Organization Development and Change- 10th ed - part 1

© Pixmann/Imagezoo/Getty Images 10e Organization Development & Change Thomas G. Cummings University of Southern California Christopher G. Worley University of Southern California Pepperdine University Australia • Brazil • Mexico • Singapore • United Kingdom • United States

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Dedication To Chailin and Debbie, still the loves of our lives And to our wonderful children, Catherine Cummings and Sarah, Hannah, and Samuel Worley In Memory of the Fallen Larry Greiner Richard Hackman Tony Raia Edie Seashore Charlie Seashore In Loving Memory Jessica Joan Worley

© Pixmann/Imagezoo/Getty Images Brief Contents Preface xvi CHAPTER 13 375 About the Authors xxii Employee Involvement 403 CHAPTER 1 CHAPTER 14 438 General Introduction to Organization 1 Work Design 439 Development 473 PART 5 Human Resource 497 PART 1 Overview of Organization 20 Interventions 528 Development 529 CHAPTER 15 569 CHAPTER 2 21 Performance Management 605 The Nature of Planned Change 45 CHAPTER 16 658 CHAPTER 3 Talent Management The Organization Development Practitioner CHAPTER 17 659 Workforce Diversity and Wellness PART 2 The Process of Organization 74 685 Development PART 6 Strategic Change Interventions 731 CHAPTER 4 75 784 Entering and Contracting 89 CHAPTER 18 793 CHAPTER 5 Transformational Change 797 Diagnosing 123 CHAPTER 19 CHAPTER 6 157 Continuous Change Collecting, Analyzing, and Feeding Back 179 CHAPTER 20 Diagnostic Information Transorganizational Change CHAPTER 7 207 Designing Interventions PART 7 Special Applications of CHAPTER 8 Organization Development Managing Change CHAPTER 9 CHAPTER 21 Evaluating and Institutionalizing Organization Development for Economic, Organization Development Interventions Ecological, and Social Outcomes CHAPTER 22 PART 3 Human Process 264 Organization Development in Nonindustrial Interventions Settings: Health Care, School Systems, the Public Sector, and Family–Owned CHAPTER 10 CHAPTER 23 Interpersonal and Group Process Approaches 265 Future Directions in Organization Development CHAPTER 11 297 Organization Process Approaches Glossary PART 4 Technostructural 338 Name Index Interventions Subject Index CHAPTER 12 339 Restructuring Organizations iv

© Pixmann/Imagezoo/Getty Images Contents CHAPTER 1 Preface xvi About the Authors xxii PART 1 General Introduction to Organization Development 1 CHAPTER 2 1-1 Organization Development Defined 1 1-2 The Growth and Relevance of Organization Development 4 1-3 A Short History of Organization Development 7 1-3a Laboratory Training Background 8 1-3b Action Research and Survey-Feedback Background 8 1-3c Normative Background 9 1-3d Productivity and Quality-of-Work-Life Background 11 1-3e Strategic Change Background 13 1-4 Evolution in Organization Development 13 1-5 Overview of the Book 15 Summary 17 Notes 17 Overview of Organization Development 20 21 The Nature of Planned Change v 2-1 Theories of Planned Change 22 2-1a Lewin’s Change Model 22 2-1b Action Research Model 24 2-1c The Positive Model 26 2-1d Comparisons of Change Models 27 2-2 General Model of Planned Change 28 2-2a Entering and Contracting 28 2-2b Diagnosing 29 2-2c Planning and Implementing Change 29 2-2d Evaluating and Institutionalizing Change 30 2-3 Different Types of Planned Change 30 2-3a Magnitude of Change 30 Application 2.1 Planned Change at the San Diego County Regional Airport Authority 31 2-3b Degree of Organization 34 2-3c Domestic versus International Settings 35 Application 2.2 Planned Change in an Underorganized System 36 2-4 Critique of Planned Change 40 2-4a Conceptualization of Planned Change 40 2-4b Practice of Planned Change 41

vi CONTENTS Summary 42 Notes 42 CHAPTER 3 The Organization Development Practitioner 45 PART 2 3-1 Who Is the Organization Development Practitioner? 46 47 CHAPTER 4 3-2 Competencies of an Effective Organization Development Practitioner CHAPTER 5 3-2a Intrapersonal Skills or “Self-Management” Competence 48 3-2b Interpersonal Skills 51 3-2c General Consultation Skills 51 3-2d Organization Development Theory 52 3-3 The Professional Organization Development Practitioner 52 3-3a Role of Organization Development Professional Positions 52 Application 3.1 Personal Views of the Internal and External Consulting Positions 55 3-3b Careers of Organization Development Professionals 59 3-4 Professional Values 60 3-5 Professional Ethics 61 3-5a Ethical Guidelines 61 3-5b Ethical Dilemmas 62 Application 3.2 Kindred Todd and the Ethics of OD 65 Summary 66 Notes 67 Appendix 70 The Process of Organization Development 74 75 Entering and Contracting 89 4-1 Entering into an OD Relationship 76 4-1a Clarifying the Organizational Issue 76 4-1b Determining the Relevant Client 77 4-1c Selecting an OD Practitioner 78 4-2 Developing a Contract 79 Application 4.1 Entering Alegent Health 80 4-2a Mutual Expectations 81 4-2b Time and Resources 81 4-2c Ground Rules 82 4-3 Interpersonal Process Issues in Entering and Contracting 82 Application 4.2 Contracting with Alegent Health 83 Summary 87 Notes 87 Diagnosing 5-1 What Is Diagnosis? 90 5-2 The Need for Diagnostic Models 91 5-3 Open-Systems Model 92 5-3a Organizations as Open Systems 92 5-3b Diagnosing Organizational Systems 94

CONTENTS vii 5-4 Organization-Level Diagnosis 96 110 5-4a Inputs 96 5-4b Design Components 98 5-4c Outputs 100 5-4d Alignment 100 5-4e Analysis 101 Application 5.1 Steinway & Sons 102 5-5 Group-Level Diagnosis 106 5-5a Inputs 106 5-5b Design Components 107 5-5c Outputs 108 5-5d Alignment 108 5-5e Analysis 109 Application 5.2 Top-Management Team at Ortiv Glass Corporation 5-6 Individual-Level Diagnosis 112 5-6a Inputs 112 5-6b Design Components 113 5-6c Outputs 113 5-6d Alignment 114 5-6e Analysis 114 Application 5.3 Job Design at Pepperdine University 115 Summary 119 Notes 119 CHAPTER 6 Collecting, Analyzing, and Feeding Back Diagnostic Information 123 6-1 The Diagnostic Relationship 123 136 6-2 Collecting Data 126 6-2a Questionnaires 127 6-2b Interviews 129 6-2c Observations 130 6-2d Unobtrusive Measures 131 6-3 Sampling 132 6-4 Analyzing Data 133 6-4a Qualitative Tools 133 6-4b Quantitative Tools 135 Application 6.1 Collecting and Analyzing Diagnostic Data at Alegent Health 6-5 Feeding Back Data 142 6-5a Content of Feedback 142 6-5b Process of Feedback 144 6-6 Survey Feedback 145 6-6a What Are the Steps? 145 Application 6.2 Training OD Practitioners in Data Feedback 146 6-6b Survey Feedback and Organizational Dependencies 148 Application 6.3 Survey Feedback and Planned Change at Cambia Health Solutions 149 6-6c Limitations of Survey Feedback 152 6-6d Results of Survey Feedback 152 Summary 154 Notes 154

viii CONTENTS CHAPTER 7 Designing Interventions 157 CHAPTER 8 7-1 Overview of Interventions 157 7-1a Human Process Interventions 157 7-1b Technostructural Interventions 159 7-1c Human Resources Management Interventions 160 7-1d Strategic Change Interventions 161 7-2 What Are Effective Interventions? 162 7-3 How to Design Effective Interventions 163 7-3a Contingencies Related to the Change Situation 164 7-3b Contingencies Related to the Target of Change 171 Summary 173 Notes 175 Managing Change 179 8-1 Overview of Change Activities 179 8-2 Motivating Change 181 8-2a Creating Readiness for Change 181 8-2b Overcoming Resistance to Change 183 8-3 Creating a Vision 184 Application 8.1 Motivating Change in the Sexual Violence Prevention Unit of Minnesota’s Health Department 185 8-3a Describing the Core Ideology 186 8-3b Constructing the Envisioned Future 187 8-4 Developing Political Support 188 Application 8.2 Creating a Vision at Premier 189 8-4a Assessing Change Agent Power 192 8-4b Identifying Key Stakeholders 192 8-4c Influencing Stakeholders 192 8-5 Managing the Transition 193 Application 8.3 Developing Political Support for the Strategic Planning Project in the Sexual Violence Prevention Unit 194 8-5a Activity Planning 196 8-5b Commitment Planning 196 8-5c Change-Management Structures 196 8-5d Learning Processes 196 8-6 Sustaining Momentum 197 Application 8.4 Transition Management in the HP–Compaq Acquisition 198 8-6a Providing Resources for Change 200 8-6b Building a Support System for Change Agents 200 8-6c Developing New Competencies and Skills 200 8-6d Reinforcing New Behaviors 201 8-6e Staying the Course 201 Application 8.5 Sustaining Change at RMIT University Library in Melbourne, Australia 202 Summary 204 Notes 205

CONTENTS ix CHAPTER 9 Evaluating and Institutionalizing Organization Development 207 Interventions PART 3 9-1 Evaluating Organization Development Interventions 207 CHAPTER 10 9-1a Implementation and Evaluation Feedback 208 9-1b Measurement 211 9-1c Research Design 216 Application 9.1 Evaluating Change at Alegent Health 219 9-2 Institutionalizing Organizational Changes 221 9-2a Institutionalization Framework 222 9-2b Organization Characteristics 222 9-2c Intervention Characteristics 223 9-2d Institutionalization Processes 224 9-2e Indicators of Institutionalization 226 Application 9.2 Institutionalizing Structural Change at Hewlett-Packard 227 Summary 229 Notes 229 Selected Cases 232 262 Sunflower Incorporated 232 Kenworth Motors 234 Peppercorn Dining 238 Diagnosis and Feedback at Adhikar 257 Managing Change: Action Planning for the Vélo V Project in Lyon, France Human Process Interventions 264 Interpersonal and Group Process Approaches 265 10-1 Diagnostic Issues in Interpersonal and Group Process Interventions 266 10-2 Process Consultation 267 10-2a Basic Process Interventions 268 Application 10.1 Process Consultation at Christian Caring Homes, Inc. 271 10-2b Results of Process Consultation 273 10-3 Third-Party Interventions 274 10-3a An Episodic Model of Conflict 275 10-3b Facilitating the Conflict Resolution Process 276 10-4 Team Building 277 Application 10.2 Conflict Management at Ross & Sherwin 278 10-4a Team-Building Activities 282 10-4b Interventions Relevant to Individual Behavior 285 10-4c Interventions Relevant to the Group’s Behavior 285 10-4d Interventions Affecting the Group’s Integration with the Rest of the Organization 286 Application 10.3 Aligning Senior Teams at Vaycot Products 287 10-4e The Manager’s Role in Team Building 291 10-4f The Results of Team Building 292 Summary 293 Notes 294

x CONTENTS CHAPTER 11 Organization Process Approaches 297 PART 4 11-1 Diagnostic Issues in Organization Process Interventions 298 CHAPTER 12 11-2 Organization Confrontation Meeting 298 11-2a Application Stages 299 CHAPTER 13 Application 11.1 A Work-Out Meeting at General Electric Medical Systems Business 300 11-2b Results of Confrontation Meetings 301 11-3 Intergroup Relations Interventions 301 11-3a Microcosm Groups 301 11-3b Resolving Intergroup Conflict 304 Application 11.2 Improving Intergroup Relationships in Johnson & Johnson’s Drug Evaluation Department 307 11-4 Large Group Interventions 309 11-4a Application Stages 310 Application 11.3 Using the Decision Accelerator to Generate Innovative Strategies in Alegent’s Women’s and Children’s Service Line 314 11-4b Results of Large Group Interventions 318 Summary 319 Notes 320 Selected Cases 322 Lincoln Hospital: Third-Party Intervention 322 Large Group Interventions at Airbus’ ICT Organization 329 Technostructural Interventions 338 Restructuring Organizations 339 12-1 Structural Design 339 349 12-1a The Functional Structure 340 12-1b The Divisional Structure 342 12-1c The Matrix Structure 344 12-1d The Process Structure 346 12-1e The Customer-Centric Structure Application 12.1 Healthways’ Process Structure 350 12-1f The Network Structure 353 12-2 Downsizing 356 Application 12.2 Amazon.com’s Network Structure 357 12-2a Application Stages 359 Application 12.3 Downsizing in Menlo Park, California 362 12-2b Results of Downsizing 363 12-3 Reengineering 364 12-3a Application Stages 365 12-3b Results from Reengineering 368 Application 12.4 Honeywell IAC’s TotalPlant™ Reengineering Process 369 Summary 371 Notes 371 Employee Involvement 375 13-1 Employee Involvement: What Is It? 376 13-1a A Working Definition of Employee Involvement 376

