General Model of Planned Change:Entering and Contracting, Magnitude of Change

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Organization Development MGMT 628

Lesson 09

General Model of Planned Change

The three theories of planned change in organizations described above--Lewin's change model, the action

research model, and contemporary adaptations to the action research model--suggest a general framework

for planned change, as shown in Fig. 10. The framework describes the four basic activities that practitioners

and organization members jointly carry out in organization development. The arrows connecting the

different activities in the model show the typical sequence of events, from entering and contracting, to

diagnosing, to planning and implementing change, to evaluating and institutionalizing change. The lines

connecting the activities emphasize that organizational change is not a straightforward, linear process but

involves considerable overlap and feedback among the activities.

Figure: 08

Entering and Contracting:

The first set of activities in planned change concerns entering and contracting. Those events help managers

decide whether they want to engage further in a planned change program and to commit resources to such

a process. Entering an organization involves gathering initial data to understand the problems facing the

organization or the positive opportunities for inquiry. Once this information is collected, the problems or

opportunities are discussed with managers and other organization members to develop a contract or

agreement to engage in planned change. The contract spells out future change activities, the resources that

will be committed to the process, and how OD practitioners and organization members will be involved. In

many cases, organizations do not get beyond this early stage of planned change because disagreements

about the need for change surface, resource constraints are encountered, or other methods for change

appear more feasible. When OD is used in nontraditional and international settings, the entering and

contracting process must be sensitive to the context in which the change is taking place.

Diagnosing:

In this stage of planned change, the client system is carefully studied. Diagnoses can .focus on

understanding organizational problems, including their causes and consequences, or on identifying the

organization's positive attributes. The diagnostic process is one of the most important activities in OD. It

includes choosing an appropriate model for understanding the organization and gathering, analyzing, and

feeding back information to managers and organization members about the problems or opportunities that

exist.

Diagnostic models for analyzing problems explore three levels of activities. Organization issues represent

the most complex level of analysis and involve the total system. Group-level issues are associated with de-

partment and group effectiveness. Individual-level issues involve the way jobs are designed.

Gathering, analyzing, and feeding back data are the central change activities in diagnosis. Describes how

data can be gathered through interviews, observations, survey instruments, or such archival sources as

meeting minutes and organization charts. It also explains how data can be reviewed and analyzed.

Organization members, often in collaboration with an OD practitioner, jointly discuss the data and their

implications for change.

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Planning and Implementing Change:

In this stage, organization members and practitioners jointly plan and implement OD interventions. They

design interventions to achieve the organization's vision or goals and make action plans to implement them.

There are several criteria for designing interventions, including the organization's readiness for change, its

current change capability, its culture and power distributions, and the change agent's skills and abilities.

Depending on the outcomes of diagnosis, there are four major types of interventions in OD:

Human process interventions at the individual, group, and total system levels.

Interventions that modify an organization's structure and technology.

Human resource interventions that seek to improve member performance and wellness.

Strategic interventions that involve managing the organization's relationship to its external

environment and the internal structure and process necessary to support a business strategy.

Implementing interventions is concerned with managing the change process. It includes motivating change,

creating a desired future vision of the organization, developing political support, managing the transition

toward the vision, and sustaining momentum for change.

Evaluating and Institutionalizing Change:

The final stage in planned change involves evaluating the effects of the intervention and managing the

institutionalization of successful change programs. Feedback to organization members about the

intervention's results provides information about whether the changes should be continued, modified, or

suspended. Institutionalizing successful changes involves reinforcing them through feedback, rewards, and

training. It demonstrates how traditional planned change activities, such as entry and contracting, survey

feedback, and change planning, can be combined with contemporary methods, such as large-group

interventions and high levels of participation.

Different types of Planned Change:

The general model of planned change describes how the OD process typically un-folds in organizations. In

actual practice, the different phases are not nearly as orderly as the model implies. OD practitioners tend to

modify or adjust the stages to fit the needs of the situation. Steps in planned change may be implemented

in a variety of ways, depending on the client's needs and goals, the change agent's skills and values, and the

organization's context. Thus, planned change can vary enormously from one situation to another.

To understand the differences better, planned change can be contrasted across situations on three key

dimensions: the magnitude of organizational change, the degree to which the client system is organized, and

whether the setting is domestic or international.

