Assignment 2 Deadline: 18/11/2021 @ 23:59 Course Name: Organization Design & Development Student’s Name: Course Code: MGT404 Student’s ID Number: Semester: I CRN: Academic Year: 1443/1444 H For Instructor’s Use only Instructor’s Name: Students’ Grade: Level of Marks: Instructions – PLEASE READ THEM CAREFULLY • The Assignment must be submitted on Blackboard (WORD format only) via allocated folder. • Assignments submitted through email will not be accepted. • Students are advised to make their work clear and well presented, marks may be reduced for poor presentation. This includes filling your information on the cover page. • Students must mention question number clearly in their answer. • Late submission will NOT be accepted. • Avoid plagiarism, the work should be in your own words, copying from students or other resources without proper referencing will result in ZERO marks. No exceptions. • All answered must be typed using Times New Roman (size 12, double-spaced) font. No pictures containing text will be accepted and will be considered plagiarism). • Submissions without this cover page will NOT be accepted. Department of Business Administration Organization Design and Development- MGT 404 Assignment 2 Marks: 5 Course Learning Outcomes: • • Describe the basic steps of the organizational development process. Analyze the human, structural and strategic dimensions of the organizational development. Part 1 (2.5 marks): Please read the case study entitled as “Job Design at Pepperdine University.” available in your textbook “Organization Development & Change”, p.115, in the 10th edition by Cummings, T and Worley, C and answer the following questions: 1. Describe the culture of Pepperdine University within which an individual job is enriched. 2. Explain why it is important for an individual job design to be congruent with the larger organization design. Support your answer using one example from the case. Part 2 (2.5 marks): Please refer to Figure 5.2 in your textbook (comprehensive model for diagnosing organizational system) and answer the following questions based on your understanding: 3. Choose an example of a hypothetical organization and explain the three key inputs (or environmental types) that affect the way such organization could be designed. 4. Choose an example of a hypothetical job position and describe each of its design components at the individual level. Answers: Part 1: A.1 A.2 Part 2: A.3 A.4 application 5 3 CHAPTER 5 DIAGNOSING 115 JOB DESIGN AT PEPPERDINE UNIVERSITY T he Graziadio School of Business and Management (GSBM) at Pepperdine University is one of the largest business schools in the country and has the third largest parttime MBA program. The school also provides graduate education aimed at different markets including an executive MBA (EMBA), a presidential/key executive MBA (PKE), and a specialized master’s degree in organization development (MSOD). The MSOD program’s curriculum consists of 10 four-unit classes over 22 months. Eight of the classes are conducted off-site during eight-day sessions at both domestic and international locations. The MSOD program office consists of a faculty director, a program administrator, and an administrative assistant. In response to costcutting initiatives at the university level, a proposal was being considered to alter the job designs of the MSOD program staff. The MSOD Program Administrator, the focus of this application, was responsible for marketing and recruiting new students, managing the delivery logistics of the off-site program, managing the students’ registration and financial relationships with the university, and maintaining relationships with the MSOD alumni. The marketing and recruiting duties involved working with the Program Director and the Director of Marketing for GSBM to develop marketing tactics including advertisements, brochures, conference marketing and support, and other market development activities. The recruiting process involved explaining the curriculum to prospective applicants, overseeing the application process for each applicant, working with the faculty to have qualified applicants interviewed, and managing the admissions process. This too had to be coordinated with the director and the administrative assistant. Once a class was admitted, the Program Administrator worked with various offsite facilities to establish room and board rates and catering services; managed the faculty’s travel and teaching requirements; managed various intersession activities including the final exam; managed the students’ enrollment and graduation processes including their interface with the university’s registrar and finance office and the school’s financial aid office; and coached students through the program. After graduation, the Program Administrator served as an unofficial placement service, hooking up eligible graduates with prospective employers who called looking for MSOD talent, provided career guidance, and worked with the program’s alumni organization to sponsor conferences and other alumni activities. Each of the above activities was somewhat programmable; they occurred at specific times of the year and could be scheduled. However, because each applicant, student, class, or graduate was somewhat unique, the specific tasks or actions could not always be specified in advance and there were a number of exceptions and unique situations that arose during each day, month, or year. The MSOD Program Administrator has worked with the MSOD program for over 15 years and was a fixture in both the MSOD and the general OD communities. Year over year, the Program Administrator delivered qualified applicants in excess of available space although that task had become increasingly difficult in the face of tuition increases, increasingly restrictive corporate policies on tuition reimbursement, and the ups and downs of the economy. He handled both routine and nonroutine administrative details professionally, displays and reports a high level of job satisfaction and commitment to the program, and has been complimented formally and informally by the students in the program. In fact, each cohort develops its own relationship with the administrator and he becomes a de facto member of almost every class. The alumni considered the Program Administrator a key and integral part of the MSOD program. The set of duties described above has evolved considerably over the Program Administrator’s tenure. In particular, he has