CONTENTS xi 13-1b The Diffusion of Employee Involvement Practices 377 13-1c How Employee Involvement Affects Productivity 377 13-2 Employee Involvement Interventions 379 13-2a Parallel Structures 379 Application 13.1 Using the AI Summit to Build Union–Management Relations at Roadway Express 382 13-2b Total Quality Management 385 Application 13.2 TQM at the Ritz-Carlton 391 13-2c High-Involvement Organizations 392 Application 13.3 Building a High-Involvement Organization at Air Products and Chemicals, Inc. 396 Summary 399 Notes 399 CHAPTER 14 Work Design 403 PART 5 14-1 The Engineering Approach 404 CHAPTER 15 14-2 The Motivational Approach 405 405 14-2a The Core Dimensions of Jobs 14-2b Individual Differences 407 14-2c Application Stages 407 Application 14.1 Enriching Jobs at the Hartford’s Employee Relations Consulting Services Group 410 14-2d Barriers to Job Enrichment 412 14-2e Results of Job Enrichment 413 14-3 The Sociotechnical Systems Approach 414 14-3a Conceptual Background 414 14-3b Self-Managed Work Teams 415 14-3c Application Stages 419 Application 14.2 Developing Self-Managed Teams at WI, Inc. 421 14-3d Results of Self-Managed Teams 423 14-4 Designing Work for Technical and Personal Needs 425 14-4a Technical Factors 425 14-4b Personal-Need Factors 426 14-4c Meeting Both Technical and Personal Needs 428 Summary 429 Notes 429 Selected Cases 433 City of Carlsbad, California: Restructuring the Public Works Department (A) 433 The Sullivan Hospital System 435 Human Resource Interventions 438 439 Performance Management 15-1 A Model of Performance Management 440 15-2 Goal Setting 442 15-2a Characteristics of Goal Setting 442 15-2b Application Stages 443

xii CONTENTS 15-2c Management by Objectives 444 15-2d Effects of Goal Setting and MBO 445 Application 15.1 Changing the Human Capital Management Practices at Cambia Health Solutions 446 15-3 Performance Appraisal 448 15-3a The Performance Appraisal Process 449 15-3b Application Stages 451 15-3c Effects of Performance Appraisal 452 15-4 Reward Systems 452 Application 15.2 Adapting the Appraisal Process at Capital One Financial 453 15-4a Structural and Motivational Features of Reward Systems 455 15-4b Reward System Design Features 457 15-4c Skill- and Knowledge-Based Pay Systems 458 15-4d Performance-Based Pay Systems 460 15-4e Gain-Sharing Systems 462 15-4f Promotion Systems 464 15-4g Reward-System Process Issues 464 Application 15.3 Revising the Reward System at Lands’ End 465 Summary 468 Notes 468 CHAPTER 16 Talent Management 473 CHAPTER 17 16-1 Coaching and Mentoring 474 476 16-1a What Are the Goals? 474 16-1b Application Stages 475 16-1c The Results of Coaching and Mentoring 16-2 Management and Leadership Development Interventions 476 16-2a What Are the Goals? 477 16-2b Application Stages 477 Application 16.1 Leading Your Business at Microsoft Corporation 479 16-2c The Results of Development Interventions 480 16-3 Career Planning and Development Interventions 480 16-3a What Are the Goals? 481 16-3b Application Stages 482 Application 16.2 PepsiCo’s Career Planning and Development Framework 491 16-3c The Results of Career Planning and Development 493 Summary 493 Notes 494 Workforce Diversity and Wellness 497 17-1 Workforce Diversity Interventions 497 503 17-1a What Are the Goals? 498 17-1b Application Stages 499 17-1c The Results for Diversity Interventions 17-2 Employee Stress and Wellness Interventions 504 17-2a What Are the Goals? 504 Application 17.1 Aligning Strategy and Diversity at L’Oréal 505 513 17-2b Application Stages 507 17-2c The Results of Stress Management and Wellness Interventions

CONTENTS xiii Application 17.2 Johnson & Johnson’s Health and Wellness Program 514 Summary 516 Notes 516 Selected Cases 519 Employee Benefits at HealthCo 519 Designing and Implementing a Reward System at Disk Drives, Inc. 523 PART 6 Strategic Change Interventions 528 CHAPTER 18 Transformational Change 529 CHAPTER 19 18-1 Characteristics of Transformational Change 530 18-1a Change Is Triggered by Environmental and Internal Disruptions 530 18-1b Change Is Initiated by Senior Executives and Line Managers 531 18-1c Change Involves Multiple Stakeholders 532 18-1d Change Is Systemic and Revolutionary 532 18-1e Change Involves Significant Learning and a New Paradigm 533 18-2 Organization Design 534 537 18-2a Conceptual Framework 534 18-2b Basic Design Alternatives 535 18-2c Worldwide Organization Design Alternatives Application 18.1 Organization Design at Deere & Company 538 Application 18.2 Implementing the Global Strategy: Changing the Culture of Work in Western China 542 18-2d Application Stages 546 18-3 Integrated Strategic Change 548 18-3a Key Features 549 18-3b Implementing the ISC Process 549 18-4 Culture Change 552 18-4a Defining and Diagnosing Organization Culture 552 Application 18.3 Managing Strategic Change at Microsoft Canada 553 18-4b Implementing the Culture Change Process 558 Application 18.4 Culture Change at IBM 561 Summary 563 Notes 563 Continuous Change 569 19-1 Dynamic Strategy Making 570 19-1a Conceptual Framework 571 19-1b Application Stages 573 19-2 Self-Designing Organizations 576 19-2a The Demands of Turbulent Environments 576 Application 19.1 Dynamic Strategy Making at Whitbread PLC 577 19-2b Application Stages 579 19-3 Learning Organizations 582 Application 19.2 Self-Design at Healthways Corporation 583 19-3a Conceptual Framework 584 19-3b Organization Learning Interventions 586 19-4 Built-to-Change Organizations 593 19-4a Design Guidelines 593

xiv CONTENTS Application 19.3 Dialogue and Organization Learning at DMT 594 19-4b Application Stages 597 Application 19.4 Creating a Built-to-Change Organization at Capital One Financial 599 Summary 601 Notes 602 CHAPTER 20 Transorganizational Change 605 PART 7 20-1 Transorganizational Rationale 606 CHAPTER 21 20-2 Mergers and Acquisitions 607 20-2a Application Stages 608 CHAPTER 22 Application 20.1 Planning the United–Continental Merger 613 20-3 Strategic Alliance Interventions 616 20-3a Application Stages 616 Application 20.2 Building Alliance Relationships 618 20-4 Network Interventions 620 20-4a Creating the Network 621 20-4b Managing Network Change 624 Application 20.3 The Alaska Workforce Coalition 627 Summary 631 Notes 632 Selected Cases 636 Global Mobile Corporation 636 Leading Strategic Change at DaVita: The Integration of the Gambro Acquisition 645 Special Applications of Organization Development 658 Organization Development for Economic, Ecological, 659 and Social Outcomes 21-1 Sustainable Management Organizations 659 21-1a Design Guidelines 660 21-1b Application Stages 667 21-2 Global Social Change 670 21-2a Global Social Change Organizations 670 Application 21.1 Interface Carpet’s Transformation to Sustainability 671 21-2b Application Stages 674 21-2c Change-Agent Roles and Skills 677 Application 21.2 Social and Environmental Change at LDI Africa 678 Summary 681 Notes 682 Organization Development in Nonindustrial Settings: 685 Health Care, School Systems, the Public Sector, and Family–Owned 22-1 Organization Development in Health Care 686 22-1a The Health Care Industry—A Snapshot 686 22-1b Trends in Health Care 687

CONTENTS xv 22-1c Opportunities for Organization Development Practice 690 22-1d Conclusions 693 22-2 Organization Development in Public School Systems 693 693 22-2a A Complex, Diverse, and Evolving K-12 Educational System 22-2b Change Forces 694 22-2c Disappointing Reform Efforts 696 22-2d Considerations for OD Practitioners 699 22-2e Conclusions 702 22-3 Organization Development in the Public Sector 703 22-3a Comparing Public- and Private-Sector Organizations 705 22-3b Recent Research and Innovations in Public-Sector Organization Development 710 22-3c Conclusions 711 22-4 Organization Development in Family-Owned Businesses 711 22-4a The Family Business System 712 22-4b Business, Ownership, and Family Systems 714 22-4c Family Business Developmental Stages 715 22-4d A Parallel Planning Process 716 22-4e Values 716 22-4f Critical Issues in Family Business 719 Summary 725 Notes 726 CHAPTER 23 Future Directions in Organization Development 731 23-1 Trends Within Organization Development 732 784 23-1a Traditional Trend 732 793 23-1b Pragmatic Trend 733 797 23-1c Scholarly Trend 733 23-1d Implications for OD’s Future 734 23-2 Trends in the Context of Organization Development 735 23-2a The Economy 735 23-2b The Workforce 738 23-2c Technology 739 23-2d Organizations 740 23-2e Implications for OD’s Future 741 Summary 747 Notes 747 Integrative Cases 750 B. R. Richardson Timber Products Corporation 750 Building the Cuyahoga River Valley Organization 764 The Transformation of Meck Insurance 774 Glossary Name Index Subject Index

© Pixmann/Imagezoo/Getty Images Preface What a difference an edition makes. We need look no farther than this text to get a sense of the pace and consequences of change. Compared to the promise of hope and change that accompanied Barack Obama’s first election while we were finishing the ninth edi- tion, finishing this tenth edition in 2013 brings daily reminders that things are moving far more quickly and unpredictably than we could ever have imagined. As a global soci- ety, we are still living with the enormous personal, social, and economic consequences of the financial turmoil brought on by the mortgage-lending crisis and the subsequent recession that enveloped the world’s economies; still coping with the distressing after- math of man-made and natural calamities such as the BP/Macondo/Deepwater Horizon disaster in the Gulf of Mexico and the earthquake and tsunami that devastated Japan; and still apprehensive about the spreading strife and seemingly intractable unrest in the Middle East, the angry rhetoric from the Korean peninsula, and the ever present threat of terrorist attacks almost anywhere, any time. We are reminded almost daily that global climate change, nuclear weapons proliferation, and disease pandemics can actually hap- pen in our lifetime, businesses are not too big to fail, and almost no industry or sector of society is free of ethical breeches, illegal practices, or mismanagement. From a more opti- mistic perspective, more and more of the world’s population is taking advantage of the rapid advances in information technology that are transforming how we do business, communicate and relate with each other, deliver and access information, and educate and entertain ourselves. Add to this the enormous advances in medicine and health care that are offering promising new treatments for many of the maladies that plague us. For organizations existing in these times, life can be extremely challenging. Busi- nesses increasingly face global markets in which competition is intense, and economic, political, and cultural conditions are diverse and can change unexpectedly. Sources of competitive advantage, such as technical, product, or resource superiority, can quickly erode as can a firm’s storehouse of human capital and knowledge. Government agencies encounter more and more demands to operate more efficiently, offering faster, cheaper, and better service at lower cost. Yet funding is scarcer and tied unpredictably to shifting economic conditions, political whims, and public mandates. Educational institutions increasingly are being asked to keep pace with the changing needs of a global society by delivering more knowledge to larger numbers of more diverse students at lower costs in ways that transcend the physical classroom. At the same time, budgets for public education have been falling, advances in information technology have far exceeded the willingness and capability of educators to apply them to student learning, and the bureaucracy surrounding curriculum change remains well in place. In times like these, organization development (OD) and change has never been more relevant and necessary. For our part, this is the tenth edition of the market-leading text in the field. OD is an applied field of change that uses behavioral science knowledge to improve organizations’ functioning and performance and to increase their capability to change. OD is more than change management, however, and goes well beyond the mechanistic, programmatic assumptions that organization change can simply be scripted by various methods of “involving” people and “enrolling” them in the change. OD is not xvi

PREFACE xvii concerned about change for change’s sake, a way to implement the latest fad, or a pawn for doing management’s bidding. It is about learning and improving in ways that make individuals, groups, organizations, and ultimately societies better off and more capable of managing change in the future. Moreover, OD is more than a set of tools and techniques. It is not a bunch of “interventions” looking to be applied in whatever organization that comes along. It is an integrated theory and practice aimed at increasing an organization’s effectiveness. Finally, OD is more than a set of values. It is not a front for the promulga- tion of humanistic and spiritual beliefs or a set of interventions that boil down to “holding hands and singing Kumbaya.” It is a set of evidence-based ideas and practices about how organizations can produce sustainable high performance and human fulfillment. The original edition of this text, authored by OD pioneer Edgar Huse in 1975, became a market leader because it faced the relevance issue. It took an objective, research perspective and placed OD practice on a strong theoretical footing. Ed showed that, in some cases, OD did produce meaningful results but that additional work was still needed. Sadly, Ed passed away following the publication of the second edition. His wife, Mary Huse, asked Tom Cummings to revise the book for subsequent editions. With the fifth edition, Tom asked Chris Worley to join him in writing the text. The most recent editions have had an important influence on the perception of OD. While maintaining the book’s strengths of even treatment and unbiased reporting, the newer editions made even larger strides in placing OD on a strong empirical foundation. They broadened the scope and increased the relevance of OD by including interventions that had a content component, including work design, employee involvement, organization design, and transorganization change. They took another step toward relevance and sug- gested that OD had begun to incorporate a strategic perspective. This strategic orientation proposed that OD could be as concerned with performance issues as it was with human potential. Effective OD, from this newer perspective, relied as much on knowledge about organization theory and economics as it did on the more “micro” behavioral sciences. The most recent additions describe how OD has become more global. This global orientation includes the growing application of OD in cross-cultural settings. It also shows how OD can help organizations design their global structures and operations. It is our greatest hope that the current edition continues this tradition of rigor and relevance. Revisions to the Tenth Edition Our goal in the tenth edition is to update the field again. We take our role as the authors of the leading textbook in OD seriously and, we hope, responsibly. Although we have retained several features of the prior editions, we have made some important changes. Integration and Flow The chapter sequence from previous editions has been maintained, but we have reduced the number of chapters from 25 to 23 and worked hard to better integrate the content. For exam- ple, we achieved a more integrated presentation of the diagnostic process by combining two chapters into one. Similarly, we combined chapters on data collection, analysis, and feedback into one, more tightly integrated description. Finally, we have tried to use a consistent organi- zation design framework in the diagnosis, structural design, and strategic change sections. Global Integration We have also improved the integration and flow of material by making a concerted attempt to address global issues and global perspectives throughout the text. We began the

