waddell 4e: instructor’s manual chapter 6 organisation ... 4e... · to compare and contrast three...

Waddell 4e: Instructor’s Manual

Chapter 6 Organisation development and change

Learning objectives

To understand OD interventions that enable organisations to continuously change

To explain how dynamic capabilities built into the organisation enable it to constantly adapt to rapidly shifting environments

To compare and contrast three different types of OD interventions aimed at developing organisations capable of continuous change interventions: self- designing organisation interventions, organisation learning and knowledge management interventions, and built-to -change organisation interventions

Activities

Review questions

(See text p. 222)

1 How does organisational learning (OL) differ to individual learning?

Learning organisations are those with the ability to learn how to change andimprove

themselves constantly. Distinct from individual learning, which focuses on the

knowledge, skills and abilities of the individual employee, this interventionhelps

organisations move beyond solving existing problems to gaining the capabilityto

improve constantly. It results in the development of a learning organisation

whereempowered members take responsibility for changing the organisation and

learninghow to do this better and better. Organisational learning and knowledge

management practices gather, organise and disseminate the knowledge and skills of

members who are located throughout the organisation.

2 Explain ‘single loop’ and ‘double loop’ learning.

Single-loop learning or adaptive learning is focused on improvingthe status quo, that

is doing the same better. This entails the group refining what they are doing. This is

the most prevalent form of learning in organisations and enables members to reduce

errors or gaps between desired and existing conditions. It can produce incremental

change in how organisations function. It does not result in a fundamental change to

current thinking.

2 Waddell 4e: Instructor’s Manual

© 2011 Cengage Learning Australia Pty Limited

Double-loop learning or generative learning is aimed at changing the status quo,

that is doing things differently or doing different things. It operates at a more

abstract level than does single-loop learning because members learn how to change

the existing assumptions and conditions within which single-loop learning operates.

This level of learning can lead to transformational change, where the status quo

itself is radically altered.

3 Identify the steps for the application of knowledge management

Although there is no universal approach to KM, these are the essential steps for

generating, organising and distributing knowledge within organisations:

1 Generating knowledge. This stage involves identifying the kinds of knowledge

that will create the most value for the organisation and then creating

mechanisms for increasing that stock of knowledge. It starts with

examination of the organisation’s competitive strategy – how it seeks to

create customer value to achieve profitable results. Strategy provides the

focus for KM; it identifies those areas where knowledge is likely to have the

biggest impact on the value to the organisation. Other areas for the active

generation of knowledge include those areas where strategies favouring

product development, like those at Microsoft and Hoffman-LaRoche, benefit

from knowledge about technology, research and development. Strategies

focusing on operational excellence value knowledge about manufacturing

and quality improvement processes.

Once the knowledge required for competitive strategy is identified,

organisations need to devise mechanisms for acquiring or creating that

knowledge. For example, organisations can acquire other companies that

possess the needed knowledge, or they can rent it from knowledge sources

such as consultants and university researchers. Internally, organisations can

facilitate communities of practice – informal networks among employees

performing similar work to share expertise and solve problems together.

These groups for knowledge generation maybe formal, such as R&D

departments, corporate universities and centres of excellence.

Creative abrasion as described by Leonard-Barton, brings together groups of

people from different backgrounds and with different skills to create new

ideas. This process breaks traditional frames of thinking by having diverse

perspectives rub creatively against each other to develop innovative

solutions.

2 Organising knowledge. This is the putting of knowledge into a format that can

be easily stored and accessed by the organisation’s members. It may also

involve refining knowledge to increase its value to users. Codification and

personalisation are the two strategies for which processes have been

Chapter 6 Organisation development and change 3


developed in the management of knowledge. Codification approaches rely

heavily on information technology in the accessible form of database

management. The economic rationale underlying this strategy is to invest

once in a knowledge asset and then to reuse it many times.

