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Organizational Development and Change

November 10, 2013
Chapter 5 Organizational Development and Change
Chapter Overview
The organizational development (OD) tradition is a practitioner-driven
intervention-oriented approach to effecting organizational change via individual change,
with view to increasing effectiveness. It is implemented within a problem-solving model,
places a heavy accent on survey-based problem diagnosis and subordinates people to a
vision of the future. Commitment-based strategies of effecting change assume that the
impetus for change must come from the bottom up, whilst compliance-based strategies
involve the creation of behavioural imperatives for change.
Various ‘employee involvement’ strategies are reviewed, but there is little evidence for
their effectiveness either as a means of securing commitment or enhanced performance, or
as a means of leverage for change. Culture is assumed to be the primary vehicle for change
within the OD tradition, although the relationship between culture and the change process
is ill understood. Finally, the assumptions underpinning team development, and its
implementation, are critically examined.
The organizational culture literature itself is fraught with epistemological debate.
Practitioners are interested in management by measurement and manipulation of culture.
Theoreticians of culture, however, aim to understand the depth and complexity of culture.
Unresolved issues remain regarding how to define culture, the difference between culture
and climate, measurement/levels of analysis, and the relationship between organizational
culture and performance.
Interest in corporate identity is relatively recent, and is mainly driven by marketing and
strategic management considerations. More psychological approaches to the analysis of
corporate identity include an interest in how corporate identity is reflected in the identity
and self-esteem of employees, and the implications of this for managing organizational
change.
The classic OD approach to organizations and organizational change has been somewhat
‘side tracked’ today in favour of ‘knowledge management’, where knowledge and its
creation is seen as critical to organizational sustainability and competitive advantage in
today’s constantly changing global economy. Knowledge management raises issues about
the potentially highly complex relationship between structure, technology and people. The
dangers of a too tightly coupled understanding of the relationship between organizational
structure and technology are highlighted.
Chapter Thought Bytes and Examples
Chapter Case Studies
Case Study 5.1: British Airways Unveils New Identity
The story of British Airways is described as one of the most widely used inspirational
accounts of changing culture (Grugulis & Wilkinson, 2002). British Airways brought
together thousands of people in the shape of a globe to create a compelling image for one
of its television commercials, and more recently imposed a giant model of Concorde on
Times Square. According to BA, the company’s new identity was ‘based on what is
believed to be the largest consumer research exercise in the history of the travel industry’.
It was introduced through ‘what is believed to be the world’s largest satellite corporate
television broadcast’ using 13 satellites, transmitting pictures from almost 25 different
places to 126 locations in 63 countries across five continents. According to CEO Bob
Ayling, ‘Some people abroad saw the airline as staid, conservative and a little cold’ –
characteristics used to describe Britain as a whole. ‘We need a corporate identity that will
enable us to become not just a UK carrier but a global airline that is based in Britain,’ said
Ayling. ‘The identity we unveiled is that of a global, caring company, more modern, more
open, more cosmopolitan, but proud to be based in Britain.’ However, it is now well
known that the whole enterprise was a big flop (Grugulis & Wilkinson, 2002).
Case Study 5.2: Traditional ‘Top Down’ Organizational Change via Culture
Change using the UnfreezingRefreezing Model
Engineering culture change is becoming an increasingly popular (and lucrative) role for
occupational and organizational psychologists. Whilst myriad obstacles to change exist in
a typical organization, many writers have attempted to provide the practitioner/manager
with advice on how to achieve a successful change in a company’s culture. All of these
assume a perspective on culture as a measurable and manageable aspect of an organization
The culture change literature also assumes a direct link between culture and performance,
which is as yet merely a hypothesis rather than an established fact. These assumptions
need to be taken into consideration when reviewing ‘recipes’ for culture change.
Cummings and Huse (1989), for example, suggest implementation and careful
management of the following stages:
Clear strategic vision: Have a clear view of the direction and purpose of the proposed
change. Often, this will be embodied in the organization’s mission statement. This should
be a clear and precise statement of operationalizable and achievable goals.