xviii PREFACE internationalization of the text in the sixth edition with the addition of a chapter on “global issues in OD.” However, in the past, the text could be criticized, and rightfully so, for being “North America centric.” The examples, applications, and cases came almost exclusively from U.S.-based companies. In the tenth edition, we have tried—ultimately the reader will be the judge of our effectiveness—to dramatically reduce the North American bias and to cite European, Asian, Australian, South American, and where possible, African examples. Strategic Emphasis Continued Reflecting on where we think OD is headed, we completely rewrote Part 6 on strategic change interventions. While we kept the chapter titles, we added dynamic strategy mak- ing, completely revised the section on organization design, leveraged the design section to more deeply explore integrated strategic change, and completely revised the sections on organization learning, built to change, and culture change. Sustainability We have added a new chapter (Chapter 21) focusing on OD practices intended to improve and balance organizations’ economic, social, and ecological outcomes. This topic is a growing area of OD practice and one that we believe will continue to expand. Key Chapter Revisions Other chapters have received important updates and improvements. Chapter 7’s descrip- tion of designing interventions, in keeping with the global integration described above, has been rewritten to account for cross-cultural values in interventions. In Chapter 22, the sections on OD in Healthcare, Education, Government, and Family Businesses have been completely rewritten by new and familiar guest authors. Finally, Chapter 23— Future Directions in Organization Development—has received a thorough revision based on the authors’ recent research. Distinguishing Pedagogical Features The text is designed to facilitate the learning of OD theory and practice. Based on feed- back from reviewers, this format more closely matches the OD process. Instructors can teach the process and then link OD practice to the interventions. Organization The tenth edition is organized into seven parts. Following an introductory chapter that describes the definition and history of OD, Part 1 provides an overview of organization devel- opment. It discusses the fundamental theories that underlie planned change (Chapter 2) and describes the people who practice it (Chapter 3). Part 2 is a six-chapter description of the OD process. It describes how OD practitioners enter and contract with organizations (Chapter 4); diagnose organizations, groups, and jobs (Chapter 5); collect, analyze, and feed back diagnostic data (Chapter 6); design interventions (Chapter 7); lead and manage change (Chapter 8); and evaluate and institutionalize change (Chapter 9). In this manner, instructors can focus on the OD process without distraction. Parts 3, 4, 5, and 6 then cover the major OD interventions used today according the same classification scheme used in previous editions of the text. Part 3 covers human process interventions; Part 4 describes technostructural approaches; Part 5 presents interventions in human resource management; and Part 6 addresses strategic change interventions. In the final section, Part 7, we cover special applications of OD, including

PREFACE xix OD for economic, social, and environmental outcomes (Chapter 21); OD in health care, family businesses, schools, and the public sector (Chapter 22); and the future of OD (Chapter 23). We believe this ordering provides instructors with more flexibility in teaching OD. Applications Within each chapter, we describe actual situations in which different OD techniques or interventions were used. These applications provide students with a chance to see how OD is actually practiced in organizations. In the tenth edition, about 30 percent of the applications are new and many others have been updated to maintain the text’s currency and relevance. In response to feedback from reviewers, all of the applications describe a real situation in a real organization (although sometimes we felt it necessary to use dis- guised names). In many cases, the organizations are large public companies that should be readily recognizable. We have endeavored to write applications based on our own OD practice or that have appeared in the popular literature. In addition, we have asked sev- eral of our colleagues to submit descriptions of their own practice and these applications appear throughout the text. The time and effort to produce these vignettes of OD prac- tice for others is gratefully acknowledged. Cases At the end of each major part in the book, we have included cases to permit a more in- depth discussion of the OD process. Seven of the 16 cases are new to the tenth edition. We have kept some cases that have been favorites over the years but have also replaced some of the favorites with newer ones. Also in response to feedback from users of the text, we have endeavored to provide cases that vary in levels of detail, complexity, and sophistication to allow the instructor some flexibility in teaching the material to either undergraduate or graduate students. Audience This book can be used in a number of different ways and by a variety of people. First, it serves as a primary textbook in organization development for students at both the undergraduate and graduate levels. Second, the book can also serve as an independent study guide for individuals wishing to learn more about how organization development can improve productivity and human satisfaction. Third, the book is intended to be of value to OD professionals, executives and administrators, specialists in such fields as training, occupational stress, and human resource management, and anyone interested in the complex process known as organization development. Educational Aids and Supplements Instructor’s Manual To assist instructors in the delivery of a course on organization development, an Instruc- tor’s Manual is available, which contains material that can improve the student’s appre- ciation of OD and improve the instructor’s effectiveness in the classroom. Chapter Outline and Lecture Notes The material in the chapter is outlined and comments are made concerning important pedagogical points, such as crucial assump- tions that should be noted for students, important aspects of practical application, and alternative points of view that might be used to enliven class discussion.

xx PREFACE Case Teaching Notes For each case in the text, teaching notes have been devel- oped to assist instructors in preparing for case discussions. The notes provide an out- line of the case, suggestions about where to place the case during the course, discussion questions to focus student attention, and an analysis of the case situation. In combination with the instructor’s own insights, the notes can help to enliven the case discussion or role-plays. Audiovisual Listing Finally, a list is included of films, videos, and other materials that can be used to supplement different parts of the text, along with the addresses and phone numbers of vendors that supply the materials. Test Bank The Test Bank includes a variety of multiple choice, true/false, and essay questions for each chapter. The Test Bank questions vary in levels of difficulty and meet a full range of tagging requirements so that instructors can tailor their testing to meet their specific needs. Instructors can use these questions directly or to suggest additional questions reflecting the professor’s own style. Cognero Cengage Learning Testing Powered by Cognero is a flexible, online system that allows you to: • author, edit, and manage test bank content from multiple Cengage Learning solutions • create multiple test versions in an instant • deliver tests from your LMS, your classroom or wherever you want Start Right Away! Cengage Learning Testing Powered by Cognero works on any oper- ating system or browser. • No special installs or downloads needed • Create tests from school, home, the coffee shop—anywhere with Internet access What Will You Find? • Simplicity at every step. A desktop-inspired interface features drop-down menus and familiar, intuitive tools that take you through content creation and management with ease. • Full-featured test generator. Create ideal assessments with your choice of 15 question types (including true/false, multiple choice, opinion scale/likert, and essay). Multi-language support, an equation editor and unlimited metadata help ensure your tests are complete and compliant. • Cross-compatible capability. Import and export content into other systems. PowerPoint® Presentation Slides ®The PowerPoint presentation slides consists of lecture outlines and select tables and figures used in the book. These colorful slides can greatly aid the integration of text material during lectures and discussions. Companion Site A rich companion site accompanies the text, providing many extras for the student and instructor. Visit www.cengagebrain.com to learn more.

PREFACE xxi Acknowledgments The Grateful Dead’s lyric, “What a long strange trip it’s been” seems particularly apropos in writing this edition. Reflecting the global world we live in, we revised this text virtually. Tom and Chris never once saw each other face-to-face once the work began. Tom wrote from his office in Los Angeles and his view in Palos Verdes while trying to run the Depart- ment of Management and Organization at the Marshall School of Business; Chris wrote from his sabbatical home in Lyon, France while trying to adopt the French lifestyle. How- ever, we think it is safe to say that after collaborating on five editions of the text, we finally have figured out how to do this effectively. This revision has gone very smoothly. That is not to say that we haven’t lived in the VUCA world. Volatility, uncertainty, complexity, and ambiguity certainly affected our lives in strange and tragic ways, but after five editions, we’ve learned to roll with the punches, adapt and adjust schedules, and cover each other’s back. Sometimes our writing is so bad, we want to throw up; sometimes it’s so good it brings tears to our eyes. We hope this edition will, at times, at least make you feel good. We’d like to thank those who supported us in this effort. We are grateful to and for our families: Chailin and Catherine Cummings and the Worley clan, Debbie, Sarah, Hannah, and Sam. We would like to thank our students for their comments on the previ- ous editions, for contributing many of the applications, and for helping us to try out new ideas and perspectives. A particular word of thanks go to our colleagues at USC’s Center for Effective Organizations—Ed Lawler, Sue Mohrman, John Boudreau, Alec Levenson, Gerry Ledford, Theresa Welbourne, Jim O’Toole, Jay Conger, and Jay Galbraith. They have been consistent sources of support and intellectual inquiry. We also extend thanks to Tom Williams at Booz&Co. for his patience, support, and partnership. To our friends at Pepperdine University’s MSOD program (Ann Feyerherm, Miriam Lacey, Terri Egan, Julie Chesley, Gary Mangiofico, and Kent Rhodes) we send our appreciation for their dedication to maintaining the “long grey line.” As well, the following individuals reviewed the text and influenced our thinking with their honest and constructive feedback: Jack Cox, Amberton University Stacy Ball-Elias, Southwest Minnesota State University Bruce Gillies, California Lutheran University Jim Maddox, Friends University Shannon Reilly, George Brown College We also would like to express our appreciation to members of the staff at Cengage Learning for their aid and encouragement. Special thanks go to Scott Person, Sarah Blasco, and Jennifer King for their help and guidance throughout the development of this revision. And Jerusha Govindakrishnan patiently made sure that the editing and producing of our book went smoothly. Thomas G. Cummings Christopher G. Worley Palos Verdes Estates, California San Juan Capistrano, California Lyon, France August, 2013

© Pixmann/Imagezoo/Getty Images About the Authors Thomas G. Cummings, professor, chair of the Department of Management and Organiza- tion, received his B.S. and MBA from Cornell University, and his Ph.D. from the University of California at Los Angeles. He has authored over 70 articles and 22 books and was formerly President of the Western Academy of Management, Chair of the Organization Development and Change Division of the Academy of Management, and Founding Editor of the Journal of Management Inquiry. Dr. Cummings was the 61st President of the Academy of Management, the largest professional association of management scholars in the world with a total membership of over 19,000. He is listed in American Men and Women of Science and Who’s Who in America. His major research and consulting inter- ests include designing high-performing organizations and strategic change manage- ment. He has conducted several large-scale organization design and change projects, and has consulted to a variety of private and public-sector organizations in the United States, Europe, Mexico, and Scandinavia. Christopher G. Worley is a Senior Research Scientist at the Center for Effective Organiza- tions (USC’s Marshall School of Business) and professor of management in Pepperdine University’s Master of Science in Organization (MSOD) program. He received B.S. from Westminster College, master’s degrees from Colorado State University and Pepperdine University, and his doctorate from the University of Southern California. He served as Chair of the Organization Development and Change Division of the Academy of Management, received the Luckman Teaching Fellowship at Pepperdine University, and the Douglas McGregor Award for best paper in the Journal of Applied Behavioral Science. His most recent books are Management Reset and Built to Change, and he is completing a book on organiza- tion agility. His articles on agility and strategic organization design have appeared in the Journal of Applied Behavioral Science, Journal of Organization Behavior, Sloan Management Review, Strategy Business, and Organizational Dynamics. He and his family live in San Juan Capistrano, CA. xxii

© Pixmann/Imagezoo/ 1 Getty Images General Introduction to Organization Development learning Define and describe the practice and study of organization objectives development (OD). Describe the history and relevance of OD. Distinguish OD and planned change from other forms of organization change. This is a book about organization develop- in the context of the larger environment that ment (OD)—a process that applies a broad affects them. range of behavioral science knowledge and practices to help organizations build their This book reviews the broad background of OD capability to change and to achieve greater and examines assumptions, strategies and models, effectiveness, including increased financial per- intervention techniques, and other aspects of OD. formance, employee satisfaction, and environ- This chapter provides an introduction to OD, mental sustainability. Organization development describing first the concept of OD itself. Second, it differs from other planned change efforts, such explains why OD has expanded rapidly in the past as project management or product innovation, 60 years, both in terms of people’s need to work because the focus is on building the organiza- with and through others in organizations and in tion’s ability to assess its current functioning terms of organizations’ need to adapt in a complex and to make necessary changes to achieve its and changing world. Third, it reviews briefly the goals. Moreover, OD is oriented to improving history of OD, and fourth, it describes the evolution the total system—the organization and its parts of OD into its current state. This introduction to OD is followed by an overview of the rest of the book. 1-1 Organization Development Defined Organization development is both a professional field of social action and an area of scientific inquiry. The practice of OD covers a wide spectrum of activities, with seem- ingly endless variations upon them. Team building with top corporate management, structural change in a municipality, and job enrichment in a manufacturing firm are all examples of OD. Similarly, the study of OD addresses a broad range of topics, including the effects of change, the methods of organizational change, and the factors influencing OD success. 1

2 CHAPTER 1 GENERAL INTRODUCTION TO ORGANIZATION DEVELOPMENT © Cengage Learning A number of definitions of OD exist and are presented in Table 1.1. Each definition has a slightly different emphasis. For example, Burke’s description focuses attention on culture as the target of change; French’s definition is concerned with OD’s long-term focus and the use of consultants; and Beckhard’s and Beer’s definitions address the pro- cess of OD. More recently, Burke and Bradford’s definition broadens the range and interests of OD. Worley and Feyerherm suggested that for a process to be called organi- zation development, (1) it must focus on or result in the change of some aspect of the organizational system; (2) there must be learning or the transfer of knowledge or skill to the organization; and (3) there must be evidence of improvement in or an intention to improve the effectiveness of the organization.1 The following definition incorporates most of these views and is used in this book: Organization development is a system-wide application and transfer of behavioral sci- ence knowledge to the planned development, improvement, and reinforcement of the strategies, structures, and processes that lead to organization effectiveness. This definition emphasizes several features that differentiate OD from other approaches to organizational change and improvement, such as management consulting, project management, and operations management. The definition also helps to distinguish TABLE 1.1 Definitions of Organization Development Organization development is a planned process of change in an organization’s culture through the utilization of behavioral science technology, research, and theory. (Warner Burke)2 Organization development refers to a long-range effort to improve an organization’s problem-solving capabilities and its ability to cope with changes in its external environment with the help of external or internal behavioral-scientist consultants, or change agents, as they are sometimes called. (Wendell French)3 Organization development is an effort (1) planned, (2) organization-wide, and (3) managed from the top, to (4) increase organization effectiveness and health through (5) planned interventions in the organization’s “processes,” using behavioral science knowledge. (Richard Beckhard)4 Organization development is a system-wide process of data collection, diagnosis, action planning, intervention, and evaluation aimed at (1) enhancing congruence among organizational structure, process, strategy, people, and culture; (2) devel- oping new and creative organizational solutions; and (3) developing the organi- zation’s self-renewing capacity. It occurs through the collaboration of organizational members working with a change agent using behavioral science theory, research, and technology. (Michael Beer)5 Based on (1) a set of values, largely humanistic; (2) application of the behavioral sciences; and (3) open-systems theory, organization development is a system- wide process of planned change aimed toward improving overall organization effectiveness by way of enhanced congruence of such key organization dimensions as external environment, mission, strategy, leadership, culture, structure, information and reward systems, and work policies and procedures. (Warner Burke and David Bradford)6