Magnitude of Change:

Planned change efforts can be characterized as falling along a continuum ranging from incremental changes

that involve fine-tuning the organization to quantum changes that entail fundamentally altering how it

operates. Incremental changes tend to involve limited dimensions and levels of the organization, such as

the decision-making processes of work groups. They occur within the context of the organization's existing

business strategy, structure, and culture and are aimed at improving the status quo. Quantum changes, on

the other hand, are directed at significantly altering how the organization operates. They tend to involve

several organizational dimensions, including structure, culture, reward systems, information processes, and

work design. They also involve changing multiple levels of the organization, from top-level management

through departments and work groups to individual jobs.

Planned change traditionally has been applied in situations involving incremental change. Organizations in

the 1960s and 1970s were concerned mainly with fine-tuning their bureaucratic structures by resolving

many, of the social problems that emerged with increasing size and complexity. In those situations, planned

change involves a relatively bounded set of problem-solving activities. OD practitioners are typically

contracted by managers to help solve specific problems in particular organizational systems, such as poor

communication among members of a work team or low customer satisfaction scores in a department store.

Diagnostic and change activities tend to be limited to the defined issues, although additional problems may

be uncovered and may need to be addressed. Similarly, the change process tends to focus on those

organizational systems having specific problems, and it generally terminates when the problems are

resolved. Of course, the change agent may contract to help solve additional problems.

In recent years, OD has been concerned increasingly with quantum change. The greater competitiveness

and uncertainty of today's environment have led a growing number of organizations to alter drastically the

way in which they operate. In such situations, planned change is more complex, extensive, and long term

than when applied to incremental change. Because quantum change involves most features and levels of the

Organization Development MGMT 628

organization, it is typically driven from the top, where corporate strategy and values are set. Change agents

help senior managers create a vision of a desired future organization and energize movement in that

direction. They also help executives develop structures for managing the transition from the present to the

future organization and may include, for example, a variety of overlapping steering committees and

redesign teams. Staff experts also may redesign many features of the firm, such as performance measures,

rewards, planning processes, work designs, and information systems.

Because of the complexity and extensiveness of quantum change, OD professionals often work in teams

comprising members with different yet complementary areas of expertise. The consulting relationship

persists over relatively long time periods and includes a great deal of renegotiation and experimentation

among consultants and managers. The boundaries of the change effort are more uncertain and diffuse than

in incremental change, thus making diagnosis and change seem more like discovery than like problem

solving.

It is important to emphasize that quantum change may or may not be developmental in nature.

Organizations may drastically alter their strategic direction and way of operating without significantly

developing their capacity to solve problems and to achieve both high performance and quality of work life.

For example, firms may simply change their marketing mix, dropping or adding products, services, or

customers; they may drastically downsize by cutting out marginal businesses and laying off managers and

workers; or they may tighten managerial and financial controls and attempt to squeeze more out of the

labor force. On the other hand, organizations may undertake quantum change from a developmental

perspective. They may seek to make themselves more competitive by developing their human resources; by

getting managers and employees more involved in problem solving and innovation; and by promoting

flexibility and direct, open communication. That OD approach to quantum change is particularly relevant

in today's rapidly changing and competitive environment. To succeed in this setting, major multinational

organizations (firms such as General Electric, Kimberly-Clark, ABB, Hewlett-Packard, and Motorola) are

transforming themselves from control-oriented bureaucracies to high-involvement organizations capable of

changing and improving themselves continually.

Degree of Organization:

Planned change efforts also can vary depending on the degree to which the organization or client system is

organized. In over organized situations, such as in highly mechanistic, bureaucratic organizations, various

dimensions such as leadership styles, job designs, organization structure, and policies and procedures are

too rigid and overly defined for effective task performance. Communication between management and

employees is typically suppressed, conflicts are avoided, and employees are apathetic. In under organized

organizations, on the other hand, there is too little constraint or regulation for effective task performance.

Leadership, structure, job design, and policy are poorly defined and fail to control task behaviors effective-

ly. Communication is fragmented, job responsibilities are ambiguous, and employees' energies are

dissipated because they lack direction. Underorganized situations are typically found in such .areas as

product development, project management, and community development, where relationships among

diverse groups and participants must be coordinated around complex, uncertain tasks.

In over organized situations, where much of OD practice has historically taken place, planned change is

generally aimed at loosening constraints on behavior. Changes in leadership, job design, structure, and

other features are designed to liberate suppressed energy, to increase the flow of relevant information

between employees and managers, and to promote effective conflict resolution. The typical steps of

planned change -- entry, diagnosis, intervention, and evaluation -- are intended to penetrate a relatively

closed organization or department and make it increasingly open to self-diagnosis and revitalization. The

relationship between the OD practitioner and the management team attempts to model this loosening

process. The consultant shares leadership of the change process with management, encourages open

communications and confrontation of conflict, and maintains flexibility in relating to the organization.

