CHANGE IMPLEMENTATION: OD MODELS:The Transactional Factors

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Change Management MGMT625

Lesson # 43

CHANGE IMPLEMENTATION: OD MODELS

Earlier we discussed three implementation approaches in our previous which were:

1. Logical Incrementalism

2. Transformational or Revolutionary Change

3. Punctuated Equilibrium Model

And now in this lesson at first we will be discussing Organization Development (OD) model

and subsequently we will study the Burke-Litwin Model of Organizational Change.

Organization Development Model

In studying the change management, one might think of differentiating the two disciplines: OD

and Change Management (CM). Apparently it seems both are relatively parallel to each other.

It means that most of the things which we have covered in change management course are also

be the subject matter of organizational development. So, then the question is: Is OD and CM

are the same disciplines or there exist any kind of difference between them?

To answering this question, we need to have an in-depth knowledge about the evolution of

both OD and CM disciplines. However in broader terms, we can say that OD deals with the

internal dynamics of the organization which sometimes identified as `Orgonomics.' From the

post World War - II era until early 1980s, the OD discipline proved itself to be very successful

amongst organizations' strategists, consultants and management practitioners. But it has lost its

vigor, enormity and strengths from early 80s because of emerging changes and challenges

external to organizations such as oil crisis and regional wars. In the wake of this Change

Management has emerged as more comprehensive and profound discipline for dealing with

intricacies of both internal and external environment.

Defining Organization Development

OD is a planned and sustained effort to apply behavioral science for system improvement,

using reflexive and self analytic methods.

(Schmuck and Miles, 1971)

OD is a process of planned change, change of an organization culture from one which

avoids an examination of social processes especially decision making, planning, and

communication - to one which institutionalizes and legitimizes this examination.

(Burke and Herrnstein, 1972)

In both the definitions, we have seen that the change restoration in an organization is a

deliberate or planned process which requires appropriate scientific techniques and careful

interplay among different variables such as strategy, structure, technology, and leadership for

achieving sustainability, productivity, and innovation.

Historical Context of Organization Development

Here we need to discuss the historical context of change management thought itself which can

help us in rediscovering and understanding the relevance of ideas and practices of the given

discipline. This may give us insights, ideas, and the conceptual underpinnings of management

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theory and practice as well. In principles of management course we have already studied

different theories and approaches to management which Koontz termed as, a `management

theory jungle'. This give us an idea to review the literature for change management as well,

which could be worth studying for who are further interested in specializations in management

disciplines. The review reveals significantly that change management theories ad practices are

also bound and conditioned by time and space. For instance in today's context change

management experts are now stressing on the revised version of OD which is based on

empowerment paradigm, delegation, decentralization and participative decision making. The

authority, line and communication system structure should be multi-dimensional, multi-

directional and hybrid one which could have the ability to achieve the modern standards such

as consultancy, information sharing, knowledge worker and knowledge management paradigm

that have been revealed in modern researches. Because, it is now considered that effective

management has to start with subordinates or at operational level. However, the same OD

model, dates back to theorizing in early twentieth century, had been based on the assumptions

that were exactly opposite to what we have today. Even Frederick W. Taylor, who is widely

acknowledged as `the father of scientific management', has been reviewed as the one who

made the organization a rigid or sometimes a hegemonic body. In brief, Taylor's answer to the

problem of productivity - the split in thinking between pay and profits - was a derivative of

from the application of scientific methods, instead of custom and rule of thumb, carried only

managerial solutions at that time, and which is increasingly looked at critically now a days.

Despite the inexactness and early hegemonic theorizing, the OD model had achieved the

successful status in all over the world in post world war II era till the end of 1970s. But what

happened after that? Organization strategists and theorists had observed that OD has certain

limitations and hence unable to address certain aspects of the organizations. They also

observed that it worked effectively for organizations in growth phase of business cycles and

badly stagnated at late maturity stage of business cycles. At this point, OD as a discipline

evolved to a new discipline `Change Management' which has the ability to incorporate both

internal and external environments effectively. And this evolution had changed the earlier

established assumptions to the new ones such as empowerment, delegation, decentralization

and participative decision making.

Second, this evolution also caused a revolutionary shift from underlying scientific approach to

cultural approach in management. As Taylor believed that there is always one best way

available to deal any particular thing and the operationalists also generally assumed that the

fundamentals of management are universal in nature and application. Similarly, the scientific

approach is also the working for universalization of any phenomenon across time and space.

On the other hand, acceptance of such managerial principles like decentralization, delegation

and participative will be nullifying the assumption that management is something thing which

is universal. The concepts such as multiple-rationality, equi-finality and multiculturalism are

also there to show the relevance and validity of the claim that management principles are

culturally based. Therefore there could be multiple and many ways for doing something. This

lead to the formation of management school which believes that there are distinct cultural ways

of management in different organizations across various cultural entities.