become more involved and responsible for marketing and recruiting activities, and the alumni relations 116 PART 2 THE PROCESS OF ORGANIZATION DEVELOPMENT duties have been added in response to alumni requests that cannot be filled by traditional university departments. In an effort to improve efficiencies, and in recognition of the MSOD Program Administrator’s outstanding productivity, a proposal was being considered by GSBM administration to change the design of his job. The proposal suggested that the MSOD Program Administrator continue to perform all of the current duties of the position and, in addition, provide administrative support to two PKE classes from their initial class to graduation. The duties of administrating the PKE program would be similar in nature to the delivery aspects of the MSOD program, including working with faculty to support their teaching efforts, managing textbook ordering processes, and providing different facilities logistics activities. It would not include marketing, recruiting, and alumni development activities. The Program Administrator would receive additional compensation for the increased responsibilities and a title change. The new position would include joint supervision, with the EMBA program administrator, of an assistant program administrator, who would in turn manage a pool of administrative assistants. In addition, the new program administrator job would report to both the MSOD program director and the director of EMBA/PKE programs. Diagnosis of individual-level inputs answers the following questions: 1. What are the design and culture of the organization within which the individual job is embedded? Although the example says little about the organization’s design and culture, a number of inferences are possible. The business school’s administration was attempting to reward the Program Administrator with a more enriched job. This suggests that the culture of the organization was supportive of employee involvement. However, the proposed change also was being considered as part of an efficiency drive. The school is large, hosting the third largest part-time MBA program in the United States. This helps to explain why a specialized master’s degree in OD has been paired with two EMBA programs and differentiated from the large, part-time MBA program. To the extent that the MSOD program has different students or different marketing, delivery, and alumni relations processes than the EMBA programs, there may be difficult points of integration between the two types of programs. 2. What is the design of the group containing the individual job? Three individual jobs were grouped together according to the type of program. In this case, a faculty director, program administrator, and administrative assistant comprise the program office. The office is clearly dependent on other university and school functions, such as the registrar’s office, financial aid, and the teaching faculty. Each of the three jobs has specific duties, but there is a clear sense that all three jobs are highly interdependent. The Program Administrator must coordinate with the faculty director on marketing, admissions, and curriculum decisions and with the administrative assistant on recruiting, program delivery, and routine administrative processes. Interaction during task performance is thus intense, and although partly scheduled, the work involves a high number of exceptions. 3. What are the personal characteristics of the jobholder? The application provides some clues about the Program Administrator’s personal characteristics. First, he has stayed in the position for more than 15 years; this speaks to a loyalty or commitment to the OD program. Second, his job has evolved considerably and suggests at least a moderate amount of growth needs strength. CHAPTER 5 DIAGNOSING 95 FIGURE 5.2 © Cengage Learning 2015 Comprehensive Model for Diagnosing Organizational Systems The environment is the key input to organization design decisions. Organization design is an input to group design, which in turn serves as an input to job design. These cross-level relationships emphasize that organizational levels must fit with each other if the organization is to operate effectively. For example, organization structure must fit with and support group task design, which in turn must fit with individual-job design. © 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 Organization Development & Change, Tenth Edition Thomas G. Cummings and Christopher G. Worley Senior Vice President, LRS/Acquisitions & Solutions Planning: Jack W. Calhoun Editorial Director, Business & Economics: Erin Joyner Product Director: Michael Schenk Product Manager: Scott Person Content Developer: Sarah Blasco Product Assistant: Tamara Grega Brand Manager: Robin LeFevre © 2015, 2009 Cengage Learning ALL RIGHTS RESERVED. 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Printed in the United States of America 1 2 3 4 5 6 7 17 16 15 14 13 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 About the Authors xxii CHAPTER 1 General Introduction to Organization Development CHAPTER 2 The Nature of Planned Change CHAPTER 3 The Organization Development Practitioner 1 20 CHAPTER 4 Entering and Contracting CHAPTER 5 Diagnosing CHAPTER 7 Designing Interventions CHAPTER 8 Managing Change 45 CHAPTER 12 Restructuring Organizations iv Transformational Change Continuous Change CHAPTER 20 157 179 207 264 438 439 473 497 Transorganizational Change 528 529 569 605 PART 7 Special Applications of Organization Development 658 CHAPTER 21 Organization Development for Economic, Ecological, and Social Outcomes 659 CHAPTER 22 Organization Development in Nonindustrial Settings: Health Care, School Systems, the Public Sector, and Family–Owned 685 CHAPTER 23 297 PART 4 Technostructural Interventions Interventions CHAPTER 19 123 403 PART 6 Strategic Change 89 Interpersonal and Group Process Approaches 265 Organization Process Approaches Workforce Diversity and Wellness CHAPTER 18 CHAPTER 10 CHAPTER 11 Talent Management 75 PART 3 Human Process Interventions CHAPTER 15 CHAPTER 17 CHAPTER 9 Evaluating and Institutionalizing Organization Development Interventions Interventions CHAPTER 16 74 375 PART 5 Human Resource 21 CHAPTER 6 Collecting, Analyzing, and Feeding Back Diagnostic Information CHAPTER 14 Performance Management PART 2 The Process of Organization Development Employee Involvement Work Design PART 1 Overview of Organization Development CHAPTER 13 338 339 Future Directions in Organization Development 731 Glossary 784 Name Index 793 Subject Index 797 © Pixmann/Imagezoo/Getty Images Contents Preface About the Authors CHAPT ER 1 xvi xxii General Introduction to Organization Development 1-1 Organization Development Defined 1 1-2 The Growth and Relevance of Organization Development 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 1 4 Summary 17 Notes PART 1 CHAPT ER 2 17 Overview of Organization Development The Nature of Planned Change 20 21 2-1 Theories of Planned Change 2-1a Lewin’s Change Model 2-1b Action Research Model 2-1c The Positive Model 26 2-1d Comparisons of Change 22 22 24 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 Models 27 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 2-4b Practice of Planned Change 41 40 v vi CONTENTS Summary Notes CHAPT ER 3 42 42 The Organization Development Practitioner 45 3-1 Who Is the Organization Development Practitioner? 