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The Challenge of Organizational
Renewal and ChangeAguipo | Jarabelo | Orteza
July 4, 2013
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Objectives
• Recognize the factors contributing to accelerating rate of change
• Identify the ways an organization uses renewing processes to adapt to change
• Determine the individual and group methods of coping with change
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The 5 Stages of Organizational Development
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The Challenges of Change
• Market• Product• Competition• Downsizing• Reengineering• Flattening structures• Globalization• Technological Upgrade
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Renewal
• Organizational renewal requires that top managers make adaptive changes to the environment.
• Manager must analyze the organization, its departmental system interrelationships, and the possible effects on the internal environment.
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Constant Change
• Organizations exist in constant changing environment and therefore must have the capacity to adopt.
• Managers must do more than react; they must be able to anticipate the changing patterns of people, markets, product, and technology
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The 6 Areas of Organizational Development
1. Organizational Renewal2. The Systems Approach3. The Sociotechnical System4. Future Shock5. Organizational Transformation 6. Organizational Development
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Organizational Renewal: Adapting to Change
• Organizational renewal may be defined as an ongoing process of building innovation and adaptation into the organization.
– Entropy – the principle of physics stating that everything that is organized will break down unless it is maintained.
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4 Ways for Organization toAdapt to Change
• Sluggish Thermostat Management.• Satisficing Management.• Reactive Management.• Renewing/Transformation Management.
Environment vs AdaptationWhere a hyper-turbulent environment is characterized by rapid changing product lines and increasing and changing set of competitors, rapid and continual technological innovation and rapid market growth.
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A Model of Adaptive Orientation
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Sluggish-Thermostat Management
• Stable environment, low adaptation.• Management style is based on low risk.• Organizations using this style:– Have very stable goals.– Highly centralized structure
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Satisficing Management
• Stable environment, high adaptation.• Adequate and average.• Planning and decision-making concentrated at
top.
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Reactive Management
• Hyperturbulent environment, low adaptation.• Reacting after conditions change. • Short-term, crisis type of adaptation.• Usually involves:– Replacing key people.– Hasty reorganization.
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Renewing / Transformation Management
• Hyperturbulent environment, high adaptation.
• Deal with future conditions before they occur.
• Faster at developing new ideas.• More participative.
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The Systems Approach
• The system approach to managing change views the organization as a unified system composed of interrelated units.
• Managers look at the organization as part of a larger external environment where it breaks the company into key processes and it creates teams from different departments to run them.
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Basic Qualities of Systems
• It is designed to accomplish objectives.• Elements have established arrangement.• Interrelationships exist among elements.• Ingredients of process more vital than
elements. • Organization more important than
elements.
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Organization as an Open System
• In continual interaction with environment.• Continually receives feedback from
environment.
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Organization as an Open System
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The Sociotechnical System
• Where an organization is viewed as an open system which coordinates human and technical activities.
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The Sociotechnical System uses the following approaches:
Organized around process – not tasks.Flatten the hierarchy.
Use of teams to manage everything.Let customers drive performance.
Reward team performance.
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The Sociotechnical System
Goals and Values Basic mission and vision of the organization
The Technical Subsystem Activities; operations; techniques and equipment
The Structural Subsystem Formal design; policies; procedures; organizational chart; division of work; patterns of authorities
The Psychosocial Subsystem (Culture)
Social relationship; behavioral patters of members; norms; roles; communications
The Managerial Subsystem Directing; organizing and coordinating
It consists of:
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High Performance Systems
• Occur by design, not by chance.• Key variables are:– Business situation.– Strategy.– Design elements.– Culture.– Results.
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The Sociotechnical System
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Future Shock of Change
• Most people are utterly unprepared to cope with accelerated rate of change.
• Future shock is a time phenomenon, a product of a greatly accelerated rate of change in society
• Too much change in too short a time affects managers and organizations as well
• When change occurs rapidly, the capacity of management to react is strained, creating the danger of future shock
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Organization Transformation and Development
OT and OD are both major approaches to managing change
in organization
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Organizational Transformation
• Organization transformation may be defined as the action of changing an organization’s form, shape, or appearance, or changing the organization’s energy from one to another.
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Organizational Development
• OD, or the planned organizational change, is a deliberate attempt to modify the functioning of the total organization or one of its major parts in order to bring about improved effectiveness
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ORGANIZATION TRANSFORMATION
• OT changes organization’s form or appearance.
• OT is a revolution.• Transforms framework of
organization.• Unplanned changes in
response to pressures.• Change occurs in short time
frame.
ORGANIZATIONAL DEVELOPMENT
• OD like an evolution.• Planned change on large
scale.• Longer time frame than OT.• Gradual implementation.• Modifies total organization
or major parts.
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What OD Focuses On
1. Individual effectiveness.2. Team effectiveness.3. Organization effectiveness.
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Individual Effectiveness
• Organization is made of individual members, and each members has unique values, beliefs and motivations.
The goals are to improve the following: Managerial skills. Technical skills. Interpersonal competence.
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Team Effectiveness
• Change efforts may also focus on the fundamental unit of an organization, team or work group, as means for improving the organization’s effectiveness.
Emphasis on: • Improving problem-solving.•Working through conflicts.• Team effectiveness.
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Team Effectiveness
• Two separate dimensions of teams are– Task activities—what the team does.– Team process—how the team works.
• Process observations examine:– The way the group functions.– Leadership, decision making, communication.
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Team Effectiveness
OD practitioners need to develop skills and observations to learn to be a participant-observer, that is to actively participate and at the same time be aware of group process.
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Organizational Effectiveness
• The focus is on total organization system.• Improve effectiveness by changes in:– Structure.– Technology.– Management.
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SUMMARY• Organizational renewal can occur as an
ongoing, continuous process or as episodic change.
• Organizations need continuous renewal because it adds a level of stability in the midst of internal and external triggers of change.
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Reference:
Experiential Approach to Organizational Development 8/Eby Donald Brown
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Feel free to ask questions!
Aguipo, JamesJarabelo, Kristelle
Orteza, Aldrin
The Challenge of Organizational Renewal and Change
July 4, 2013