CHAPTER 1 GENERAL INTRODUCTION TO ORGANIZATION DEVELOPMENT 3 OD from two related subjects, change management and organization change, that also are addressed in this book. First, OD applies to changes in the strategy, structure, and/or processes of an entire system, such as an organization, a single plant of a multiplant firm, a department or work group, or individual role or job. A change program aimed at modifying an organi- zation’s strategy, for example, might focus on how the organization relates to a wider environment and on how those relationships can be improved. It might include changes both in the grouping of people to perform tasks (structure) and in methods of commu- nicating and solving problems (process) to support the changes in strategy. Similarly, an OD program directed at helping a top-management team become more effective might focus on social processes and task coordination within the group. This focus might result in the improved ability of top management to solve company problems in strategy and structure. This contrasts with approaches focusing on one or only a few aspects of a sys- tem, such as technological innovation or quality control. In these approaches, attention is narrowed to improvement of particular products or processes, or to development of pro- duction or service delivery functions. Second, OD is based on the application and transfer of behavioral science knowledge and practice, including microconcepts, such as leadership, group dynamics, and work design, and macroapproaches, such as strategy, organization design, and culture change. These subjects distinguish OD from such applications as management consulting, tech- nological innovation, or operations management that emphasize the economic, financial, and technical aspects of organizations. These approaches tend to neglect the personal and social characteristics of a system. Moreover, OD is distinguished by its intent to transfer behavioral science knowledge and skill so that the organizational system is more capable of carrying out planned change in the future. Third, OD is concerned with managing planned change, but not in the formal sense typically associated with management consulting or project management, which tends to comprise programmatic and expert-driven approaches to change. Rather, OD is more an adaptive process for planning and implementing change than a blueprint for how things should be done. It involves planning to diagnose and solve organizational problems, but such plans are flexible and often revised as new information is gathered as the change process progresses. If, for example, there was concern about the performance of a set of international subsidiaries, a reorganization process might begin with plans to assess the current relationships between the international divisions and the corporate headquarters and to redesign them if necessary. These plans would be modified if the assessment dis- covered that most of the senior management teams in the subsidiaries were not given adequate cross-cultural training prior to their international assignments. Fourth, OD involves the design, implementation, and subsequent reinforcement of change. It moves beyond the initial efforts to implement a change program to a longer- term concern for making sure the new activities sustain within the organization. For exam- ple, implementing self-managed work teams might focus on ways in which supervisors could give workers more control over work methods. After workers had more control, attention would shift to ensuring that supervisors continued to provide that freedom. That assurance might include rewarding supervisors for managing in a participative style. This attention to reinforcement is similar to training and development approaches that address maintenance of new skills or behaviors, but it differs from other change perspec- tives that do not address how a change can be sustained over time. Finally, OD is oriented to improving organizational effectiveness. Effectiveness is best measured along three dimensions. First, OD affirms that an effective organization is able to solve its own problems and to continually improve itself. OD helps organization

4 CHAPTER 1 GENERAL INTRODUCTION TO ORGANIZATION DEVELOPMENT members gain the skills and knowledge necessary to conduct these activities by involving them in the change process. Second, an effective organization has high financial and technical performance, including sales growth, acceptable profits, quality products and services, and high productivity. OD helps organizations achieve these ends by leveraging social science practices to lower costs, improve products and services, and increase pro- ductivity. Finally, an effective organization has an engaged, satisfied, and learning work- force as well as satisfied and loyal customers or other external stakeholders. The organization’s performance responds to the needs of external groups, such as stock- holders, customers, suppliers, and government agencies, which provide the organization with resources and legitimacy. Moreover, it is able to attract and motivate effective employees, who then perform at higher levels. Other forms of organizational change clearly differ from OD in their focus. Management consulting, for example, primarily addresses financial performance, whereas operations management or industrial engineer- ing focuses on productivity. Organization development can be distinguished from change management and orga- nizational change. OD and change management both address the effective implementation of planned change. They are both concerned with the sequence of activities, the processes, and the leadership that produce organization improvements. They differ, however, in their underlying value orientation. OD’s behavioral science foundation supports values of human potential, participation, and development in addition to performance and competi- tive advantage. Change management focuses more narrowly on values of cost, quality, and schedule.7 As a result, OD’s distinguishing feature is its concern with the transfer of knowledge and skill so that the organization is more able to manage change in the future. Change management does not necessarily require the transfer of these skills. In short, all OD involves change management, but change management may not involve OD. Similarly, organizational change is a broader concept than OD. As discussed above, organization development can be applied to managing organizational change. However, it is primarily concerned with managing change in such a way that knowledge and skills are transferred to build the organization’s capability to achieve goals and solve problems. It is intended to change the organization in a particular direction, toward improved problem solving, responsiveness, and effectiveness. Organizational change, in contrast, is more broadly focused and can apply to any kind of change, including technical and managerial innovations, organization decline, or the evolution of a system over time. These changes may or may not be directed at making the organization more developed in the sense implied by OD. The behavioral sciences have developed useful concepts and methods for helping organizations to deal with changing environments, competitor initiatives, technological innovation, globalization, or restructuring. They help managers and administrators to manage the change process. Many of these concepts and techniques are described in this book, particularly in relation to managing change. 1-2 The Growth and Relevance of Organization Development In each of the previous editions of this book, we argued that organizations must adapt to increasingly complex and uncertain technological, economic, political, and cultural changes. We also argued that OD could help an organization to create effective responses to these changes and, in many cases, to proactively influence the strategic direction of the firm. The rapidly changing conditions of the past few years confirm our arguments and

CHAPTER 1 GENERAL INTRODUCTION TO ORGANIZATION DEVELOPMENT 5 accentuate their relevance. According to several observers, organizations are in the midst of unprecedented uncertainty and chaos, and nothing short of a management revolution will save them.8 Three major trends are shaping change in organizations: globalization, information technology, and managerial innovation. First, globalization is changing the markets and environments in which organiza- tions operate as well as the way they function.9 The world is rapidly becoming smaller and more tightly interconnected economically, socially, and ecologically. Significant movements of goods and services, technology, human resources, and capital across inter- national borders have intensified the economic interdependence among nations and organizations. This globalization opens new markets and sources of innovation and cap- ital for organizations, but at the risk of economic problems in one sector of the world spreading rapidly to other sectors. The United States’ 2007–2008 fiscal crisis quickly evolved into a “global recession” that sent the European Economic Union into a financial tailspin while negatively impacting the economies of nations in almost every region of the globe. Similarly, social differences along cultural, political, and religious lines have rendered global markets increasingly uncertain, complex, and conflictive. Persistent ten- sions in the Middle East have had repercussions for firms throughout the globe making them more vulnerable to terrorist attacks, escalating diplomatic and military conflicts, and disrupting energy supplies. Globalization also affects organizations ecologically, expanding their access to natural resources yet making the planet more susceptible to abuse by organizations with questionable environmental practices and governments with loose environmental regulations. Growing international debates about climate change and calls for more responsible and sustainable organizational practices under- score the ecological consequences of globalization. Second, information technology is redefining the traditional business model by changing how work is performed, how knowledge is used, and how the cost of doing business is calculated.10 The way an organization collects, stores, manipulates, uses, and transmits information can lower costs and increase the value and quality of products and services. Information technology is at the heart of emerging e-commerce strategies and organizations. Amazon.com and eBay are among the survivors of a busted dot-com bubble; Facebook, LinkedIn, and Twitter are revolutionizing the way that we converse and interact with each other both personally and professionally. Google has emerged as a major competitor to Microsoft, and the amount of business being conducted on the Internet is projected to grow at double-digit rates. Moreover, the underlying rate of inno- vation is not expected to decline. Cloud computing—a state-of-the-art technology appli- cation a few years ago—is now considered routine business practice. Digital publishing and online courses are transforming how we deliver knowledge and education. The abil- ity to move information easily and inexpensively throughout and among organizations has fueled the downsizing, delayering, and restructuring of firms. The Internet has enabled new forms of work such as virtual teams and telecommuting; it has enabled many companies to outsource customer-service functions to global regions where labor is relatively inexpensive. Finally, information technology is changing how organizations create and use knowledge. Enormous data sets, so-called “big data,” are being analyzed to discover underlying trends and patterns that can inform strategic decision making. Infor- mation is also being widely shared throughout the organization. This reduces the con- centration of power at the top of the organization as employees now share the same key information that senior managers once used to control decision making. Third, managerial innovation has responded to the globalization and information tech- nology trends and has accelerated their impact on organizations. New organizational forms, such as networks, strategic alliances, and virtual corporations, provide organizations with

6 CHAPTER 1 GENERAL INTRODUCTION TO ORGANIZATION DEVELOPMENT new ways of thinking about how to manufacture goods and deliver services. The strategic alliance, for example, has emerged as one of the indispensable tools in strategy implementa- tion. No single organization, not even IBM, Toyota, or General Electric, can control the environmental and market uncertainty it faces. In addition, change innovations, such as downsizing or reengineering, have radically reduced the size of organizations and increased their flexibility; new large group interventions, such as the search conference and open space, have increased the speed with which organizational change can take place; and orga- nization learning interventions have leveraged knowledge as a critical organizational resource.11 Managers, OD practitioners, and researchers argue that these globalization and information technology forces not only are powerful in their own right but are interrelated. Their interaction makes for a highly uncertain and complex environment for all kinds of organizations, including manufacturing and service firms and those in the public and pri- vate sectors. Fortunately, a growing number of organizations are undertaking the kinds of organizational changes needed to survive and prosper in today’s environment. They are making themselves more streamlined and agile, more responsive to external demands, and more ecologically and socially sustainable. They are involving employees in key decisions and paying for performance rather than for time. They are taking the initiative in innovat- ing and managing change, rather than simply responding to what has already happened. Organization development plays a key role in helping organizations change them- selves. It helps organizations assess themselves and their environments and revitalize and rebuild their strategies, structures, and processes. OD helps organization members gain the skills and knowledge needed to continuously improve and change the organization. It helps members go beyond surface changes to transform the underlying assumptions and values governing their behaviors. The different concepts and methods discussed in this book increasingly are finding their way into government agencies, manufacturing firms, multinational corporations, service industries, educational and health care institu- tions, and not-for-profit organizations. Perhaps at no other time has OD been more responsive and practically relevant to organizations’ needs to operate effectively in a highly complex and changing world. OD is obviously important to those who plan a professional career in the field, either as an internal consultant employed by an organization or as an external consultant practicing in many organizations. A career in OD can be highly rewarding, providing challenging and interesting assignments working with managers and employees to improve their organizations and their work lives. In today’s environment, the demand for OD professionals is rising rapidly. For example, large professional services firms must have effective “change management” practices to be competitive. Career opportu- nities in OD should continue to expand in the United States and abroad. Organization development also is important to those who have no aspirations to become professional practitioners. All managers and administrators are responsible for supervising and developing subordinates and for improving their departments’ perfor- mance. Similarly, all staff specialists, such as financial analysts, engineers, accountants, information technologists, or market researchers, are responsible for offering advice and counsel to managers and for introducing new methods and practices. Finally, OD is important to general managers and other senior executives because OD can help the whole organization be more innovative, adaptable, and effective. Organization development can also help managers and staff personnel perform their tasks more effectively. It can provide the skills and knowledge necessary for establishing effective interpersonal relationships and building productive teams. It can show person- nel how to work effectively with others in diagnosing complex problems and in devising appropriate solutions. It can help others become committed to the solutions, thereby

CHAPTER 1 GENERAL INTRODUCTION TO ORGANIZATION DEVELOPMENT 7 increasing chances for their successful implementation. In short, OD is highly relevant to anyone having to work with and through others in organizations. 1-3 A Short History of Organization Development A brief history of OD will help to clarify the evolution of the term as well as some of the problems and confusion that have surrounded it. As currently practiced, OD emerged from five major backgrounds or stems, as shown in Figure 1.1. The first was the growth of the National Training Laboratories (NTL) and the development of training groups, otherwise known as sensitivity training or T-groups. The second stem of OD was the classic work on action research conducted by social scientists interested in applying research to managing change. An important feature of action research was a technique known as survey feedback. Kurt Lewin, a prolific theorist, researcher, and practitioner in group dynamics and social change, was instrumental in the development of T-groups, survey feedback, and action research. His work led to the creation of OD and still serves as a major source of its concepts and methods. The third stem reflects a normative view ®of OD. Rensis Likert’s participative management framework and Blake and Mouton’s Grid OD suggest a “one best way” to design and operate organizations. The fourth background is the approach focusing on productivity and the quality of work life. The fifth stem of OD, and the most recent influence on current practice, involves strate- gic change and organization transformation. FIGURE 1.1 The Five Stems of OD Practice © Cengage Learning