Attributes of Organization Development model

From an OD framework, we have number of models highlighting multiple levels of

complexities and depths, including Kurt Lewin model, and in general we have found some

common attributes that exist almost in every recognized model. These are:

1. assumptions of planned change

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2. a frame work to diagnose the problems

3. a cause and effect linkage for visualizing the domain of problems

4. supremacy of the process for rectification or feedback loop

5. predictability or causality

Burke Litwin Model of Organizational Change

Burke Litwin model is based on organizational performance and change by exploring the

interplay between organizational functioning and organizational change. Change is depicted in

terms of both process and content, with particular emphasis on transformational as compared

with transactional factors. Transformational change occurs as a response to the external

environment and directly affects organizational mission and strategy, the organization's

leadership, aid culture, In turn; the transactional factors are affected by structure, systems,

management practices, and climate. These transformational and transactional factors together

affect motivation, which, in turn, affects performance. It can be applied to both individual and

organisational performance. The model is given as under:

Figure 1

A Model of Organizational Performance and Change;

The Transformational Factors

Transformational and Transactional Dynamics

The model shows how to create first-order change and second-order change (this author calls

as transactional change and transformational change). The concept of transformational change

in organizations is suggested in the writings of such people as Bass (1985), Burke (1986),

Burns (1978), McClelland (1975), and Tichy and Devanna (1986). The above figure 1 contains

a display of the transformational variables in the upper half of the model. By

transformational we mean areas in which alteration is likely caused by interaction with

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environmental forces (from both within and without) and will require entirely new behavior

sets from organizational members.

It is true, of course, that members can influence their organization's environment so that certain

influence of the changes are minimized (e.g., lobbying activities, forming or being involved in

trade associations and coalitions). The feedback loop, designed by authors, in the model is

meant to reflect this kind of influence. Our point here is that for the most part organization

change is initiated by forces from the organization's external environment, for examples

changes in the competitive environment, government regulations and technological

breakthroughs, and is quite decisive in influencing organizational change.

Figure 2 contains the transactional variables - the lower half of the model. By transactional the

authors mean that the primary way of alteration is via relatively short-term reciprocity among

people and groups. In other words, "You do this for me and I'll do that for you."

Figure 2

A Model of Organizational Performance and Change;

The Transactional Factors

Organizational Climate and Organizational CultureThis model also distinguishes between

organisational climate and organisational culture. Organisational climate is defined as people's

perception and attitude that strongly affected by organizational conditions (e.g., systems,

structure, manager behaviour, etc). The resultant psychological state could be good or bad,

friendly or unfriendly, hard-working or easy going. These perceptions are relatively easier to

change because they are built on employees reaction to current organisational and managerial

practices

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The concept of culture, drawn from anthropology by authors, is meant to describe the relatively

enduring set of values and norms that underlie a social system. These underlying values and

norms may not be entirely available to one's consciousness. They are thought to describe a

"meaning system" that allows members of that social system to attribute meanings and values

to the variety of external and internal events that are experienced. Changing culture is much

more difficult than changing climate.

When we describe culture as the underlying values and meaning systems of an organization,

we describe those forces that create the dimensions of climate, those underlying ideas and

images around which specific attitudes and behaviors cluster. Thus, when we attempt to alter

the organizational culture, we change the climate framework (i.e. the gauge by which

organizational members perceive their work climate). While, the day-to-day climate will be a

result of transactions around such issues as:

Sense of direction: effect of mission's clarity or lack thereof.

Role and responsibility: effect of structure reinforced by manager practice.

Standards and commitment: effect of manager practice, reinforced by culture.

Fairness of rewards: effect of systems, reinforced by manager practice.

Focus on customer versus internal pressures, standards of excellence: effect of culture,

reinforced by other variables.

The Model

The total of 12 boxes represents the choice of organizational variables by the authors consider

to be the most important ones. In addition, they also have attempted to account for key

variables at a total system level, with such variables as mission, strategy, and culture, at a

group or local work unit level (e.g., climate) and at an individual level (e.g., motivation,

individual needs and values, and job-person match).

A change in one (or more) "box (es)" will eventually have an impact on the others. Moreover,

if we could diagram the model such that the arrows would be more circular - the hologram idea

- reality could be represented more accurately. Yet this is a causal model. For example, though

culture and systems affect one another, we believe culture has a stronger influence on systems

than vice versa. Kerr and Slocum {1987), for example, have provided data that suggest a

strong linkage between corporate culture and the organization's reward system. They show

how a company's reward system is a manifestation of its culture. They also point out that the

organization's reward system can be used to help change the company's culture. Their data lend

support to the linkage notion. We would simply take their evidence and suggest a step further

by arguing that corporate culture (beliefs and values) determine the type of reward system an

organization has. Yet we would strongly agree that to change culture the reward system should

be used (i.e., to reward the behaviors that would reflect the new values - we might wish to

incorporate).

For major organizational change to occur, the top transformational boxes represent the primary

and significant levers for that change. Examples from our experience include the followings:

(a) An acquisition where the acquired organization's culture, leadership, and business

strategy were dramatically different from the acquiring organization, even though both

organizations were in the same industry, requiring yet a new merged organization to

come about,

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(b) A federal agency where the mission had been modified, the structure and leadership

changed significantly, yet the culture remained that of the 1960s.

negatively, the strategy was unclear and internal politics had moved from minimal

(before) to predominant (after). The hue and cry in this latter high-tech organization

was something like, "we have no direction from our leaders and no culture to guide our

behavior in the meantime." These examples represent transformational changes (i.e. the

need for some fundamental shifts).

To summarize, the model shown in the above two figures attempts to portray the primary

variables that need to be considered in any attempt to predict and explain the total behavioural

output of an organization - the most important interactions between these variables, and how

they affect change. Other related premises are:

1. Interventions directed toward structure, management practices, and systems (policies and

procedures) result in first-order change;

2. Interventions directed toward mission and strategy, leadership and organisational culture

result in second-order change.

The model also makes a distinction between the transaction and transformational leadership

style. Transformational leaders are the one who inspires followers to transcend their self-

interest for the good of the organization and who are capable of having a profound and extra-

ordinary effect on their followers. While transactional leaders guide their followers in the

direction of established goals by clarifying role and task requirements.

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