46 3-2 Competencies of an Effective Organization Development Practitioner 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 47 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 Notes 67 Appendix PART 2 CHAPT ER 4 66 70 The Process of Organization Development Entering and Contracting 75 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 4-2a Mutual Expectations 81 4-2b Time and Resources 81 4-2c Ground Rules 82 4-3 74 80 Interpersonal Process Issues in Entering and Contracting 82 Application 4.2 Contracting with Alegent Health 83 Summary Notes CHAPT ER 5 87 87 Diagnosing 89 5-1 What Is Diagnosis? 5-2 The Need for Diagnostic Models 91 90 5-3 Open-Systems Model 92 5-3a Organizations as Open Systems 92 5-3b Diagnosing Organizational Systems 94 vii CONTENTS 5-4 Organization-Level Diagnosis 96 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 5-5 102 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 110 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 CHAPT ER 6 119 Collecting, Analyzing, and Feeding Back Diagnostic Information 6-1 The Diagnostic Relationship 123 6-2 Collecting Data 126 6-2a Questionnaires 127 6-2b Interviews 129 6-2c Observations 130 6-2d Unobtrusive Measures 123 131 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 136 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 CHAPT ER 7 Designing Interventions 7-1 Overview of Interventions 157 7-1a Human Process Interventions 157 7-1b Technostructural Interventions 159 7-1c Human Resources Management Interventions 7-1d Strategic Change Interventions 161 160 7-2 What Are Effective Interventions? 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 Notes CHAPT ER 8 157 162 173 175 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 Notes 205 204 ix CONTENTS CHAPT ER 9 Evaluating and Institutionalizing Organization Development Interventions 9-1 Evaluating Organization Development Interventions 9-1a Implementation and Evaluation Feedback 208 9-1b Measurement 211 9-1c Research Design 216 Application 9.1 Evaluating Change at Alegent Health 9-2 Institutionalizing Organizational Changes 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 226 207 207 219 221 Application 9.2 Institutionalizing Structural Change at Hewlett-Packard 227 Summary 229 Notes 229 Selected Cases 232 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 262 PART 3 CHAPT E R 10 Human Process Interventions 264 Interpersonal and Group Process Approaches 265 10-1 Diagnostic Issues in Interpersonal and Group Process Interventions 10-2 Process Consultation 267 10-2a Basic Process Interventions 266 268 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 10-4e The Manager’s Role in Team Building 291 10-4f The Results of Team Building 292 Summary 293 Notes 294 287 x CONTENTS CHAPT E R 11 Organization Process Approaches 297 11-1 Diagnostic Issues in Organization Process Interventions 298 11-2 Organization Confrontation Meeting 298 11-2a Application Stages 299 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 Notes 319 320 Selected Cases 322 Lincoln Hospital: Third-Party Intervention 322 Large Group Interventions at Airbus’ ICT Organization PART 4 CHAPT E R 12 329 Technostructural Interventions 338 Restructuring Organizations 339 12-1 Structural Design 339 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 349 Application 12.1 Healthways’ Process Structure 12-1f The Network Structure 353 350 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 12-2b Results of Downsizing 363 362 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 Notes CHAPT E R 13 371 371 Employee Involvement 13-1 Employee Involvement: What Is It? 376 13-1a A Working Definition of Employee Involvement 376 375 xi CONTENTS 13-1b The Diffusion of Employee Involvement Practices 377 13-1c How Employee Involvement Affects Productivity 377 13-2 Employee Involvement Interventions 13-2a Parallel Structures 379 379 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 CHAPT E R 14 399 Work Design 403 14-1 The Engineering Approach 404 14-2 The Motivational Approach 405 14-2a The Core Dimensions of Jobs 14-2b Individual Differences 407 14-2c Application Stages 407 405 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 PART 5 CHAPT E R 15 Human Resource Interventions 438 Performance Management 439 15-1 A Model of Performance Management 440 15-2 Goal Setting 442 15-2a Characteristics of Goal Setting 15-2b Application Stages 443 442 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 Notes CHAPT E R 16 468 468 Talent Management 473 16-1 Coaching and Mentoring 474 16-1a What Are the Goals? 474 16-1b Application Stages 475 16-1c The Results of Coaching and Mentoring 476 16-2 Management and Leadership Development Interventions 16-2a What Are the Goals? 477 16-2b Application Stages 477 476 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 16-3a What Are the Goals? 481 16-3b Application Stages 482 480 Application 16.2 PepsiCo’s Career Planning and Development Framework 491 16-3c The Results of Career Planning and Development 493 Summary Notes CHAPT E R 17 493 494 Workforce Diversity and Wellness 17-1 Workforce Diversity Interventions 497 17-1a What Are the Goals? 498 17-1b Application Stages 499 17-1c The Results for Diversity Interventions 497 503 17-2 Employee Stress and Wellness Interventions 17-2a What Are the Goals? 