8 CHAPTER 1 GENERAL INTRODUCTION TO ORGANIZATION DEVELOPMENT 1-3a Laboratory Training Background This stem of OD pioneered laboratory training, or the T-group—a small, unstructured group in which participants learn from their own interactions and evolving group pro- cesses about such issues as interpersonal relations, personal growth, leadership, and group dynamics. Essentially, laboratory training began in the summer of 1946, when Kurt Lewin and his staff at the Research Center for Group Dynamics at the Massachusetts Institute of Technology (MIT) were asked by the Connecticut Interracial Commission and the Committee on Community Interrelations of the American Jewish Congress for help in research on training community leaders. A workshop was developed, and the community leaders were brought together to learn about leadership and to discuss problems. At the end of each day, the researchers discussed privately what behaviors and group dynamics they had observed. The community leaders asked permission to sit in on these feedback sessions. Reluctant at first, the researchers finally agreed. Thus, the first T-group was formed in which people reacted to data about their own behavior. The researchers drew two conclusions about this first T-group experiment: (1) feedback about group interaction was a rich learning experience and (2) the process of “group building” had potential for learning that could be transferred to “back-home” situations.12 As a result of this experience, the Office of Naval Research and the National Education Association provided financial backing to form the National Training Laboratories, and Gould Academy in Bethel, Maine, was selected as a site for further work (since then, Bethel has played an important part in NTL). The first Basic Skill Groups were offered in the summer of 1947. The program was so successful that the Carnegie Foundation provided support for programs in 1948 and 1949. This led to a permanent program for NTL within the National Education Association. In the 1950s, three trends emerged: (1) the emergence of regional laboratories, (2) the expansion of summer program sessions to year-round sessions, and (3) the expansion of the T-group into business and industry, with NTL members becoming increasingly involved with industry programs. Notable among these industry efforts was the pioneering work of Douglas McGregor at Union Carbide, of Herbert Shepard and Robert Blake at Esso Standard Oil (now ExxonMobil), of McGregor and Richard Beckhard at General Mills, and of Bob Tannenbaum at TRW Space Systems (now part of Northrop Grumman).13 Applications of T-group methods at these companies spawned the term “organization development” and, equally important, led corporate personnel and industrial relations specialists to expand their roles to offer internal consulting services to managers.14 Over time, T-groups have declined as an OD intervention. They are closely associated with that side of OD’s reputation as a “touchy-feely” process. NTL, as well as UCLA and Stanford, continues to offer T-groups to the public, a number of proprietary programs continue to thrive, and Pepperdine University and American University continue to utilize T-groups as part of master’s level OD practitioner education. The practical aspects of T-group techniques for organizations gradually became known as team building—a process for helping work groups become more effective in accomplishing tasks and satisfy- ing member needs. Team building is one of the most common OD interventions today. 1-3b Action Research and Survey-Feedback Background Kurt Lewin also was involved in the second movement that led to OD’s emergence as a practical field of social science. This second background refers to the processes of action research and survey feedback. The action research contribution began in the 1940s with studies conducted by social scientists John Collier, Kurt Lewin, and William Whyte. They discovered that research needed to be closely linked to action if organization

CHAPTER 1 GENERAL INTRODUCTION TO ORGANIZATION DEVELOPMENT 9 members were to use it to manage change. A collaborative effort was initiated between organization members and social scientists to collect research data about an organiza- tion’s functioning, to analyze it for causes of problems, and to devise and implement solutions. After implementation, further data were collected to assess the results, and the cycle of data collection and action often continued. The results of action research were twofold: Members of organizations were able to use research on themselves to guide action and change, and social scientists were able to study that process to derive new knowledge that could be used elsewhere. Among the pioneering action research studies were the work of Lewin and his stu- dents at the Harwood Manufacturing Company15 and the classic research by Lester Coch and John French on overcoming resistance to change.16 The latter study led to the devel- opment of participative management as a means of getting employees involved in planning and managing change. Other notable action research contributions included Whyte and Edith Hamilton’s famous study of Chicago’s Tremont Hotel17 and Collier’s efforts to apply action research techniques to improving race relations when he was commissioner of Indian affairs from 1933 to 1945.18 These studies did much to establish action research as integral to organization change. Today, it is the backbone of many OD applications. A key component of most action research studies was the systematic collection of survey data that were fed back to the client organization. Following Lewin’s death in 1947, his Research Center for Group Dynamics at MIT moved to Michigan and joined with the Survey Research Center as part of the Institute for Social Research. The institute was headed by Rensis Likert, a pioneer in developing scientific approaches to attitude surveys. His doctoral dissertation at Columbia University developed the widely used 5-point “Likert Scale.”19 In an early study by the institute, Likert and Floyd Mann administered a company- wide survey of management and employee attitudes at Detroit Edison.20 The feedback process that evolved was an “interlocking chain of conferences.” The major findings of the survey were first reported to the top management and then transmitted throughout the organization. The feedback sessions were conducted in task groups, with supervisors and their immediate subordinates discussing the data together. Although there was little substantial research evidence, the researchers intuitively felt that this was a powerful pro- cess for change. In 1950, eight accounting departments asked for a repeat of the survey, thus gener- ating a new cycle of feedback meetings. In four departments, feedback approaches were used, but the method varied; two departments received feedback only at the departmen- tal level; and because of changes in key personnel, nothing was done in the remaining two departments. A third follow-up study indicated that more significant and positive changes, such as job satisfaction, had occurred in the departments receiving feedback than in the two departments that did not participate. From those findings, Likert and Mann derived sev- eral conclusions about the effects of survey feedback on organization change. This led to extensive applications of survey-feedback methods in a variety of settings. The common pattern of data collection, data feedback, action planning, implementation, and follow-up data collection in both action research and survey feedback can be seen in these examples. 1-3c Normative Background The intellectual and practical advances from the laboratory training stem and the action research and survey-feedback stem were followed closely by the belief that a human rela- tions approach represented a “one best way” to manage organizations. This normative

10 CHAPTER 1 GENERAL INTRODUCTION TO ORGANIZATION DEVELOPMENT belief was exemplified in Likert’s Participative Management Program and Blake and Mouton’s Grid Organization Development approaches to organization improvement.21 Likert’s Participative Management Program characterized organizations as having one of four types of management systems:22 • Exploitive authoritative systems (System 1) exhibit an autocratic, top-down approach to leadership. Employee motivation is based on punishment and occa- sional rewards. Communication is primarily downward, and there is little lateral interaction or teamwork. Decision making and control reside primarily at the top of the organization. System 1 results in mediocre performance. • Benevolent authoritative systems (System 2) are similar to System 1, except that management is more paternalistic. Employees are allowed a little more interaction, communication, and decision making but within boundaries defined by management. • Consultative systems (System 3) increase employee interaction, communication, and decision making. Although employees are consulted about problems and deci- sions, management still makes the final decisions. Productivity is good, and employ- ees are moderately satisfied with the organization. • Participative group systems (System 4) are almost the opposite of System 1. Designed around group methods of decision making and supervision, this system fosters high degrees of member involvement and participation. Work groups are highly involved in setting goals, making decisions, improving methods, and appraising results. Com- munication occurs both laterally and vertically, and decisions are linked throughout the organization by overlapping group membership. System 4 achieves high levels of productivity, quality, and member satisfaction. Likert applied System 4 management to organizations using a survey-feedback process. The intervention generally started with organization members completing the Profile of Organizational Characteristics.23 The survey asked members for their opinions about both the present and ideal conditions of six organizational features: leadership, motivation, communication, decisions, goals, and control. In the second stage, the data were fed back to different work groups within the organization. Group members exam- ined the discrepancy between their present situation and their ideal, generally using Sys- tem 4 as the ideal benchmark, and generated action plans to move the organization toward System 4 conditions. Blake and Mouton’s Grid Organization Development originated from research about managerial and organizational effectiveness.24 Data gathered on organizational excellence from 198 organizations located in the United States, Japan, and Great Britain showed that the two foremost barriers to excellence were planning and communications.25 Each of these barriers was researched further to understand its roots, and the research resulted in a normative model of leadership—the Managerial Grid. According to the Managerial Grid, an individual’s style can be described according to his or her concern for production and concern for people.26 A concern for production covers a range of behaviors, such as accomplishing productive tasks, developing creative ideas, mak- ing quality policy decisions, establishing thorough and high-quality staff services, or creating efficient workload measurements. Concern for production is not limited to things but also may involve human accomplishment within the organization, regardless of the assigned tasks or activities. A concern for people encompasses a variety of issues, including concern for the individual’s personal worth, good working conditions, a degree of involvement or commitment to completing the job, security, a fair salary structure and fringe benefits, and good social and other relationships. Each dimension is measured on a nine-point scale and results in 81 possible leadership styles, ranging from 1,1 to 9,9.

CHAPTER 1 GENERAL INTRODUCTION TO ORGANIZATION DEVELOPMENT 11 For example, 1,9 managers have a low concern for production and a high concern for people: They view people’s feelings, attitudes, and needs as valuable in their own right. This type of manager strives to provide subordinates with work conditions that provide ease, security, and comfort. On the other hand, 9,1 managers have a high con- cern for production but a low concern for people: They minimize the attitudes and feel- ings of subordinates and give little attention to individual creativity, conflict, and commitment. As a result, the focus is on the work organization. Blake and Mouton proposed that the 9,9 managerial style is the most effective in overcoming the communications barrier to corporate excellence. The basic assumptions behind this managerial style differ qualitatively and quantitatively from those underlying the other managerial styles, which assume there is an inherent conflict between the needs of the organization and the needs of people. By showing a high concern for both people and production, managers allow employees to think and to influence the organization, thus promoting active support for organizational plans. Employee participation means that better communication is critical; therefore, necessary information is shared by all relevant parties. Moreover, better communication means self-direction and self-control, rather than unquestioning, blind obedience. Organizational commitment arises out of discussion, deliberation, and debate over major organizational issues. One of the most structured interventions in OD, Blake and Mouton’s Grid Organization Development has two key objectives: to improve planning by develop- ing a strategy for organizational excellence based on clear logic, and to help managers gain the necessary knowledge and skills to supervise effectively. It consists of six phases designed to analyze an entire business and to overcome the planning and communications barriers to corporate excellence. The first phase is the Grid Seminar, a one-week program where participants analyze their personal style and learn meth- ods of problem solving. Phase 2 consists of team development and Phase 3 involves intergroup development. In Phase 4, an ideal model of organizational excellence is developed and in Phase 5, the model is implemented. The final phase consists of an evaluation of the organization. Despite some research support, the normative approach to change has given way to a contingency view that acknowledges the influence of the external environment, tech- nology, and other forces in determining the appropriate organization design and man- agement practices. Still, Likert’s participative management and Blake and Mouton’s Grid OD frameworks are both used in organizations today. 1-3d Productivity and Quality-of-Work-Life Background The contribution of the productivity and quality-of-work-life (QWL) background to OD can be described in two phases. The first phase included the original projects developed in Europe in the 1950s and their emergence in the United States during the 1960s. Based on the research of Eric Trist and his colleagues at the Tavistock Institute of Human Relations in London, early practitioners in Great Britain, Ireland, Norway, and Sweden developed work designs aimed at better integrating technology and people.27 Referred to as “sociotechnical systems,” these QWL programs generally involved joint participa- tion by unions and management in the design of work and resulted in work designs giv- ing employees high levels of discretion, task variety, and feedback about results. Perhaps the most distinguishing characteristic of these QWL programs was the discovery of self- managing work groups as a form of work design. These groups were composed of mul- tiskilled workers who were given the necessary autonomy and information to design and manage their own task performances.

12 CHAPTER 1 GENERAL INTRODUCTION TO ORGANIZATION DEVELOPMENT As these programs migrated to America, a variety of concepts and techniques were adopted and the approach tended to be more mixed than in European practice. For example, two definitions of QWL emerged during its initial development.28 QWL was first defined in terms of people’s reaction to work, particularly individual outcomes related to job satisfaction and mental health. Using this definition, QWL focused primar- ily on the personal consequences of the work experience and how to improve work to satisfy personal needs. A second definition of QWL defined it as an approach or method.29 People defined QWL in terms of specific techniques and approaches used for improving work.30 It was viewed as synonymous with methods such as job enrichment, self-managed teams, and labor-management committees. This technique orientation derived mainly from the growing publicity surrounding QWL projects, such as the General Motors–United Auto Workers project at Tarrytown and the Gaines Pet Food plant project. These pioneering projects drew attention to specific approaches for improving work. The excitement and popularity of this first phase of QWL in the United States lasted until the mid-1970s, when other more pressing issues, such as inflation and energy costs, diverted national attention. However, starting in 1979, a second phase of QWL activity emerged. A major factor contributing to the resurgence of QWL was growing interna- tional competition faced by the United States in markets at home and abroad. It became increasingly clear that the relatively low cost and high quality of foreign-made goods resulted partially from the management practices used abroad, especially in Japan. Books extolling the virtues of Japanese management, such as Ouchi’s Theory Z,31 made best-seller lists. As a result, QWL programs expanded beyond their initial focus on work design to include other features of the workplace that can affect employee productivity and satis- faction, such as reward systems, work flows, management styles, and the physical work environment. This expanded focus resulted in larger-scale and longer-term projects than had the early job enrichment programs and shifted attention beyond the individual worker to work groups and the larger work context. Equally important, it added the crit- ical dimension of organizational efficiency to what had been up to that time a primary concern for the human dimension. At one point, the productivity and QWL approach became so popular that it was called an ideological movement. This was particularly evident in the spread of quality circles within many companies. Popularized in Japan, quality circles are groups of employees trained in problem-solving methods that meet regularly to resolve work envi- ronment, productivity, and quality-control concerns and to develop more efficient ways of working. At the same time, many of the QWL programs started in the early 1970s were achieving success. Highly visible corporations, such as General Motors, Ford, and Honeywell, and unions, such as the United Automobile Workers, the Oil, Chemical, and Atomic Workers, the Communications Workers of America, and the Steelworkers, were more willing to publicize their QWL efforts. In 1980, for example, more than 1,800 people attended an international QWL conference in Toronto, Canada. Unlike pre- vious conferences, which were dominated by academics, the presenters at Toronto were mainly managers, workers, and unionists from private and public corporations. Today, this second phase of QWL activity continues primarily under the banner of “employee involvement” (EI) as well as total quality management and Six Sigma programs, rather than of QWL. For many OD practitioners, the term EI signifies, more than the name QWL, the growing emphasis on how employees can contribute more to running the orga- nization so it can be more flexible, productive, and competitive. Recently, the term “employee empowerment” has been used interchangeably with the term EI, the former