When applied to organizations facing problems in being under organized, planned change is aimed at

increasing organization by clarifying leadership rules, structuring communication between, managers and

employees, and specifying job and departmental responsibilities. These activities require a modification of

the traditional phases of planned change and include the following four steps.

1. Identification: This step identifies the relevant people or groups who need to be involved in the change

program. In many under organized situations, people and departments can be so disconnected that there is

ambiguity about who should be included in the problem-solving process. For example, when managers of

different departments have only limited interaction with each other, they may disagree or be confused

about which departments should be involved in developing a new product or service.

2. Convention: In this step the relevant people or departments in the company are brought together to

begin organizing for task performance. For example, department, managers might be asked to attend a

Organization Development MGMT 628

series of organizing meetings to discuss the division of labor and the coordination required to introduce a

new product.

3. Organization: Different organizing mechanisms are created to structure the newly required interactions

among people and departments. This might include creating new leadership positions, establishing

communication channels, and specifying appropriate plans and policies.

4. Evaluation: In this final step the outcomes of the organization step are assessed. The evaluation might

signal the need for adjustments in the organizing process or for further identification, convention, and

organization activities.

In carrying out these four steps of planned change in under organized situations, the relationship between

the OD practitioner and the client system attempts to reinforce the organizing process. The consultant

develops a well-defined leadership role, which might be autocratic during the early stages of the change

program. Similarly, the consulting relationship is clearly defined and tightly specified. In effect, the

interaction between the consultant and the client system supports the larger process of bringing order to

the situation.

Domestic vs. International Settings:

Planned change efforts traditionally have been applied in North American and European settings but

increasingly are used outside of those cultures. Developed in western societies, the action research model

reflects the underlying values and assumptions of these geographic settings, including equality, involvement,

and short-term time horizons. Under such conditions, the action research model works quite well. In other

societies, however, a very different set of cultural values and assumptions may operate and make the

application of OD problematic. For example, the cultures of most Asian countries are more hierarchical

and status conscious, are less open to discussing personal issues, more concerned with saving "face," and

have a longer time horizon for results. Even when the consultant is aware of the cultural norms and values

that permeate the society; those cultural differences make the traditional action research steps more difficult

for a North American or European consultant to implement.

The cultural values that guide OD practice in the United States, for example, include a tolerance for

ambiguity, equality among people, individuality, and achievement motives. An OD process that encourages

openness among individuals, high levels of participation, and actions that promote increased effectiveness

are viewed favorably. The OD practitioner is also assumed to hold those values and to model them in the

conduct of planned change. Most reported cases of OD involve western-based organizations using

practitioners trained in the traditional model and raised and experienced in western society.

When OD is applied outside of the North American or European context (and sometimes even within

those settings), the action research process must be adapted to fit the cultural context. For example, the

diagnostic phase, which is aimed at understanding the current drivers of organization effectiveness, can be

modified in a variety of ways. Diagnosis can involve many organization members or include only senior

managers; be directed from the top, conducted by an outside consultant, or performed by internal

consultants; or involve face-to-face interviews or organization documents. Each step in the general model

of planned change must be carefully mapped against the cultural context.

Conducting OD in international settings is highly stressful on OD practitioners. To be successful, they

must develop a keen awareness of their own cultural biases, be open to seeing a variety of issues from

another perspective, be fluent in the values and assumptions of the host country, and understand the

economic and political context of business there. Most OD practitioners are not able to meet all of those

criteria and adopt a "cultural guide," often a member of the organization, to help navigate the cultural,

operational, and political nuances of change in that society.

Critique of Planned Change:

Despite their continued refinement, the models and practice of planned change are still in a formative stage

of development, and there is considerable room for improvement. Critics of OD have pointed out several

problems with the way planned change has been conceptualized and practiced.

Conceptualization of Planned Change:

Planned change has typically been characterized as involving a series of activities for carrying out effective

organization development. Although current models outline a general set of steps to be followed,

considerably more information is needed to guide how those steps should be performed in specific

situations. In an extensive review and critique of planned change theory, Porras and Robertson argued that

planned change activities should be guided by information about (1) the organizational features that can be

changed, (2) the intended outcomes from making those changes, (3) the causal mechanisms by which those

outcomes are achieved, and (4) the contingencies upon which successful change depends. In particular,

Organization Development MGMT 628

they noted that the key to organizational change is change in the behavior of each member and that the

information available about the causal mechanisms that produce individual change is lacking. Overall,

Porras and Robertson concluded that the necessary information to guide change is only partially available

and that a good deal more research and thinking are needed to fill the gaps.

