Chapter 15
Organization
Transformation
and Strategic
Change
TEST QUESTIONS
True/False Questions
1. Organizational transformation refers to drastic changes in how an organization
functions and relates to its environment.
2. Organization development and organization transformation are both attempts for
organizations to survive drastic unplanned changes in management processes and
cultures.
3. The degree of disconnect that an organization has with its environment is one of
several factors that can determine the appropriateness of transformational change.
4. An incremental strategy that keeps an organization in alignment with its environment
and allows for anticipation of changes and the ability to make minor adjustments is
known as participative evolution.
5. Corporate culture becomes less important as organizations reorganize in response to
their environment.
6. Strategy refers to a course of action that is used to accomplish objectives.
7. The culture of an organization should not be considered when strategic changes are
implemented, as the culture is fluid and will adapt to the changes.
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8. Individual autonomy is one of the core characteristics of an organization’s culture.
Individual autonomy refers to the degree of assistance and warmth provided by
managers.
9. A shared vision provides a starting point for cultural and organizational transition.
10. Relatively young companies are usually characterized by strong cultures because of
the pressure to succeed.
11. The need for strategic change and compatibility of the change to the organization will
largely influence the method used to manage the strategic change.
12. When an organization manages around the culture as a strategy, the value system is
reinforced and power is reshuffled to key people.
13. Based on the strategy-culture matrix model of change, when the strategic change is
important to the company but the changes are incompatible with an entrenched
corporate culture, management must push the change forward forcefully for the good
of the company.
14. The challenge of changing a culture is explosive but it is a short-term undertaking
that is worth the energy when considering long-term gains.
15. Tichy’s strategic change model uses three internal systems (political, cultural and
technical) that are interrelated to meet environmental changes and pressures.
16. The strategic change management model separates the organizational systems for
intervention and then reconnects the systems after the strategy changes.
17. Companies that are small and growing rapidly or companies that are mediocre should
both consider large-scale cultural changes.
18. Meshing different cultures or subcultures within the same organization is relatively
easy in larger organizations because of the similarity of values held by the members.
19. For typical organizations, changing the culture is in the best long-term interest of the
firm. This is especially the case since the effort and time to change a culture is
modest.
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Multiple-Choice Questions
20. The biggest stumbling block in the path of strategic change is usually _____.
a. an old and inflexible corporate culture
b. inefficient managerial skills
c. the managerial style of top management
d. external influences over which the organization has no control
e. intergroup conflict
21. Organization _____ refers to drastic changes in how an organization functions and
relates to its environment.
a. chaos
b. development
c. structure
d. transformation
e. disorganization
22. The process that focuses on more gradual approaches to strategic change and on
participative change processes is known as _____.
a. organization analysis
b. organization development
c. organization transformation
d. organization planning
e. organization vision
23. Communication in organizational transformation is usually _____.
a. a top-down, top-management-driven process
b. a directive approach
c. a collaborative, participative process
d. all of the above
e. answers a and b
24. The strategy for change characterized by minor adjustments over a longer time frame,
but without the support of the organization culture, is known as _____.
a. participative evolution
b. charismatic transformation
c. forced evolution
d. dictatorial transformation
e. none of the above
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25. The strategy that accomplishes change when radical change must be accomplished in
a short time frame and has the support of the organization culture is known as _____.
a. participative evolution
b. charismatic transformation
c. forced evolution
d. dictatorial transformation
e. none of the above
26. The leadership style of top management in combination with the norms, values, and
beliefs of the organization’s members combine to form the _____.
a. strategic change model
b. corporate culture
c. strategy-culture fit
d. corporate dynamic for change
e. customer service strategy
27. The comprehensive activities that an organization plans to use to achieve its major
objectives are referred to as _____.
a. a sales forecast
b. strategy
c. net profit
d. equity
e. team building
28. The corporate culture reflects the organization’s _____ and is often deeply rooted in
the firm’s _____.
a. past; history and mythology
b. strategy; strategic plan
c. management philosophy; policies and procedures
d. structure; communication process
e. success; salaries and benefits
29. Over time, organizations develop certain ways of doing business that are collectively
referred to as the _____ of the organization.
a. culture
b. mission
c. net profit
d. constraints
e. vision
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30. “The way we always do that in this company” is part of what aspect of the company?