CHAPTER 1 GENERAL INTRODUCTION TO ORGANIZATION DEVELOPMENT 13 suggesting the power inherent in moving decision making downward in the organization.32 Employee empowerment may be too restrictive, however. Because it draws attention to the power aspects of these interventions, it may lead practitioners to neglect other important elements needed for success, such as information, skills, and rewards. Consequently, EI seems broader and less restrictive than does employee empowerment as a banner for these approaches to organizational improvement. 1-3e Strategic Change Background The strategic change background is a recent influence on OD’s evolution. As organizations have become more global and information intensive and their environments have become more complex and uncertain, the scale and intricacies of organizational change have increased. These trends have produced the need for a strategic perspective on OD and encouraged planned change processes at the organization and multiorganization levels.33 Strategic change involves improving the alignment among an organization’s design, strategy, and environment.34 Strategic change interventions seek to improve both the organization’s relationship to its environment and the fit among its technical, structural, informational, human resource, and cultural components.35 The need for strategic change is usually triggered by some major disruption to the organization, such as the lifting of regulatory requirements, a technological breakthrough, or a new chief executive officer coming in from outside the organization.36 One of the first applications of strategic change was Richard Beckhard’s use of open- systems planning.37 He focused on an organization’s environment and strategy. Based on the organization’s core mission, the differences between what the environment demanded and how the organization responded could be reduced and performance improved. Since then, change agents have proposed a variety of large-scale or strategic-change models;38 each of these approaches recognizes that strategic change is often driven from the top by powerful executives, involves multiple levels of the organization and a change in its culture, and has important effects on performance. More recently, strategic approaches to OD have been extended beyond the boundaries of a single organization to include mergers and acquisitions, strategic alliances among firms, and network development.39 The strategic change background has significantly influenced OD practice. For example, implementing strategic change requires OD practitioners to be familiar with competitive strategy, finance, and marketing, as well as team building, action research, and survey feedback. Together, these skills have improved OD’s relevance to organiza- tions and their managers. 1-4 Evolution in Organization Development Current practice in organization development is strongly influenced by these five back- grounds as well as by the trends shaping change in organizations. The laboratory training, action research and survey feedback, normative, and QWL roots of OD are evident in the strong humanistic focus that underlies its practice. The more recent influence of the strate- gic change background has greatly improved the relevance and rigor of OD practice. They have added financial and economic indicators of effectiveness to OD’s traditional measures of work satisfaction and personal growth. All of the backgrounds support the transfer of knowledge and skill to the organization so it can better manage change in the future. Today, the field increasingly is being influenced by the globalization and informa- tion technology trends described earlier. OD is being carried out in many more countries and in many more organizations operating on a worldwide basis. This is generating a

14 CHAPTER 1 GENERAL INTRODUCTION TO ORGANIZATION DEVELOPMENT whole new set of interventions as well as modifications to traditional OD practice.40 In addition, OD is adapting its methods to the technologies being used in organizations. As information technology continues to influence organizations and their environments, OD is managing change processes in cyberspace as well as face-to-face. The diversity of this evolving discipline has led to tremendous growth in the number of professional OD practitioners, in the kinds of organizations involved with OD, in the range of countries within which OD is practiced, and in the kinds of interventions used to change and improve organizations. The expansion of the OD Network (www.odnetwork.org), which began in 1964, is one indication of this growth. It has grown from 200 members in 1970 to 1,554 in 2012. At the same time, Division 14 of the American Psychological Association, formerly known as the Division of Industrial Psychology, changed its title to the Society for Industrial and Organizational Psychology (www.siop.org) in 1982. In 2012, the Society had over 8,000 members worldwide. In 1968, the American Society for Training & Development (www. astd.org) set up an OD division, which currently operates as the Human Capital Commu- nity of Practice with more than 2,000 members. In 1971, the Academy of Management established an Organization Development and Change Division (http://division.aom online.org/odc), which currently has more than 2,300 members. Pepperdine University (www.pepperdine.edu), Bowling Green State University (www.bgsu.edu), and Case West- ern Reserve University (www.cwru.edu) offered the first master’s degree programs in OD in 1975, and Case Western Reserve University began the first doctoral program in OD. Organization development now is being taught at the graduate and undergraduate levels in a large number of universities.41 Many different organizations have undertaken a wide variety of OD efforts. In many cases, organizations have been at the forefront of innovating new change techniques and methods as well as new organizational forms. Larger corporations that have engaged in organization development include General Electric, Boeing, Kaiser Permanente, Texas Instruments, American Airlines, DuPont, Intel, Hewlett-Packard, Microsoft, General Foods, Procter & Gamble, IBM, Raytheon, Wells Fargo Bank, the Hartford Financial Services, and Limited Brands. Traditionally, much of the work was considered confiden- tial and was not publicized. Today, however, organizations increasingly are going public with their OD efforts, sharing the lessons with others. OD work also is being done in schools, communities, and local, state, and federal governments. Several reviews of OD projects have been directed at OD in public admin- istration.42 Extensive OD work was done in the armed services, including the army, navy, air force, and coast guard, although OD activity and research activities have ebbed and flowed with changes in the size and scope of the military. Public schools began using both group training and survey feedback relatively early in the history of OD.43 Usually, the projects took place in suburban middle-class schools, where stresses and strains of an urban environment were not prominent and ethnic and socioeconomic differences between consultants and clients were not high. In more recent years, OD methods have been extended to urban schools and to colleges and universities. Organization development is increasingly international. It has been applied in nearly every country in the world. These efforts have involved such organizations as Saab (Sweden), Imperial Chemical Industries (England), Orrefors (Sweden), Akzo-Nobel (The Netherlands), the Beijing Arbitration Commission and Neusoft Corporation (China), Air New Zealand, and Vitro (Mexico). Although it is evident that OD has expanded vastly in recent years, relatively few of the total number of organizations in the United States are actively involved in formal OD programs. However, many organizations are applying OD approaches and techni- ques without using that term explicitly.

CHAPTER 1 GENERAL INTRODUCTION TO ORGANIZATION DEVELOPMENT 15 1-5 Overview of the Book This book presents the process and practice of organization development in a logical flow, as shown in Figure 1.2. Part 1 provides an overview of OD that describes the process of planned change and those who perform the work. It consists of two chapters. Chapter 2 FIGURE 1.2 Overview of the Book © Cengage Learning 2015

16 CHAPTER 1 GENERAL INTRODUCTION TO ORGANIZATION DEVELOPMENT discusses the nature of planned change and presents some models describing the change process. Planned change is viewed as an ongoing cycle of four activities: entering and con- tracting, diagnosing, planning and implementing, and evaluating and institutionalizing. Chapter 3 describes the OD practitioner and provides insight into the knowledge and skills needed to practice OD and the kinds of career issues that can be expected. Part 2 is composed of six chapters that describe the process of organization develop- ment. Chapter 4 characterizes the first activity in this process: entering an organizational system and contracting with it for organization development work. Chapters 5 and 6 present the steps associated with the next major activity of the OD process: diagnosing. This involves helping the organization understand its current functioning and discover areas for improvement. Chapter 5 presents an open-systems model to guide diagnosis at three levels of analysis: the total organization, the group or department, and the indi- vidual job or position. Chapter 6 reviews methods for collecting, analyzing, and feeding back diagnostic data. Chapters 7 and 8 address issues concerned with the third activity: designing OD interventions and implementing change. Chapter 7 presents an overview of the intervention design process. Major kinds of interventions are identified, and the specific approaches that make up the next four parts of the book are introduced. Chapter 8 discusses the process of leading and managing change. It identifies key factors contrib- uting to the successful implementation of change programs. Chapter 9 describes the final activity of the planned change process: evaluating OD interventions and establishing them as a permanent part of organizational functioning. Parts 3 through 6 present the major interventions used in OD today. Part 3 (Chap- ters 10 and 11) is concerned with human process interventions aimed at the social pro- cesses occurring within organizations. These are the oldest and most traditional interventions in OD. Chapter 10 describes interpersonal and group process approaches, such as process consultation, third-party interventions, and team building. Chapter 11 presents more system-wide process approaches, such as organizational confrontation meetings, intergroup relations, and large group interventions. Part 4 (Chapters 12, 13, and 14) reviews technostructural interventions that are aimed at organization structure and at better integrating people and technology. Chapter 12 is about restructuring organizations; it describes the alternative methods of organizing work activities as well as processes for downsizing and reengineering the organization. Chapter 13 presents interventions for improving employee involvement. These change programs increase employee knowledge, power, information, and rewards through paral- lel structures, total quality management, and high-involvement organizations. Chapter 14 describes change programs directed at work design, both of individual jobs and of work groups, for greater employee satisfaction and productivity. Part 5 (Chapters 15, 16, and 17) presents human resource management interven- tions that are directed at integrating people into the organization. These interventions are associated traditionally with the human resource function in the organization and increasingly have become a part of OD activities. Chapter 15 concerns the process of performance management. This is a cycle of activities that helps groups and individuals to set goals, appraise work, and reward performance. Chapter 16 discusses interven- tions that manage human talent in the organization, including coaching, career plan- ning and development, and management and leadership development. Chapter 17 presents two interventions that address and leverage workforce diversity and improve employee wellness. Part 6 (Chapters 18, 19, and 20) concerns strategic interventions that focus on orga- nizing the firm’s resources to gain a competitive advantage in the environment. These

CHAPTER 1 GENERAL INTRODUCTION TO ORGANIZATION DEVELOPMENT 17 change programs generally are managed from the top of the organization and take con- siderable time, effort, and resources. Chapter 18 presents three interventions having to do with organization transformation, including organization design, integrated strategic change, and culture change. Chapter 19 describes continuous change interventions, including dynamic strategy making, self-design, organization learning, and creating built-to-change organizations. Finally, Chapter 20 describes three transorganizational interventions: merger-and-acquisition integration processes, alliance formation and man- agement, and network development and change. Part 7 (Chapters 21, 22, and 23) is concerned with special topics in OD. Chapter 21 describes the growing application of OD to building sustainable management organiza- tions and global social change organizations. Chapter 22 presents broad applications of OD in different kinds of organizations, including educational, government, family- owned, and health care agencies. Finally, Chapter 23 examines the future of organization development, including the trends affecting the field and the prospects for its influence on organization effectiveness. SUMMARY This chapter introduced OD as a planned change dis- definitions. The history of OD reveals its five roots: cipline concerned with applying behavioral science laboratory training, action research and survey feed- knowledge and practices to help organizations achieve back, normative approaches, productivity and quality greater effectiveness. Managers and staff specialists of work life, and strategic change. The current practice must work with and through people to achieve organi- of OD goes far beyond its humanistic origins by incor- zational objectives, and OD can help them form effec- porating concepts from organization strategy and tive relationships with others. Organizations are faced design that complement the early emphasis on social with rapidly accelerating change, and OD can help processes. The continued growth in the number and them cope with the consequences of change. The con- diversity of OD approaches, practitioners, and involved cept of OD has multiple meanings. The definition pro- organizations attests to the health of the discipline and vided here resolved some of the problems with earlier offers a favorable prospect for the future. NOTES 6. W. Burke and D. Bradford, “The Crisis in OD,” in Reinventing Organization Development, ed. D. Bradford and W. Burke 1. C. Worley and A. Feyerherm, “Reflections on the Future (San Francisco: John Wiley & Sons, 2005): 1–14. of OD,” Journal of Applied Behavioral Science 39 (2003): 97–115. 7. R. Paton and J. McCalman, Change Management, 3rd ed. (Thousand Oaks, CA: Sage Publications, 2010); N. Worren, 2. W. Burke, Organization Development: Principles and K. Ruddle, and K. Moore, “From Organization Develop- Practices (Boston: Little, Brown, 1982). ment to Change Management: The Emergence of a New Profession,” Journal of Applied Behavioral Science 35 3. W. French, “Organization Development: Objectives, (1999): 273–86; J. Hayes, The Theory and Practice of Assumptions, and Strategies,” California Management Change Management (New York: Palgrave, 2002). Review 12, no. 2 (1969): 23–34. 8. G. Hamel, The Future of Management (Boston: Harvard 4. R. Beckhard, Organization Development: Strategies and Business School Press, 2007); W. Burke, Organization Models (Reading, MA: Addison-Wesley, 1969). 5. M. Beer, Organization Change and Development: A Systems View (Santa Monica, CA: Goodyear Publishing, 1980).