Hospitals and other healthcare organisations are commonly using their

librarians to manage project reports, new scientific and conference papers in

this manner. The purpose is to reuse the knowledge and experience from one

sector of the organisation across many sectors and from one time to another.

The management of institutional memory is also aided by codification

approaches, but not to the extent that personalisation strategies do.

Personalisation strategies organise the knowledge of individuals in a manner

where they can share it person-to-person. This approach emphasises tacit

knowledge, which is typically shared through personal conversations, direct

contact and ongoing dialogue between employees. Networking is a good

example of a personalisation strategy. Other companies have created

‘knowledge maps’ that identify valued competencies, skills and knowledge

and show people where to go and whom to contact to access them.

3 Distributing knowledge. This final stage involves making knowledge easy for

people to find and encouraging its use and reuse. This is typically through

self-directed distribution, knowledge services and networks, and facilitated

transfer.

Self-directed distribution methods rely heavily on member control and

initiative for knowledge dissemination. Self-directed knowledge transfer can

be ‘pulled’ whereby individuals pull down the information when they need it,

and ‘push’ systems where knowledge is sent out to them.

Knowledge services can include help-desks, information systems and

packages of information designed for a specific purpose. In some larger

organisations there may be specific knowledge management departments

developing as an evolving role of the library.

The overall purpose is to share knowledge, store knowledge for future use

and maintain a record of experiences the organisation can learn from again.

4 Define ‘built-to-change’. Give an example of each component.

This is based on the premise that most organisations are designed for stability and

dependable operations. Their design elements and managerial practices reinforce

predictable behaviours aimed at sustaining a particular competitive advantage.

Lawler and Worley argue that many change efforts are unsuccessful, not because of

human resistance or lack of visionary leadership, but because organisations are

designed to be stable. The ability to change constantly is the best sustainable source

of competitive advantage.



Managing talent in B2C designs are geared to selecting, developing and

managingthe right talent for change. Selection practices seek quick learners who

want totake initiative, desire professional growth and thrive on change and this is

reflected in their employment contracts, a condition of employment and a path to

success.

Rewards play a key role in motivating and reinforcing change in B2C

organisations. Individual or team bonuses are tied directly to change goals, learning

new things and performing new tasks well. There is a clear link between achieving

the changed state and the reward.

B2C designs emphasise flat, lean and flexible organisation structuresthat can be

reconfigured quickly when the circumstances demand. Structures are designed to

put decision making into the hands of those closest to the work and the

environment. Organic designs such as process, matrix and network keep the

organisation closely connected with the environment, so that it can detect external

changes and create innovative responses to them

Information and decision-making processes are moved throughout the

organisation to wherever they are needed. These performance-based systems

ensure that information is transparent and current, and that it provides a clear

picture of how the organisation is performing relative to its competitors.

B2C designs stress the importance of shared leadership throughout the

organisation, which is designed to speed the decision-making process. Shared

leadership supports continuous change by spreading change expertise and

commitment across the organisation. It increases the chances that competent

leaders will be there to keep the change process moving forward. Examples include

teams within which any member is trusted to make a decision which may affect the

team.

Built-to-change is applied through creating a change-friendly environment,

pursuing proximity to the future state of the organisation, building an orchestration

capability, establishing strategic adjustment as a normal condition and seeking

virtuous spirals, which is also discussed in Question 10.

5 What is the difference between OL and knowledge management?

Give an example of each.

Organisational learning (OL) is focused on enriching the collective ability of all

members of the organisation through the acquiring of knowledge so that the

organisation can perform more successfully. An example is when participants

affected by a change in IT system all attend the same course to learn about and

practice it.

Knowledge management refers to the practices used to manage the information

and experiences from within the organisation so that it can be reused or used to



inform decisions in the future. Corporate librarians are the traditional knowledge

managers in organisations, with easy access to the records of the projects

undertaken by the organisation coupled with skills in searching international

databases for new ideas and material.