504 504 Application 17.1 Aligning Strategy and Diversity at L’Oréal 505 17-2b Application Stages 507 17-2c The Results of Stress Management and Wellness Interventions 513 xiii CONTENTS 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 CHAPT E R 18 Strategic Change Interventions 528 Transformational Change 529 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 18-2a Conceptual Framework 534 18-2b Basic Design Alternatives 535 18-2c Worldwide Organization Design Alternatives 537 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 CHAPT E R 19 563 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 19-3a Conceptual Framework 584 19-3b Organization Learning Interventions 586 19-4 Built-to-Change Organizations 19-4a Design Guidelines 593 593 583 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 Notes CHAPT E R 20 601 602 Transorganizational Change 20-1 Transorganizational Rationale 605 606 20-2 Mergers and Acquisitions 607 20-2a Application Stages 608 Application 20.1 Planning the United–Continental Merger 613 20-3 Strategic Alliance Interventions 20-3a Application Stages 616 616 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 Summary Notes 627 631 632 Selected Cases 636 Global Mobile Corporation 636 Leading Strategic Change at DaVita: The Integration of the Gambro Acquisition 645 PART 7 CHAPT E R 21 Special Applications of Organization Development 658 Organization Development for Economic, Ecological, and Social Outcomes 21-1 Sustainable Management Organizations 21-1a Design Guidelines 660 21-1b Application Stages 667 21-2 Global Social Change 670 21-2a Global Social Change Organizations 659 659 670 Application 21.1 Interface Carpet’s Transformation to Sustainability 21-2b Application Stages 674 21-2c Change-Agent Roles and Skills 677 671 Application 21.2 Social and Environmental Change at LDI Africa 678 Summary Notes CHAPT E R 22 681 682 Organization Development in Nonindustrial Settings: 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 687 685 CONTENTS xv 22-1c Opportunities for Organization Development Practice 690 22-1d Conclusions 693 22-2 Organization Development in Public School Systems 693 22-2a A Complex, Diverse, and Evolving K-12 Educational System 693 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 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 719 711 Summary 725 Notes CHAPT E R 23 726 Future Directions in Organization Development 23-1 Trends Within Organization Development 23-1a Traditional Trend 732 23-1b Pragmatic Trend 733 23-1c Scholarly Trend 733 23-1d Implications for OD’s Future 734 731 732 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 784 Name Index 793 Subject Index 797 © 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 edition, 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 society, 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 aftermath 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 happen 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 optimistic 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. Businesses 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 promulgation 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 suggested 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 example, 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 organization 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 making, 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 description 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 feedback 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 development. 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 disguised 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 several 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 practice for others is gratefully acknowledged. Cases At the end of each major part in the book, we have included cases to permit a more indepth 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 Instructor’s Manual is available, which contains material that can improve the student’s appreciation 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 assumptions 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 developed to assist instructors in preparing for case discussions. The notes provide an outline 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 operating 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 Department 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. However, 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 previous 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 Palos Verdes Estates, California August, 2013 Christopher G. Worley San Juan Capistrano, California Lyon, France © Pixmann/Imagezoo/Getty Images About the Authors Thomas G. Cummings, professor, chair of the Department of Management and Organization, 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 interests include designing high-performing organizations and strategic change management. 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 Organizations (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 organization 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/ Getty Images 1 General Introduction to Organization Development learning objectives Define and describe the practice and study of organization development (OD). Describe the history and relevance of OD. Distinguish OD and planned change from other forms of organization change. T his is a book about organization development (OD)—a process that applies a broad range of behavioral science knowledge and practices to help organizations build their capability to change and to achieve greater effectiveness, including increased financial performance, employee satisfaction, and environmental sustainability. Organization development differs from other planned change efforts, such as project management or product innovation, because the focus is on building the organization’s ability to assess its current functioning and to make necessary changes to achieve its goals. Moreover, OD is oriented to improving the total system—the organization and its parts in the context of the larger environment that affects them. This book reviews the broad background of OD and examines assumptions, strategies and models, intervention techniques, and other aspects of OD. This chapter provides an introduction to OD, describing first the concept of OD itself. Second, it explains why OD has expanded rapidly in the past 60 years, both in terms of people’s need to work with and through others in organizations and in terms of organizations’ need to adapt in a complex and changing world. Third, it reviews briefly the history of OD, and