18 CHAPTER 1 GENERAL INTRODUCTION TO ORGANIZATION DEVELOPMENT Change (Newbury Park, CA: Sage Publications, 2002); 18. J. Collier, “United States Indian Administration as a Lab- D. Watts, Six Degrees (New York: W. W. Norton, 2003); oratory of Ethnic Relations,” Social Research 12 (May S. Chowdhury, ed., Organization 21C (Upper Saddle 1945): 275–76. River, NJ: Financial Times Prentice Hall, 2002); B. Jones and M. Brazzel, eds., The NTL Handbook of Organization 19. French, “Emergence and Early History,” 19–20. Development and Change (San Francisco: John Wiley & Sons, 2006). 20. F. Mann, “Studying and Creating Change,” in The Plan- 9. T. Friedman, The World Is Flat (New York: Farrar, ning of Change: Readings in the Applied Behavioral Straus, and Giroux, 2006); J. Perkins, Confessions of an Sciences, ed. W. Bennis, K. Benne, and R. Chin (New Economic Hit Man (San Francisco: Berrett-Koehler, York: Holt, Rinehart, & Winston, 1962), 605–15. 2005); A. Chua, World on Fire (New York: Doubleday, 2002); International Forum on Globalization, Alternatives 21. R. Likert, The Human Organization (New York: to Economic Globalization (San Francisco: Berrett- McGraw-Hill, 1967); S. Seashore and D. Bowers, “Dura- Koehler, 2002). bility of Organizational Change,” American Psychologist 10. E. Brynjolfsson and A. McAfee, Race Against the 25 (1970): 227–33; D. Mosley, “System Four Revisited: Machine: How the Digital Revolution is Accelerating Inno- Some New Insights,” Organization Development Journal vation, Driving Productivity, and Irreversibly Transform- 5 (Spring 1987): 19–24; R. Blake and J. Mouton, The ing Employment and the Economy (New York: Digital Managerial Grid (Houston: Gulf, 1964); R. Blake and Frontier Press, 2012); A. McAffee, Enterprise 2.0: New J. Mouton, Corporate Excellence Through Grid Organiza- Collaborative Tools for Your Organization’s Toughest tion Development: A Systems Approach (Houston: Gulf, Challenges (Cambridge, MA: Harvard Business School 1968); R. Blake and J. Mouton, Building a Dynamic Cor- Press, 2009). poration Through Grid Organization Development (Read- 11. M. Anderson, ed., Fast Cycle Organization Development ing, MA: Addison-Wesley, 1969). (Cincinnati: South-Western College Publishing, 2000); M. Hammer and J. Champy, Reengineering the Corpora- 22. Likert, Human Organization. tion (New York: HarperCollins, 1993); P. Senge, The 23. Ibid. Fifth Discipline (New York: Doubleday, 1990). 24. Blake and Mouton, The Managerial Grid; Blake and 12. A. Kleiner, The Age of Heretics (New York: Doubleday, 1996); A. Freedman, “The History of Organization Devel- Mouton, Corporate Excellence; Blake and Mouton, Building opment and the NTL Institute: What We Have Learned, a Dynamic Corporation; R. Blake and A. McCanse, Leader- Forgotten, and Rewritten,” Psychologist-Manager Journal ship Dilemmas—Grid Solutions (Houston: Gulf, 1991). 3 (1999): 125–41; L. Bradford, “Biography of an Institu- tion,” Journal of Applied Behavioral Science 3 (1967): 127; 25. Blake and Mouton, Corporate Excellence. A. Marrow, “Events Leading to the Establishment of the National Training Laboratories,” Journal of Applied 26. Blake and Mouton, Managerial Grid. Behavioral Science 3 (1967): 145–50. 13. Kleiner, Age of Heretics; M. Mortara, “Organization 27. A. Rice, Productivity and Social Organization: The Ahmedabad Development and Change at TRW Space Technology Experiment (London: Tavistock Publications, 1958); E. Trist Laboratories” (unpublished master’s thesis, Pepperdine and K. Bamforth, “Some Social and Psychological Conse- University, 2003). quences of the Longwall Method of Coal-Getting,” Human 14. W. French, “The Emergence and Early History of Orga- Relations 4 (January 1951): 1–38; P. Gyllenhamer, People at nization Development with Reference to Influences upon Work (Reading, MA: Addison-Wesley, 1977); E. Thorsrud, and Interactions among Some of the Key Actors,” in Con- B. Sorensen, and B. Gustavsen, “Sociotechnical Approach to temporary Organization Development: Current Thinking Industrial Democracy in Norway,” in Handbook of Work and Applications, ed. D. Warrick (Glenview, IL: Scott, Organization and Society, ed. R. Dubin (Chicago: Rand Foresman, 1985): 12–27. McNally, 1976): 648–87; Work in America: Report of a Special 15. A. Marrow, D. Bowers, and S. Seashore, Management by Task Force to the Secretary of Health, Education, and Welfare Participation (New York: Harper & Row, 1967). (Cambridge, MA: MIT Press, 1973); L. Davis and A. Cherns, 16. L. Coch and J. French, “Overcoming Resistance to eds., The Quality of Working Life, 2 vols. (New York: Free Change,” Human Relations 1 (1948): 512–32. Press, 1975). 17. W. Whyte and E. Hamilton, Action Research for Manage- ment (Homewood, IL: Irwin-Dorsey, 1964). 28. D. Nadler and E. Lawler III, “Quality of Work Life: Per- spectives and Directions” (working paper, Center for Effective Organizations, University of Southern Califor- nia, Los Angeles, 1982); L. Davis, “Enhancing the Quality of Work Life: Developments in the United States,” International Labour Review 116 (July–August 1977): 53–65; L. Davis, “Job Design and Productivity: A New Approach,” Personnel 33 (1957): 418–30. 29. Ibid.

CHAPTER 1 GENERAL INTRODUCTION TO ORGANIZATION DEVELOPMENT 19 30. R. Ford, “Job Enrichment Lessons from AT&T,” Harvard and Development, vol. 3, ed. R. Woodman and W. Pasmore Business Review 51 (January–February 1973): 96–106; (Greenwich, CT: JAI Press, 1989), 83–116; J. Bartunek and J. Taylor, J. Landy, M. Levine, and D. Kamath, Quality M. Louis, “The Interplay of Organization Development of Working Life: An Annotated Bibliography, 1957–1972 and Organization Transformation,” in Research in (Center for Organizational Studies, Graduate School of Organizational Change and Development, vol. 2, ed. Management, University of California at Los Angeles, W. Pasmore and R. Woodman (Greenwich, CT: JAI 1972); J. Taylor, “Experiments in Work System Design: Press, 1988), 97–134; A. Levy and U. Merry, Organiza- Economic and Human Results,” Personnel Review 6 tional Transformation: Approaches, Strategies, Theories (1977): 28–37; J. Taylor, “Job Satisfaction and Quality of (New York: Praeger, 1986). Working Life: A Reassessment,” Journal of Occupational 39. M. Marks and P. Mirvis, Joining Forces (San Francisco: Psychology 50 (December 1977): 243–52. Jossey-Bass, 1998). 40. A. Jaeger, “Organization Development and National Cul- 31. W. Ouchi, Theory Z (Reading, MA: Addison-Wesley, ture: Where’s the Fit?” Academy of Management Review 1981). 11 (1986): 178; G. Hofstede, Culture’s Consequences: International Differences in Work-Related Values 32. J. Vogt and K. Murrell, Empowerment in Organizations (London: Sage, 1980); P. Sorensen Jr., T. Head, (San Diego: University Associates, 1990). N. Mathys, J. Preston, and D. Cooperrider, Global and International Organization Development (Champaign, 33. M. Jelinek and J. Litterer, “Why OD Must Become Stra- IL: Stipes, 1995); A. Chin (with C. Chin), Internationaliz- tegic,” in Research in Organizational Change and Devel- ing OD: Cross-Cultural Experiences of NTL Members opment, vol. 2, ed. W. Pasmore and R. Woodman (Alexandria, VA: NTL Institute, 1997). (Greenwich, CT: JAI Press, 1988), 135–62; P. Buller, “For Successful Strategic Change: Blend OD Practices 41. G. Varney and A. Darrow, “Market Position of Master- with Strategic Management,” Organizational Dynamics Level Graduate Programs in OD,” OD Practitioner 27 (Winter 1988): 42–55; C. Worley, D. Hitchin, and (1995): 39–43; OD Institute, International Registry of W. Ross, Integrated Strategic Change (Reading, MA: O.D. Professionals and O.D. Handbook (Cleveland: OD Addison-Wesley, 1996). Institute, 1995); G. Varney and A. Darrow, “Name Rec- ognition of Master’s Level Graduate Programs in Organi- 34. Worley, Hitchin, and Ross, Integrated Strategic Change; zation Development and Change,” OD Practitioner 30 N. Rajagopalan and G. Spreitzer, “Toward a Theory of (1998): 36–40. Strategic Change: A Multi-Lens Perspective and Integra- tive Framework,” Academy of Management Review 22 42. R. Golembiewski and G. Brewer, “The Status of OD in (1997): 48–79. Public Administration: Another Case of Practice Being Ahead of Theory,” in Handbook of Organization Develop- 35. R. Beckhard and R. Harris, Organizational Transitions: Man- ment, ed. T. Cummings (Los Angeles: Sage Publications, aging Complex Change, 2nd ed. (Reading, MA: Addison- 2008): 541–51; R. Golembiewski, C. Proehl, and D. Sink, Wesley, 1987); N. Tichy, Managing Strategic Change (New “Success of OD Applications in the Public Sector, Toting York: John Wiley & Sons, 1983); E. Schein, Organizational Up the Score for a Decade, More or Less,” Public Admin- Culture and Leadership (San Francisco: Jossey-Bass, 1985); istration Review 41 (1981): 679–82; R. Golembiewski, C. Lundberg, “Working with Culture,” Journal of Organiza- Humanizing Public Organizations (Mt. Airy, MD: tion Change Management 1 (1988): 38–47. Lomond, 1985); P. Robertson and S. Seneviratne, “Out- comes of Planned Organization Change in the Public 36. D. Miller and P. Freisen, “Momentum and Revolution in Sector: A Meta-Analytic Comparison to the Private,” Organization Adaptation,” Academy of Management Jour- Public Administration Review 55 (1995): 547–61. nal 23 (1980): 591–614; M. Tushman and E. Romanelli, “Organizational Evolution: A Metamorphosis Model of 43. R. Shmuck and M. Miles, Organizational Development in Convergence and Reorientation,” in Research in Organiza- Schools (Palo Alto, CA: National Press Books, 1971); tional Behavior, vol. 7, ed. L. Cummings and B. Staw R. Havelock, The Change Agent’s Guide to Innovation in (Greenwich, CT: JAI Press, 1985), 171–222. Education (Englewood Cliffs, NJ: Educational Technology, 1973); R. Schmuck and P. Runkel, “Organization Develop- 37. Beckhard and Harris, Organizational Transitions. ment in Schools,” Consultation 4 (Fall 1985): 236–57; 38. T. Covin and R. Kilmann, “Critical Issues in Large-Scale S. Mohrman and E. Lawler, “Motivation for School Reform” (working paper, Center for Effective Organizations, Univer- Organization Change,” Journal of Organization Change sity of Southern California, Los Angeles, 1995). Management 1 (1988): 59–72; A. Mohrman, S. Mohrman, G. Ledford Jr., T. Cummings, and E. Lawler, eds., Large-Scale Organization Change (San Francisco: Jossey-Bass, 1989); W. Torbert, “Leading Organizational Transformation,” in Research in Organizational Change

PART 1 OVERVIEW OF ORGANIZATION DEVELOPMENT 2 The Nature of Planned Change 3 The Organization Development Practitioner 20 © Pixmann/Imagezoo/Getty Images

© Pixmann/Imagezoo/ 2 Getty Images The Nature of Planned Change learning Describe and compare three major theories of planned change. objectives Introduce a general model of planned change that will be used to organize the material presented in the book. Explain how planned change can be adopted to fit different contexts. Critique the practice of planned change. The pace of global, economic, and technologi- the different stages through which planned cal development makes change an inevitable change may be effected in organizations and feature of organizational life. However, explain the temporal process of applying OD change that happens to an organization can be dis- methods to help organization members manage tinguished from change that is planned by its mem- change. In this chapter, we first describe and bers. In this book, the term change will refer to compare three major theories of organization planned change. Organization development (OD) change that have received considerable is directed at bringing about planned change to attention in the field: Lewin’s change model, increase an organization’s effectiveness and capa- the action research model, and the positive bility to change itself. It is generally initiated and model. Next, we present a general model of implemented by managers, often with the help of planned change that integrates the earlier an OD practitioner from either inside or outside of models and incorporates recent conceptual the organization. Organizations can use planned advances in OD. The general model has broad change to solve problems, to learn from experi- applicability to many types of planned change ence, to reframe shared perceptions, to adapt to efforts and serves to organize the chapters in external environmental changes, to improve perfor- this book. We then discuss different types of mance, and to influence future changes. change and how the process can vary depending on the change situation. Finally, we All approaches to OD rely on some theory present several critiques of planned change. about planned change. The theories describe 21

22 PART 1 OVERVIEW OF ORGANIZATION DEVELOPMENT 2-1 Theories of Planned Change Conceptions of planned change have tended to focus on how change can be implemented in organizations.1 Called “theories of changing,” these frameworks describe the activities that must take place to initiate and carry out successful organizational change. In this section, we describe and compare three theories of changing: Lewin’s change model, the action research model, and the positive model. These frameworks have received widespread attention in OD and serve as the primary basis for a general model of planned change. 2-1a Lewin’s Change Model One of the earliest models of planned change was provided by Kurt Lewin.2 He conceived of change as modification of those forces keeping a system’s behavior sta- ble. Specifically, a particular set of behaviors at any moment in time is the result of two groups of forces: those striving to maintain the status quo and those pushing for change. When both sets of forces are about equal, current behaviors are maintained in what Lewin termed a state of “quasi-stationary equilibrium.” To change that state, one can increase those forces pushing for change, decrease those forces maintaining the current state, or apply some combination of both. For example, the level of perfor- mance of a work group might be stable because group norms maintaining that level are equivalent to the supervisor’s pressures for change to higher levels. This level can be increased either by changing the group norms to support higher levels of perfor- mance or by increasing supervisor pressures to produce at higher levels. Lewin sug- gested that decreasing those forces maintaining the status quo produces less tension and resistance than increasing forces for change and consequently is a more effective change strategy. Lewin viewed this change process as consisting of the following three steps, which are shown in Figure 2.1(A): 1. Unfreezing. This step usually involves reducing those forces maintaining the orga- nization’s behavior at its present level. Unfreezing is sometimes accomplished through a process of “psychological disconfirmation.” By introducing information that shows discrepancies between behaviors desired by organization members and those behaviors currently exhibited, members can be motivated to engage in change activities.3 2. Moving. This step shifts the behavior of the organization, department, or individual to a new level. It involves intervening in the system to develop new behaviors, values, and attitudes through changes in organizational structures and processes. 3. Refreezing. This step stabilizes the organization at a new state of equilibrium. It is frequently accomplished through the use of supporting mechanisms that reinforce the new organizational state, such as organizational culture, rewards, and structures. Lewin’s model provides a general framework for understanding organizational change. Because the three steps of change are relatively broad, considerable effort has gone into elaborating them. For example, the planning model developed by Lippitt, Watson, and Westley arranges Lewin’s model into seven steps: scouting, entry, diagnosis (unfreezing), planning, action (moving), stabilization and evaluation, and termination (refreezing).4 Similarly, Kotter’s eight-stage process can be mapped onto Lewin’s phases: establishing a sense of urgency, creating the guiding coalition, developing a vision and strategy, and communicating the change vision (unfreezing); empowering broad-based action, generating short-term wins (moving); and consolidating gains and producing