Organisational learning and knowledge management practices gather, organise

and disseminate the knowledge and skills of members of the organisation.

6 What are the five requirements for adaptive change?

The five requirements for adaptive change are:

1 Needs a systematic change process that accounts for the multiple features

and relationships in the organisation’s strategy.

2 Process needs to be dynamic and iterative, with organisations continually

changing themselves.

3 Calls for constant organisational learning.

4 Process must attend to the interests of multiple stakeholders.

5 Needs to occur at multiple levels of the organisation.

7 Is it easier to have a self-design strategy for a new business or an

existing business? Explain your answer.

A self-design strategy accounts for the demands of adaptive change. It is adynamic

and an iterative process aimed at providing organisations with the built-incapacity to

change and redesign themselves continually as circumstances demand.

There are three stages to follow when employing the self-design strategy,

commencing withlaying the foundation, which in turn is has three phases: acquiring

knowledge, diagnosing and valuing. The second stage is designing and the

third,implementing and assessing.The self-design strategy is applicable to existing

organisations needing to changethemselves, as well as to new organisations. It is

also applicable to changing thetotal organisation or only some sub-units. That is

because the way self-design is managed and unfolds can also differ. In some cases, it

follows the existing organisation structure, starting with the senior executive team

and cascading downward across organisational levels. In other cases, the process is

managed by special design teams that are sanctioned to set broad parameters for

valuing and designing for the rest of the organisation. Refer to Figure 6.1, (p. 198).

8 What is organisation knowledge? Why is it important?

Organisation knowledge is the key outcome of organisation learning

processes.Organisation knowledge can be explicit, existing in codified forms such as

documents, manuals and databases; or it may be tacit in the form of members’

memories, intuitions or skills gained from experience.



It is important because it is the collective knowledge of the organisation, which

allows understanding of the systems, processes, skills and abilities, the market and

the competitive environment in which the organisation seeks to do business

successfully.

9 What are the series of activities involved in a self-design change

strategy?

A self-design change strategy helps an organisation gain the capacity to designand

implement its own continuous change. Self-design involves multiple levels ofthe

organisation and multiple stakeholders and includes an iterative series ofactivities:

acquiring knowledge, valuing, diagnosing, designing, implementing

andassessing.Refer to Figure 6.1 (p. 198) and to Question 7 above.

10 What is a virtuous spiral? What are its benefits?

A virtuous spiral is the last stage of the application of B2C principles. This approach

rests on the logic that in turbulent environments, success results from identifying

future opportunities, organising to take advantage of them and then moving on to

the next opportunity when things change. B2C organisations continually modify their

capabilities and designs to take advantage of emerging prospects. They constantly

work to balance the short and long runs, to keep close to an unfolding environment,

and to sustain dynamic alignment among their design elements and capabilities.

When they do this for long periods of time, a virtuous spiral results.

The benefit to the organisation is that its readiness for change is a permanent

characteristic with an inbuilt motivation to create even better designs and

capabilities for newer strategies because they are rewarded. In rapidly changing

environments, B2C organisations are organic and more capable of seeking and

creating virtuous spirals than traditional organisations, which are more mechanistic.

Discussion and essay questions

(See text p. 222)

1 ‘When times are tough, the tough get going.’ How may this quote be

relevant to change management?Discuss.

The impetus or catalyst for change often manifests itself when the organisation

needs to change in order to survive. This is responsive change, which may be

adaptive if the change is incremental or require recreation if the change is

transformational. The quote suggests that some organisations only move to change

in a response to the external environment but not when times are good and they

have the opportunity to respond to internal demands. It does however also suggest

that organisations with the right attitude to change, that includes flexibility and

willingness to change, will cope with the change process required to get to a new

state more easily than others.



Ideally, organisations will always be in a state of readiness for change,

demonstrated by systems and processes which are flexible and can react quickly

when required. For example, HR policies and the impact of long-term fixed contracts

with defined job descriptions compared with the flexibility of casual staff that are

required to multitask if required.