a. strategic plan
b. strategy-culture matrix
c. culture
d. communication process
e. none of the above
31. Which of the following is NOT a core characteristic of culture?
a. individual autonomy
b. benefit plans
c. support
d. risk behavior
e. all of the above are core characteristics of culture
32. Which of the following in NOT a stage in developing a shared vision?
a. develop trust
b. empower the individual
c. share the vision
d. reward performance
e. measure commitment
33. A _____ is a mental image of a possible and desirable future state of the
organization.
a. culture
b. mission
c. net profit
d. sociotechnical system
e. vision
34. An organization that has a large percentage of its members with strong commitment
to a system of shared values is likely to have _____.
a. a weak culture
b. high profits
c. a risk avoidance climate
d. a strong culture
e. a need for change
35. Once an organization develops a strong culture, there is _____ change.
a. pressure to
b. no way to predict
c. individual pressure
d. little resistance to
e. considerable resistance to
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36. Strategic changes are largely concerned with adjustments in _____.
a. behavior of key individuals
b. the profit and loss statement
c. incentive and reward system
d. structure, systems, and people
e. a weak culture
37. The strategy-culture matrix considers _____ and _____ to influence the method used
to manage the strategic change.
a. net profit; monetary constraints
b. the organization’s vision; managerial style
c. the need for strategic change; the compatibility of the change
d. process; content
e. team commitment; individual skills
38. A strategic approach to change means _____.
a. developing a programmed system
b. developing workable control procedures
c. developing strong leadership skills
d. developing a strategy compatible with a culture
e. all of the above
39. Strategic changes can more effectively be implemented when the _____ of the
organization is considered.
a. culture
b. mission
c. net profit
d. constraints
e. vision
40. Based on the strategy-culture matrix, when the need for strategic change is low and
the compatibility of change with the existing culture is high, a manager will choose to
_____ as the most effective strategy.
a. manage the change
b. reinforce the culture
c. manage around the culture
d. change the strategy
e. answers a and b
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41. Using the strategy-culture matrix, when an organization needs to make strategic
changes but the changes are potentially incompatible with the culture, an approach to
change is to _____.
a. alter the power structure to promote key people
b. reinforce the existing culture
c. provide support to the current key managers
d. alter only the technical system and leave the political and cultural
systems alone
e. all of the above
42. When an organization faces a large-scale change with a high probability of cultural
resistance, the OD practitioner and management must determine _____.
a. how to reinforce the new value system
b. a way to “break” the culture
c. the budgeting process in the reorganization
d. the economic, political, and cultural forces at work
e. whether strategic change is really a viable alternative
43. If the corporate culture does not support a strategic change, but yet the change is
important to the corporation, then _____.
a. middle managers must be relied on more
b. it may be necessary to modify the strategy to fit more closely with the
current culture
c. key participants will readily accept the strategy
d. only technological change will be effective
e. all of the above
44. An effective OD practitioner is aware of technical, political, and social systems in
organizations and tries to _____.
a. bring strategic and significant changes to all three systems
b. encourage the development of small incremental changes in the three
systems
c. bring stability to the three systems
d. align the three systems with one another
e. none of the above
45. Which of the following would be seen as one of the strategic system changes Tichy
proposes?
a. the values and beliefs shared by members
b. the organization’s politics
c. the engineering processes
d. all of the above
e. none of the above
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46. The technical, political, and culture systems Tichy described _____.
a. are interrelated
b. will need to be reconnected after strategy interventions have been made
in each of the systems
c. form an organizational system
d. all of the above
e. none of the above
47. According to Tichy’s approach to change, the first step in the strategic planning
process is to _____.
a. develop an image of the desired organization
b. set net profit goals for the company
c. decide on the organizational chart for the company
d. sets an acceptable debt/equity ratio for the company
e. answers b and c
48. Large-scale culture changes are justified _____.
a. when profits will be increased
b. when a company is small but growing rapidly
c. when a company is in the Fortune 500
d. when there is a stable and moderate culture
e. none of the above
Essay Questions
49. Describe the four process change strategies that are based on the three key
dimensions: (1) the time frame of the change, (2) the support level of the organization
culture, and (3) the degree of discontinuity with the environment.
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50. Describe the core characteristics of a culture.
51. Compare and contrast the two manageable risk segments of the strategy-culture
matrix: manage the change and manage around the culture.
52. Using the strategy-culture matrix, what is the key question that management and OD
practitioners consider before attempting to change the corporate culture?