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Organization Development

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Organization Development ­ MGMT 628
Lesson 03
What an "ideal" effective, healthy organization would look like?
Numbers of writers and practitioners in the field have proposed definitions which, although they differ in
detail, indicate a strong consensus of what a healthy operating organization is.
An effective organization is one in which:
1. The total organization, the significant subparts, and individuals, manage their work against goals
and plans for achievement of these goals.
2. Form follows function (the problems, or task, or project, determines how the human resources are
3. Decisions are made by and near the sources of information regardless of where these sources are
located on the organization chart.
4. The reward system is such that managers and supervisors are rewarded (and punished) comparably
Sort-term profit or production performance, Growth and development of their subordinates, and
creating a viable working group.
5. Communication laterally and vertically is relatively undistorted. People are generally open and
confronting. They share all the relevant facts including feelings.
6. There is a minimum amount of inappropriate win/lose activities between individuals and groups.
Constant effort exists at all levels to treat conflict, and conflict situations, as problems subject to
problem-solving methods.
7. There is high "conflict" (clash of ideas) about tasks and projects, and relatively little energy spent in
clashing over interpersonal difficulties because they have been generally worked through.
8. The organization and its parts see themselves as interacting with each other and with a larger
environment. The organization is an "open system."
9. There is a shared value, and management strategy to support it, of trying to help each person (or
unit) in the organization maintains his (or its) integrity and uniqueness in an interdependent
10. The organization and its members operate in an "action-research" way. General practice is to build
in feedback mechanisms so that individuals and groups can learn from their own experience.
The only constant is Change:
Although many organizations have been able to keep pace with the changes in information technology, few
firms have been able to adapt to changing social and cultural conditions. In a dynamic environment, change
is unavoidable. The pace of change has become so rapid that it is difficult to adjust to or compensate for
one change before another is necessary. Change is, in essence, a moving target. The technological, social,
and economic environment is rapidly changing, and an organization will be able to survive only if it can
effectively respond to these changing demands. As we move into the twenty first century, increases in
productivity of 100 percent, not 10 percent, will be required for corporations to compete effectively.
Given this increasingly complex environment, it becomes even more critical for management to identify
and respond to forces of social and technical change. In attempting to manage today's organizations, many
executives find that their past failures to give enough attention to the changing environment are how
creating problems for them. In contrast 3M Corporation has developed an outstanding reputation for
innovation. 3M is big but acts small. 3M's 15 percent rule allows its people to spend up to 15 percent of the
work week on anything as long as it is product related. The most famous example to come out of this is
Post-it note.
The Organization of the Future:
The fundamental nature of managerial success is changing. The pace of this change is relentless, and
increasing past sources of competitive advantage, such as economies of scale and huge advertising budgets,
is no longer as effective in the new competitive landscape. Moreover, the traditional managerial approach
can no longer lead a firm to economic leadership. (See the OD in Practice what Trilogy Software is doing
to become a successful company of the future.)
Today's managers need a new mind set ­ one that values flexibility, speed, innovation, and the challenge
that evolves from constantly changing conditions. Virtual organizations can spring up overnight as
networks of free agents combine expertise for a new project or produce. Nothing could be more flexible,
ready to turn on a dime and grab any new opportunity. Management theorists believe that to be successful
in the next century, organizations will require changes of the kind in the figure 2 They suggest that
predictability is a thing of the past, and that the winning organization of today and tomorrow, it is
becoming increasingly clear, will be based upon quality, innovation, and flexibility.
These successful firms will share certain common traits including
Organization Development ­ MGMT 628
Faster ­ more responsive to innovation and change
Quality conscious ­ totally committed to quality
Employee involvement ­ adding value through human resources
Customer oriented ­ creating niche markets
Smaller ­ made up of more autonomous units
Figure: 02
Fig. 1.2. The Changing Organization of the
Organization Development ­ MGMT 628
OD in Practice: Trilogy Software ­ A New Kind of Company:
A dropout of Stanford, Joe Liemandt, formed a small software company, Trilogy Software Inc., in Austin,
Texas, in 1989. Starting with a small investment, the company grew from 400 to 1000 employees within a
short span of four years. Today, Trilogy is among the world's largest privately held software companies and
is a leading provider of industry-specific software.
To call all those who work for Trilogy as "workers" would be wrong. They are all shareholders. They are all
managers. They are all partners.
The founder, since its start, knows one thing that is Trilogy depends on talented people. He also knows
that people can go anywhere, join any of the competitive companies, which means that his biggest
competitive headache isn't companies. His biggest worry is holding onto people. "There is nothing more
important than recruiting and developing people," he says. "That's my number-one job. Trilogy is going
head-to-head with Microsoft and other biggies in the talent war.