2 “Self-design change strategies will facilitate optimum competitive

advantage.’ How may this occur? What difficulties do you envisage?

Self-design strategies focus on the organisation’s ability to develop the capacity for

continuous improvement in responding to market conditions. Self-design involves all

levels of the organisation and across all divisions, so it is an inclusive process

resulting in readiness for the organisation as a whole. The approach assistsmembers

to translate corporate values and general prescriptions for change intospecific

structures, processes and behaviours suited to their situations. It enablesthem to

tailor changes to fit the organisation and helps them continually adapt

theorganisation to changing conditions.

Self-design occurs through an iterative series of activities: acquiring knowledge,

valuing, diagnosing, designing, implementing and assessing.

Difficulties might include not having all sections of the organisation skilled in the

self-design process or a lack of willingness to participate. Because self-design has

developed in response to the fast pace of modern organisations in competitive

environments, there is a danger that previously unknown conditions may arise which

will test the organisation’s ability to respond. The GFC has had a number of

casualties because of the inability to respond in turbulent times.

3 ‘Organisation learning and knowledge management are one and the

same thing.’ Do you agree? Why/why not?

No. However, the two concepts are often coupled together. Organisational learning

uses the knowledge available to the people in the organisationand emphasises the

organisational structures and social processes that enable employees and teams to

learn and to share knowledge. That knowledge is managed in a manner which

facilitates the access and availability to members andfocuses on the tools and

techniques that enable organisations to collect, organise, and translate information

into useful knowledge. This will include explicit knowledge which may be managed in

the form of databases and libraries, or tacit knowledge which uses a personal

approach between individuals and groups.

4 Is there conflict between the concept of a built-to-change

organisation and the establishment of long-term business goals?

What are the implications of pursuit of a built-to-change strategy for

investors?



No, any good business will be flexible enough to change or modify its strategy in

response to changes in market conditions. The purpose of built-to-change is about

the organisation being in a state of readiness for change should there be external

forces, or as part of an ongoing quality improvement process. Built-to-change is

about adapting policies, systems and processes for how the business achieves its

goals. The long-term goals of increasing shareholder value in the context of social

responsibility should not be affected unless the business chooses not to proceed.

5 The text refers to the use of scenario planning as part of the adaptive

process. What are the strengths and weaknesses of this technique

given the premise of this chapter that a growing number of

organisations are facing highly turbulent environments?

Step two of the B2C adaptive responses is about pursuing the proximity to change;

this helps the organisation get closer to current and possible future environments.

Executives are encouraged to use different scenarios as a way of ensuring that they

have mitigated as much risk as possible. ‘What if’ scenarios should be played out in

all types of environments and situations. They identify how the organisation’s core

competencies and capabilities can contribute to making desired futures happen.

In turbulent times it may be difficult for executives to imagine the enormity of

the situations their organisations may be exposed to. That is the positive aspect of

scenario planning – that situations which are considered highly unlikely, but which

could pose excessive risk to the organisation, can be planned for through making the

systems and processes in the business as flexible and as prepared as possible.

Applications—Critical thinking questions

These questions are ideal for organising students into groups of three to five to

debate the issues. You could extend the debate by being flexible and responsive to

their comments. There are no right or wrong answers for these questions as they are

intended to challenge students to think about how theory might be applied to real

organisations/situations.

6.1 Meditation in business

1 What are the arguments against this practice in the workplace?

The research on the application of meditation and similar techniques in the

workplace is comparatively new. At this stage, the use of such practices looks

promising, however the likely response from employers is that employees should

present to work in a state and manner which enables them to do their jobs

efficiently.



There could also be arguments about who pays for the leadership of such

sessions and the work time taken to allow them to happen. Further, mediation is an

intensely personal technique and a busy work environment may not be the most

suitable setting.