CHAPTER 2 THE NATURE OF PLANNED CHANGE 23 FIGURE 2.1 Comparison of Planned Change Models © Cengage Learning more change, and anchoring new approaches in the culture (refreezing).5 Lewin’s model remains closely identified with the field of OD, however, and is used to illustrate how other types of change can be implemented. For example, Lewin’s three-step model has been used to explain how information technologies can be implemented more effectively.6

24 PART 1 OVERVIEW OF ORGANIZATION DEVELOPMENT 2-1b Action Research Model The classic action research model focuses on planned change as a cyclical process in which initial research about the organization provides information to guide subsequent action. Then the results of the action are assessed to provide further information to guide further action, and so on. This iterative cycle of research and action involves consider- able collaboration among organization members and OD practitioners. It places heavy emphasis on data gathering and diagnosis prior to action planning and implementation, as well as careful evaluation of results after action is taken. Action research is traditionally aimed both at helping specific organizations imple- ment planned change and at developing more general knowledge that can be applied to other settings.7 Although action research was originally developed to have this dual focus on change and knowledge generation, it has been adapted to OD efforts in which the major emphasis is on planned change.8 Figure 2.1(B) shows the cyclical phases of planned change as defined by the original action research model. There are eight main steps. 1. Problem identification. This stage usually begins when an executive in the organi- zation or someone with power and influence senses that the organization has one or more problems that might be solved with the help of an OD practitioner. 2. Consultation with a behavioral science expert. During the initial contact, the OD practitioner and the client carefully assess each other. The practitioner has his or her own normative, developmental theory or frame of reference and must be conscious of those assumptions and values.9 Sharing them with the client from the beginning establishes an open and collaborative atmosphere. 3. Data gathering and preliminary diagnosis. This step is usually completed by the OD practitioner, often in conjunction with organization members. It involves gath- ering appropriate information and analyzing it to determine the underlying causes of organizational problems. The four basic methods of gathering data are interviews, process observation, questionnaires, and organizational performance data (unfortu- nately, often overlooked). One approach to diagnosis begins with observation, pro- ceeds to a semistructured interview, and concludes with a questionnaire to measure precisely the problems identified by the earlier steps.10 When gathering diagnostic information, OD practitioners may influence members from whom they are collect- ing data. In OD, any action by the OD practitioner can be viewed as an intervention that will have some effect on the organization.11 4. Feedback to a key client or group. Because action research is a collaborative activity, the diagnostic data are fed back to the client, usually in a group or work-team meeting. The feedback step, in which members are given the information gathered by the OD practitioner, helps them determine the strengths and weaknesses of the organization or unit under study. The consultant provides the client with all relevant and useful data. Obviously, the practitioner will protect confidential sources of information and, at times, may even withhold data. Defining what is relevant and useful involves consider- ation of privacy and ethics as well as judgment about whether the group is ready for the information or if the information would make the client overly defensive. 5. Joint diagnosis of the problem. At this point, members discuss the feedback and explore with the OD practitioner whether they want to work on identified problems. A close interrelationship exists among data gathering, feedback, and diagnosis because the consultant summarizes the basic data from the client members and presents the data to them for validation and further diagnosis. An important point to remember, as Schein suggests, is that the action research process is very different from the doctor–patient model, in which the consultant comes in, makes a diagnosis, and

CHAPTER 2 THE NATURE OF PLANNED CHANGE 25 prescribes a solution. Schein notes that the failure to establish a common frame of reference in the client–consultant relationship may lead to a faulty diagnosis or to a communication gap whereby the client is sometimes “unwilling to believe the diagno- sis or accept the prescription.” He believes that “most companies have drawers full of reports by consultants, each loaded with diagnoses and recommendations which are either not understood or not accepted by the ‘patient.’”12 6. Joint action planning. Next, the OD practitioner and the client members jointly agree on further actions to be taken. This is the beginning of the moving process (described in Lewin’s change model), as the organization decides how best to reach a different quasi-stationary equilibrium. At this stage, the specific action to be taken depends on the culture, technology, and environment of the organization; the diag- nosis of the problem; and the time and expense of the intervention. 7. Action. This stage involves the actual change from one organizational state to another. It may include installing new methods and procedures, reorganizing struc- tures and work designs, and reinforcing new behaviors. Such actions typically can- not be implemented immediately but require a transition period as the organization moves from the present to a desired future state.13 8. Data gathering after action. Because action research is a cyclical process, data must also be gathered after the action has been taken to measure and determine the effects of the action and to feed the results back to the organization. This, in turn, may lead to rediagnosis and new action. The action research model underlies most current approaches to planned change and is often considered synonymous with OD. Recently, it has been refined and extended to new settings and applications, and consequently, researchers and practi- tioners have made requisite adaptations of its basic framework.14 Trends in the application of action research include movement from smaller sub- units of organizations to total systems and communities.15 In these larger contexts, action research is more complex and political than in smaller settings. Therefore, the action research cycle is coordinated across multiple change processes and includes a diversity of stakeholders who have an interest in the organization. (We describe these applications more thoroughly in Chapters 18, 19, and 20.) Action research also is applied increasingly in international settings, particularly in developing nations in the Southern Hemisphere.16 Embedded within the action research model, however, are “Northern Hemisphere” assumptions about change. For example, action research traditionally views change more linearly than do Asian cultures, and it treats the change process more collaboratively than do Latin American and African nations. To achieve success in these settings, action research is tailored to fit cultural assumptions. (See section “2–3 Different Types of Planned Change.”) Finally, action research is applied increasingly to promote social change and innovation, as demonstrated most clearly in community develop- ment and global social change projects.17 These applications are heavily value laden and seek to redress imbalances in power and resource allocations across different groups. Action researchers tend to play an activist role in the change process, which is often chaotic and conflictual. (Chapter 21 reviews global social change processes.) In light of these general trends, contemporary applications of action research have substantially increased the degree of member involvement in the change process. This con- trasts with traditional approaches to planned change, whereby consultants carried out most of the change activities, with the agreement and collaboration of management.18 Although consultant-dominated change still persists in OD, there is a growing tendency to involve organization members in learning about their organization and how to change it. Referred

26 PART 1 OVERVIEW OF ORGANIZATION DEVELOPMENT to as “participatory action research,” “action learning,” “action science,” or “self-design,” this approach to planned change emphasizes the need for organization members to learn firsthand about planned change if they are to gain the knowledge and skills needed to change the organization.19 In today’s complex and changing environment, some argue that OD must go beyond solving particular problems to helping members gain the compe- tence needed to change and improve the organization continually.20 In this modification of action research, the role of OD consultants is to work with members to facilitate the learning process. Both parties are “colearners” in diagnosing the organization, designing changes, and implementing and assessing them.21 Neither party dominates the change process. Rather, each participant brings unique information and expertise to the situation, and they combine their resources to learn how to change the organization. Consultants, for example, know how to design diagnostic instruments and OD interventions, and organization members have “local knowledge” about the organiza- tion and how it functions. Each participant learns from the change process. Organization members learn how to change their organization and how to refine and improve it. OD consultants learn how to facilitate complex organizational change and learning. The action research model will continue to be the dominant methodological basis for planned change in the near future. But the basic philosophy of science on which traditional action research operates is also evolving and is described below. 2-1c The Positive Model The third model of change, the positive model, represents an important departure from Lewin’s model and the action research process. Those models are primarily deficit based; they focus on the organization’s problems and how they can be solved so it functions better. The positive model focuses on what the organization is doing right. It helps mem- bers understand their organization when it is working at its best and builds off those capabilities to achieve even better results. This positive approach to change is consistent with a growing movement in the social sciences called “positive organizational scholar- ship,” which focuses on positive dynamics in organizations that give rise to extraordinary outcomes.22 Considerable research on expectation effects also supports this model of planned change.23 It shows that people tend to act in ways that make their expectations occur. Thus, positive expectations about the organization can create an anticipation that energizes and directs behavior toward making those beliefs happen. The positive model has been applied to planned change primarily through a process called appreciative inquiry (AI).24 As a “reformist and rebellious” form of social con- structionism, AI explicitly infuses a positive value orientation into analyzing and chang- ing organizations.25 Social constructionism assumes that organization members’ shared experiences and interactions influence how they perceive the organization and behave in it.26 Because such shared meaning can determine how members approach planned change, AI encourages a positive orientation to how change is conceived and managed. It promotes broad member involvement in creating a shared vision about the organiza- tion’s positive potential. That shared appreciation provides a powerful and guiding image of what the organization could be. Drawing heavily on AI, the positive model of planned change involves five phases that are depicted in Figure 2.1(C).27 1. Initiate the inquiry. This first phase determines the subject of change. It emphasizes member involvement to identify the organizational issue they have the most energy to address. For example, members can choose to look for successful male–female

CHAPTER 2 THE NATURE OF PLANNED CHANGE 27 collaboration (as opposed to sexual discrimination), instances of customer satisfac- tion (as opposed to customer dissatisfaction), particularly effective work teams, or product development processes that brought new ideas to market especially fast. If the focus of inquiry is real and vital to organization members, the change process itself will take on these positive attributes. 2. Inquire into best practices. This phase involves gathering information about the “best of what is” in the organization. If the topic is organizational innovation, then members help to develop an interview protocol that collects stories of new ideas that were developed and implemented in the organization. The interviews are conducted by organization members; they interview each other and tell stories of innovation in which they have personally been involved. These stories are pulled together to create a pool of information describing the organization as an innovative system. 3. Discover the themes. In this third phase, members examine the stories, both large and small, to identify a set of themes representing the common dimensions of people’s experiences. For example, the stories of innovation may contain themes about how managers gave people the freedom to explore a new idea, the support organiza- tion members received from their coworkers, or how the exposure to customers sparked creative thinking. No theme is too small to be represented; it is important that all of the underlying mechanisms that helped to generate and support the themes be described. The themes represent the basis for moving from “what is” to “what could be.” 4. Envision a preferred future. Members then examine the identified themes, chal- lenge the status quo, and describe a compelling future. Based on the organization’s successful past, members collectively visualize the organization’s future and develop “possibility propositions”—statements that bridge the organization’s current best practices with ideal possibilities for future organizing. These propositions should present a truly exciting, provocative, and possible picture of the future. Based on these possibilities, members identify the relevant stakeholders and critical organiza- tion processes that must be aligned to support the emergence of the envisioned future. The vision becomes a statement of “what should be.” 5. Design and deliver ways to create the future. The final phase involves the design and delivery of ways to create the future. It describes the activities and creates the plans necessary to bring about the vision. It proceeds to action and assessment phases similar to those of action research described previously. Members make changes, assess the results, make necessary adjustments, and so on as they move the organization toward the vision and sustain “what will be.” The process is contin- ued by renewing the conversations about the best of what is. 2-1d Comparisons of Change Models All three models—Lewin’s change model, the action research model, and the positive model—describe the phases by which planned change occurs in organizations. As shown in Figure 2.1, the models overlap in that their emphasis on action to implement organizational change is preceded by a preliminary stage (unfreezing, diagnosis, or initi- ate the inquiry) and is followed by a closing stage (refreezing or evaluation). Moreover, all three approaches emphasize the application of behavioral science knowledge, involve organization members in the change process to varying degrees, and recognize that any interaction between an OD practitioner and an organization constitutes an intervention that may affect the organization. However, Lewin’s change model differs from the other

28 PART 1 OVERVIEW OF ORGANIZATION DEVELOPMENT two in that it focuses on the general process of planned change, rather than on specific OD activities. Lewin’s model and the action research model differ from the positive approach in terms of the level of involvement of the participants and the focus of change. Lewin’s model and traditional action research emphasize the role of the OD practitioner with relatively limited member involvement in the change process. Contemporary applications of action research and the positive model, on the other hand, treat both OD consultants and participants as colearners who are heavily involved in planned change. In addition, Lewin’s model and action research are more concerned with fixing problems than with focusing on what the organization does well and leveraging those strengths. 2-2 General Model of Planned Change The three models of planned change suggest a general framework for planned change as shown in Figure 2.2. The framework describes the four basic activities that practitioners and organization members jointly carry out in organization development. The arrows connecting the different activities in the model show the typical sequence of events, from entering and contracting, to diagnosing, to planning and implementing change, to evaluating and institutionalizing change. The lines connecting the activities emphasize that organizational change is not a straightforward, linear process but involves consider- able overlap and feedback among the activities. Because the model serves to organize the remaining parts of this book, Figure 2.2 also shows which specific chapters apply to the four major change activities. 2-2a Entering and Contracting The first set of activities in planned change concerns entering and contracting (described in Chapter 4). Those events help managers decide whether they want to engage further in a planned change program and to commit resources to such a process. Entering an organization involves gathering initial data to understand the problems facing the organization or to determine the positive areas for inquiry. Once this information is col- lected, the problems or opportunities are discussed with managers and other organiza- tion members to develop a contract or agreement to engage in planned change. The contract spells out future change activities, the resources that will be committed to the FIGURE 2.2 A General Model of Planned Change © Cengage Learning 2015