Management commitment: Top management must be committed to change and must be
seen to be committed. Only top management have the power to make changes in the values
and deeper structures of the organization.
Symbolic leadership: Senior managers must behave in ways that are consistent with the
new culture, for example, management by walking about, and so on.
Supporting organizational changes: Changes to organizational structure, reporting
procedures, management styles, organizational processes, etc, are likely to be required.
Changing organizational membership: Bringing in new organizational members who
subscribe to the required new organizational values and practices is likely to consolidate
and ‘freeze’ the change. Existing organizational members, it should be mentioned, can be
encouraged to buy into the change through consultation, training and development,
ensuring visible senior management commitment, and so on.
Organizations are becoming increasingly concerned with their effectiveness within the
marketplace. The reasons for this derive largely from the advent of widescale use of
information technology (IT), and the increase in service orientation for many industries. As
a result, companies have begun to:
outsource non-core and peripheral activities;
shed layers of middle management as they strive to be more competitive;
become increasingly concerned with production/profits than with their staff;
frequently restructure and downsize;
become involved in acquisitions of competitors and in amicable mergers.
Such wide-ranging changes have enormous potential implications for the workforce and
for the managerial staff responsible for them. As such measures have grown in popularity,
so interest has increased in their influence on the ‘soft’ aspects of organizational life, such
as worker attitudes and organizational ‘culture’. Culture, in this context, has been
described as:
(a) a pattern of basic assumptions, (b) invented, discovered or developed by a given group,
(c) as it learns to cope with its problems of external adaptation and internal integration, (d)
that has worked well enough to be considered valid and, therefore (e) is to be taught to
new members as the (f) correct way to perceive, think and feel in relation to those
problems.(Schein, 1990)
The relationship between such a construct and the hard external reality of continuous
organizational change is embodied in the study and implementation of OD, defined as:
A systematic effort applying behavioural science knowledge to the planned creation and
reinforcement of organizational strategies, structures and processes for improving an
organization’s effectiveness. (Huse and Cummings, 1985)
OD has become a vital component in the management of change for many organizations,
and has resulted in the increased employment of external (and, increasingly, internal)
‘change agents’, responsible for planning, implementing and evaluating organizational
changes.
The following model is an example of how many cultural change programmes are pursued
using a variety of methods. The model assumes that:
the change agent has zero knowledge of the company prior to commencement of
the project;
the cultural change to be effected is company-wide;
the change agent has been requested to assist in effecting the change by senior
management;
the budget for the programme is large and the timescale relaxed;
replacing managerial staff is outside the remit of the change agent.
Clearly, these assumptions may, in some cases, not be accurate for all change management
projects.
The basic model is as follows:
[smp1]
The portion of the above model which directly addresses the process of culture change is
based on Lewin’s (1951) ‘unfreezing–change–refreezing’ model of change, the detail of
which forms part of the following discussion. Each of the above stages contains a variety
of substages, some of which are effected directly by the change agent and others of which
are achieved through the training and empowering of management to communicate the
prescribed changes to the organization. Each of the above stages will be discussed in detail
below, including, where appropriate, consideration of particular issues which must be
attended to at each stage.
Stage 1: Dialogue with senior management/decision-makers
This stage of the process is primarily concerned with establishing a functional relationship
with the management staff proposing the cultural change programme. Ideally, this should
include the following:
Establishing a contractual agreement (legal and psychological) that management
must take ownership of the change process, and that any input by the change agent
will be purely in facilitating and informing that process.
Establishing single points of contact within the Human Resources department, any
other departments of relevance and within senior management for the reporting of
progress and requesting of information.
Establishing the nature and perceptions of the problem through asking questions:
What do they perceive as the problem(s)?
What do they expect to gain from cultural change?
What measures/steps have already been taken to improve the situation?
Where is the company now?
Where should the company be?
What do they expect from the change agent?
What alternative solutions to the problem have been discussed/rejected?

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