However, the jury is still out on the effectiveness. If found to have a positive

impact on the overall performance of the organisation, then it is likely that such

practices will be employed.

6.2 Back to school

1 The relationships between universities and business in Australia are

very different compared to the United States. How are they different

and what are the advantages of these differing perspectives?

For the most part, business and research in Australia has the common goal of

progress for Australia Inc. This means that universities do not often sell their

research, but are more likely to enter into a partnership arrangement which may

include some level of sponsorship, but not in return for sole use of the knowledge

which is found.

In contrast, many US universities must contract for research services in order to

boost their revenue. Rather than gain sponsorship, which would result in research

findings being used as a public good, the corporation contracting for the findings has

ownership of the findings.

While both have their place in business, the competitive market model can limit

the progress of the entire business sector but give competitive advantage to the

corporation.

2 Research further the theories espoused by Peter Senge and find

examples within your own business areas of interest.

Of particular interest will be Senge’s classic ‘The Fifth Discipline’ as referenced in the

text.

An interesting website which offers extensions to Senge’s classic work is:

www.leadertoleader.org/knowledgecenter/journal.aspx?ArticleID=753

3 What kinds of education programs/projects are available within your

organisation or organisations you are familiar with? Do you consider

they have been effective? Why/why not?

Students should be asked to list the programs in their organisations first, then

prioritise their importance in relation to the strategic objects of their organisation,

the current environment in which the organisation functions, and the future as it is

predicted now.

Students should do some scenario planning and describe the education their

organisation needs, to be prepared for those different scenarios.

http://www.leadertoleader.org/knowledgecenter/journal.aspx?ArticleID=753



4 To what extent does your organisation or an organisation you are

familiar with, encourage staff to contribute ideas? In your opinion,

are those encouragements effective? Why/why not?

Ask students to get into small groups and identify an organisation most are familiar

with. Those not familiar should be briefed on the style/type of management systems

in place.

Ask them to list the ways in which staff are asked to contribute ideas and at

which level in the organisation that happens. They can then debate whether that is

an effective way to encourage ideas and why it is effective or not.

Students should be encouraged to identify how they judge effectiveness, such as

what measures the organisation uses or could use, and the impact on the efficiency

of the organisation.

6.3 Knowledge keepers

1 This application focuses on law firms. What other industries have

similar arrangements?

Almost any industry where there is an expectation that individual professionals or

professional teams will be making autonomous decisions will have similar

arrangements. That includes engineering, architecture, health and education. Many

organisations within these industries now employ full time knowledge managers or

librarians. The librarian role has expanded considerably in recent years and the

librarian is now the conduit of any knowledge accessible via the World Wide Web.

2 What problems exist with knowledge management and how may they

be remedied?

When organisations do not take into account local and regional differences in how

knowledge is generated and used, they fail in getting KM systems across the global

operations. Sometimes that is a cultural issue where knowledge has different values

for different cultures.

A comprehensive study of KM in 431 US and European firmssuggests that

organisations may have more problems implementing KM practices than is

commonly reported in the popular media. Only 46% of the companies reported

above-average performance in ‘generating new knowledge’. Ratings were even

lower for ‘embedding knowledge in processes, products and/or services’ (29%) and

‘transferring existing knowledge into other parts of the organisation’ (13%). Another

study of 31 KM projects across 20 organisations revealed that KM contributed to the

fundamental transformation of only three of the firms studied.

Many of the companies, however, reported operational improvements in

product development, customer support, software development, patent

management and education and training. Because many of the existing reports of OL



and KM outcomes are case studies or anecdotal reports, more systematic research is

needed to assess the effects of these popular interventions.

Many of these challenges may be remedied through education and the

developing discipline of knowledge management.

3 In your experience, do knowledge management systems actually

contribute to a firm’s success or are they essentially a cost item?

Why do you hold that opinion?

Students should be asked to list the knowledge management projects they are aware

of or, preferably, have been involved in. They should be asked to align the projects

with particular projects within the firm and/or the impact on productivity or profit.

