations are effective to the extent that key groups are minimally satisfied. That is, if all the stakeholders are satisfied with the organization, then it is effective. Because stakeholders have conflicts, this approach forces the difficult issue of whose claims are the most important, and most of time, it is indeed difficult to prioritize different stakeholders’ demands.

As can be seen, there is no clear-cut way to assess effectiveness. Each of the above approaches gives only a partial view. There is not one best approach to effectiveness; rather, we must determine why we want to measure effectiveness, the appropriate time frame, and then apply the proper model to the type of organization in question. Based on this understanding, two additional perspectives that try and synthesize some of the earlier approaches have been developed.

5. Contradictions Model
   
   This model argues that the idea of trying to characterize a whole organization as totally effective is problematic. Four central assumptions drive the model.
   • Organizations face complex environments that place multiple and conflicting demands and constraints on them. It may not be possible to meet all of these conditions.
   • Organizations have multiple conflicting goals. It is impossible to maximize achievement of all goals.
   • Organizations face multiple internal and external stakeholders, and it may be impossible to meet all of their conflicting demands.
   • Organizations must manage multiple and conflicting time demands. There may be a tradeoff between satisfying short-term and long-term demands.

This model does not suggest one best way of assessing effectiveness; rather, it makes us cognizant of these potential contradictions.

6. Competing Values Model
   
   The essential point of the competing values model is that no single measure of effectiveness is, by itself, satisfactory. This approach recognizes that managers may emphasize different indicators of performance and tries to balance a concern with various parts of the organization rather than focusing on one part. Two values can be used to categorize four approaches of effectiveness: Organizational focus is whether issues internal or external to the firm are valued. Organization structure is the emphasis on either flexibility or stability. The combination of these two dimensions yields four distinct approaches.
   • Human Relations Model: Combines internal focus and flexible structure with management's primary goal being employee development.
   • Open Systems Model: Combines an external focus and flexible structure, with management's primary goals being resource acquisition and growth.
   • Internal Process Model: Reflects the values of internal focus and stability, with management's primary goal being to maintain the status quo.
   • Rational Goal Model: Focuses on stable structure and external environment with management's primary goals being productivity, efficiency, and profit.

Figure 2.2. Categories of Effectiveness

Learning Case Reminder

This week, we will continue to study the case "Building the Cuyahoga River Valley Organization" (Cummings & Worley, p. 764). This case is one of the integrative cases at the end of the text, but its primary purpose is to provide a real-world example of the role of an OD practitioner in transorganization development. You might also look at the future of OD, especially in regards to sustainability through this case.

This is a very complex case with complex issues, but I am sure with your real-world experience, your analysis will be mature and well thought out. If you do not have public administration experiences or are not familiar with government organizations, this case is also a good learning tool for you.

In your analysis, you should consider three sets of questions:

• What?

Identify the essential issues described in the case. Issues represent current or emerging problems faced by individuals and groups in the organization. Keep in mind there are many issues in any given case, but not all of them are equally important. Focusing on urgent and important issues will probably serve you well.

• Why?

What are the causes/factors producing the situation described in the case? What seems to be causing the key problems? Do the problems share a cause, or are they related in some other way? The linkages you make among causes/factors in the case are important. You may want to list, draw, or somehow represent the factors you see as important. You might find a visual representation helpful in capturing the core dynamics. The goal is to discern how and why the situation arose in the first place.

• How?

What course of action would you adopt if you were involved in this situation? Why? Your solution should address the underlying causes of the issues. How would you implement your suggested actions? What potential failure points do you need to anticipate? What is the downside of your solution? How would you monitor progress towards full implementation? You want to be as concrete and realistic as possible.

• And at the very end of your analysis, what are the contingency factors that might influence your analysis and recommendation?

Please note that there is no standard case analysis, which is unfortunately the reality of any “soft” social science. However, some responses are better than others, which is how I will grade the case summaries. "Better" in this case means more logical, more in-depth, more consistent internally, more critical, and more clearly written. In the grading, I will also take into consideration your comments on other students’ case analyses and how you respond to any questions, concerns, or comments made by other students on your case analysis. If you successfully finish these three tasks, you could get up to 10 points for this case.

Learning Quiz

Now, it is time to examine your understanding of the textbook readings. To help you keep current with the course content and to allow you to assess your knowledge of concepts being studied in the course, we designed this online quiz which is administered in a timed environment where you have only 10 minutes to do 10 test items (which can be multiple-choice questions, true/false judgments, or a mix of two types).

The deadline for quiz is the end of the assigned week (i.e., by Sunday midnight ET)).

Because the quiz is timed, once you start the quiz you must finish it. You are only given one chance to do it; thus, you cannot pause it and later come back to continue it. Don't worry—this quiz will not count toward your final grade, but will be used by yourself and the instructor to understand your learning progress.

Learning Reflections

Please reflect on what you have learned over the past two lessons, then write a reflection post of about 500 words. You can reflect on any aspect of this week’s readings. Your reflection can also cover what you have learned from the supplementary journal articles. Please post your reflection in this Discussion, then read all of the reflections made by your peers to see and compare their reflections with yours. If you successfully finish this task, you will receive 10 points.

Your learning reflection must be posted by the end of the bi-lesson period (i.e., by Sunday midnight ET at the end of the 2nd lesson in the period). However, if you post your reflection at Sunday midnight, it is practically  impossible for other students to read your learning reflections. Thus, I encourage you to post your reflection earlier to allow other students time to read your reflections and compare their reflections with yours. (If an extenuating situation arises, it is perfectly fine that you post your reflection by Sunday midnight to receive credit for the assignment.)

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