fourth, it describes the evolution 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 seemingly 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 CHAPTER 1 GENERAL INTRODUCTION TO ORGANIZATION DEVELOPMENT 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 process 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 organization 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 science 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) developing new and creative organizational solutions; and (3) developing the organization’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 systemwide 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 © Cengage Learning 2 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 organization’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 communicating 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 system, such as technological innovation or quality control. In these approaches, attention is narrowed to improvement of particular products or processes, or to development of production 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, technological 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 discovered 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 longerterm concern for making sure the new activities sustain within the organization. For example, 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 perspectives 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 productivity. Finally, an effective organization has an engaged, satisfied, and learning workforce as well as satisfied and loyal customers or other external stakeholders. The organization’s performance responds to the needs of external groups, such as stockholders, 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 engineering focuses on productivity. Organization development can be distinguished from change management and organizational 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 competitive 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 organizations 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 international borders have intensified the economic interdependence among nations and organizations. This globalization opens new markets and sources of innovation and capital 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 tensions 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 underscore 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 innovation is not expected to decline. Cloud computing—a state-of-the-art technology application a few years ago—is now considered routine business practice. Digital publishing and online courses are transforming how we deliver knowledge and education. The ability 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. Information is also being widely shared throughout the organization. This reduces the concentration 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 technology 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 implementation. 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 organization 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 private 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 innovating and managing change, rather than simply responding to what has already happened. Organization development plays a key role in helping organizations change themselves. 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 institutions, 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 opportunities 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’ performance. 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 personnel 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 strategic change and organization transformation. ® FIGURE 1.1 © Cengage Learning The Five Stems of OD Practice 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 processes 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 satisfying 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 organization’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 students 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 development 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 companywide 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 process for change. In 1950, eight accounting departments asked for a repeat of the survey, thus generating a new cycle of feedback meetings. In four departments, feedback approaches were used, but the method varied; two departments received feedback only at the departmental 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 several 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 relations 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 occasional 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 decisions, management still makes the final decisions. Productivity is good, and employees 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. Communication 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 examined the discrepancy between their present situation and their ideal, generally using System 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, making 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 concern for production but a low concern for people: They minimize the attitudes and feelings 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 developing 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 methods 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, technology, and other forces in determining the appropriate organization design and management 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 participation by unions and management in the design of work and resulted in work designs giving employees high levels of discretion, task variety, and feedback about results. Perhaps the most distinguishing characteristic of these QWL programs was the discovery of selfmanaging work groups as a form of work design. These groups were composed of multiskilled 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 primarily 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 international 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 satisfaction, 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 critical 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 environment, 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 previous 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...
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