They have a very clear teachable point of view of what Trilogy is and what they practice. They know how
to energize people, how to make courageous decisions. The CEO personally teaches a large portion of the
classes held for Trilogy's employee recruitment and development program ­ the glue that binds.
Trilogy has some unusual practices, including perks like speedboat for water skiing available to all
employees, fully stocked kitchens on every floor, and parties every Friday. And there are spontaneous
awards, such as a sports car for good work and trip to a Las Vegas. The CEO once took the entire
company on a week-long, all-expense-paid trip to Hawaii. Bonuses are given to top performers that are
equal to 50 or 100 percent of their regular salaries.
The economy is fostering new kinds of organizations with new kinds of practices and operating rules for
pulling people together. These companies offer many of the advantages of free agency; flexibility in how,
when, and where you work; compensation linked to what you contribute; freedom to move from project to
project. However, they also offer the advantages of belonging to an organization in which mutual
commitment builds continuity.
Table of Contents:
  1. The Challenge for Organizations:The Growth and Relevance of OD
  2. OD: A Unique Change Strategy:OD consultants utilize a behavioral science base
  3. What an “ideal” effective, healthy organization would look like?:
  4. The Evolution of OD:Laboratory Training, Likert Scale, Scoring and analysis,
  5. The Evolution of OD:Participative Management, Quality of Work Life, Strategic Change
  6. The Organization Culture:Adjustment to Cultural Norms, Psychological Contracts
  7. The Nature of Planned Change:Lewin’s Change Model, Case Example: British Airways
  8. Action Research Model:Termination of the OD Effort, Phases not Steps
  9. General Model of Planned Change:Entering and Contracting, Magnitude of Change
  10. The Organization Development Practitioner:External and Internal Practitioners
  11. Creating a Climate for Change:The Stabilizer Style, The Analyzer Style
  12. OD Practitioner Skills and Activities:Consultant’s Abilities, Marginality
  13. Professional Values:Professional Ethics, Ethical Dilemmas, Technical Ineptness
  14. Entering and Contracting:Clarifying the Organizational Issue, Selecting an OD Practitioner
  15. Diagnosing Organizations:The Process, The Performance Gap, The Interview Data
  16. Organization as Open Systems:Equifinality, Diagnosing Organizational Systems
  17. Diagnosing Organizations:Outputs, Alignment, Analysis
  18. Diagnosing Groups and Jobs:Design Components, Outputs
  19. Diagnosing Groups and Jobs:Design Components, Fits
  20. Collecting and Analyzing Diagnostic information:Methods for Collecting Data, Observations
  21. Collecting and Analyzing Diagnostic information:Sampling, The Analysis of Data
  22. Designing Interventions:Readiness for Change, Techno-structural Interventions
  23. Leading and Managing Change:Motivating Change, The Life Cycle of Resistance to Change
  24. Leading and managing change:Describing the Core Ideology, Commitment Planning
  25. Evaluating and Institutionalizing Organization Development Interventions:Measurement
  26. Evaluating and Institutionalizing Organization Development Interventions:Research Design
  27. Evaluating and Institutionalizing Organization Development Interventions
  28. Interpersonal and Group Process Approaches:Group Process
  29. Interpersonal and Group Process Approaches:Leadership and Authority, Group Interventions
  30. Interpersonal and Group Process Approaches:Third-Party Interventions
  31. Interpersonal and Group Process Approaches:Team Building, Team Building Process
  32. Interpersonal and Group Process Approaches:Team Management Styles
  33. Organization Process Approaches:Application Stages, Microcosm Groups
  34. Restructuring Organizations:Structural Design, Process-Based Structures
  35. Restructuring Organizations:Downsizing, Application Stages, Reengineering
  36. Employee Involvement:Parallel Structures, Multiple-level committees
  37. Employee Involvement:Quality Circles, Total Quality Management
  38. Work Design:The Engineering Approach, Individual Differences, Vertical Loading
  39. Performance Management:Goal Setting, Management by Objectives, Criticism of MBO
  40. Developing and Assisting Members:Career Stages, Career Planning, Job Pathing
  41. Developing and Assisting Members:Culture and Values, Employee Assistance Programs
  42. Organization and Environment Relationships:Environmental Dimensions, Administrative Responses
  43. Organization Transformation:Sharing the Vision, Three kinds of Interventions
  44. The Behavioral Approach:The Deep Assumptions Approach
  45. Seven Practices of Successful Organizations:Training, Sharing Information