Their responses should not be limited to single projects but should also include

the maintenance of institutional knowledge, record keeping, literature searches and

so on.

4 ‘In a really big firm, you get an email from the knowledge manager

asking for your contribution and you just delete it, because there is

not that sense of collective responsibility . . .’ How would you

respond to this statement?

Education and understanding of the role of knowledge management is likely to be

the solution to the obstacle of non-compliance. Teamwork and making the role of

collective responsibility more robust is a further solution.

If this is the response in any business environment, then the problem may be far

greater than understanding knowledge management.

6.4 Maximum rewards

1 How does this application support the ‘built-to-change’ intervention

definition?

Through using the first design component of managing talent. In this, ensuring that

the new talent is coached, mentored, and given every assistance to get the

confidence needed in her practice. Secondly, making sure than the reward system

steers participants towards the changed and ready-to-change state. The case

describes an organic structure where there are not strict lines of authority.

Information and decision-making processes are able to be made at the level where

they will have most effect; this is enabled because of the support that is given to the

intern lawyer. Lastly, this is an excellent example of a leadership style which is

relaxed but credible, and clearly in support of having a R2C state.

2 What difficulties could you anticipate in such a situation and how

may they be avoided?

There can be a fine line between using experience on which to base your decision-

making and using experience to inform the decision. Sometimes the principles



employed can be the same but the technical environment can be very different. In

the case described in the application, the law may have changed and certainly the

way lawyers source information has changed since electronic libraries.

3 The process outlined above can be described as ‘mentoring’. How

could a similar approach be applied in a start-up business?

Some countries do provide a free business mentoring service using retired

executives. Usually these programs are run through Chambers of Commerce or

similar organisations.

Other options for start-up businesses include appointing an advisory board to

support the directors in their decision-making and to ensure that they understand

the board role.Older family members with the appropriate experience can also be a

source of knowledge and are only too pleased to be involved.

Additional suggested readings

Brown, F & Dodd, N 1998, ‘An approach to organizational intervention’, Journal of

Management Consulting, 10.1, pp. 46–9.

(An interesting little framework for assessing where your organisation is situated

prior to interventions.)

Bruhn, J 2001, ‘Managing tough and easy organizational cultures’, The Health Care

Manager, 20.2, pp. 1–10.

(This has an interesting assessment tool.)

Bruch, H., Gerber, P. and Maier, V. (2005) ‘Strategic Change Decisions: Doing the

Right Change Right’, Journal of Change Mangement,5 (1), pp.97-107

Buch, K & Wetzel, D 2001, ‘Analyzing and realigning organizational culture’,

Leadership and Organization Development Journal, 22.1, pp. 40–44.

(Discusses issues of cultural misalignments and techniques to reduce them with

targeted change initiatives.)

Oxtoby, B. McGuiness, T. and Morgan, R. (2002) ‘Developing Organisational Change

Capability’, European Management Journal, 20 (3), 310-20

References

Leonard-Barton, D. Wellsprings of Knowledge, op. cit.; D. Leonard-Barton and S.

Sensiper, ‘The role of tacit knowledge in group innovation’, California

Management Review, 40 (Spring 1998): 112–32.

Boisot, M. H., MacMillan, I.C. and Seok Han, K. (2007) Explorations in Information

Space: Knowledge, Agents and Organization. Oxford: Oxford University Press.

Lawler E and Worley, C. (2006) Built to Change: How to Achieve Sustained

Organizational Effectiveness. San Francisco: Jossey-Bass.



Worley C. and Lawler, E. (2006) Designing organizations that are built to change,

Sloan Management Review, 48 : 19–23.

The University of Queensland, Knowledge in Organisations, May 2007,

www.business.uq.edu.au/display/research/Knowledge+in+Organisations

http://www.business.uq.edu.au/display/research/Knowledge+in+Organisations

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