A related area where current thinking about planned change is deficient is knowledge about how the stages

of planned change differ across situations. Most models specify a general set of steps that are intended to

be applicable to most change efforts. We already know, however, how change activities can vary depending

on such factors as the magnitude of change, the degree to which the client system is organized, and

whether change is being conducted in a domestic or an international setting. Considerably more effort

needs to be expended identifying situational factors that may require modifying the general stages of

planned change. That would likely lead to a rich array of planned change models, each geared to a specific

set of situational conditions. Such contingency thinking is sorely needed in planned change.

Planned change also tends to be described as a rationally controlled, orderly process. Critics have argued

that although this view may be comforting, it is seriously misleading. They point out that planned change

has a more chaotic quality, often involving shifting goals, discontinuous activities, surprising events, and

unexpected combinations of changes. For example, managers often initiate changes without clear plans that

clarify their strategies and goals. As change unfolds, new stakeholders may emerge and demand

modifications reflecting previously unknown or unvoiced needs. Those emergent conditions make planned

change a far more disorderly and dynamic process than is customarily portrayed, and conceptions need to

capture that reality.

Finally, the relationship between planned change and organizational performance and effectiveness is not

well understood. OD traditionally has had problems assessing whether interventions are producing

observed results. The complexity of the change situation, the lack of sophisticated analyses, and the long

time periods for producing results have contributed to weak evaluation of OD efforts. Moreover, managers

have often accounted for OD efforts with post hoc testimonials, reports of possible future benefits, and

calls to support OD as the right thing to do. In the absence of rigorous assessment and measurement, it is

difficult to make resource allocation decisions about change programs and to know which interventions are

most effective in certain situations.

Practice of Planned Change:

Critics have suggested several problems with the way planned change is carried out. Their concerns are not

with the planned change model itself but with how change takes place and with the qualifications and

activities of OD practitioners.

A growing number of OD practitioners have acquired skills in a specific technique, such as team building,

total quality management, large-group interventions, or gain sharing and have chosen to specialize in that

method. Although such specialization may be necessary, it can lead to a certain myopia given the complex

array of techniques that make up modern OD. Some OD practitioners favor particular techniques and

ignore other strategies that might be more appropriate, tending to interpret organizational problems as

requiring the favored technique. Thus, for example, it is not unusual to see consultants pushing such

methods as diversity training, reengineering, organization learning, or self-managing work teams as so-

lutions to most organizational problems.

Effective change depends on a careful diagnosis of how the organization is functioning. Diagnosis

identifies the underlying causes of organizational problems, such as poor product quality and employee

dissatisfaction. It requires both time and money, and some organizations are not willing to make the

necessary investment. Rather, they rely on preconceptions about what the problem is and hire consultants

with skills appropriate to solve that problem. Managers may think, for example, that work design is the

problem, so they hire an expert in job enrichment to implement a change program. The problem may be

caused by other factors such as poor reward practices, however, and job enrichment would be

inappropriate. Careful diagnosis can help to avoid such mistakes.

In situations requiring complex organizational changes, planned change is a long-term process involving

considerable innovation and learning on site. It requires a good deal of time and commitment and a

willingness to modify and refine changes as the circumstances require. Some organizations demand more

rapid solutions to their problems and seek quick fixes from experts. Unfortunately, some OD consultants

are more than willing to provide quick solutions. They sell prepackaged programs for organizations to

adopt. Those programs appeal to managers because they typically include an explicit recipe to be followed,

standard training materials, and clear time and cost boundaries. The quick fixes have trouble gaining wide

organizational support and commitment, however, and they seldom produce the positive results that have

been advertised.

Other organizations have not recognized the systemic nature of change. Too often they believe that

intervention into one aspect or subpart of the organization will be sufficient to ameliorate the problems,

Organization Development MGMT 628

and are unprepared for the other changes that may be necessary to support a particular intervention. For

example, at GTE of California, the positive benefits of an employee involvement program did not begin to

appear until after the organization redesigned its reward system to support the cross-functional

collaboration necessary to solve highly complex problems. Changing any one part or feature of an

organization often requires adjustments in the other parts to maintain an appropriate alignment. Thus,

although quick fixes and change programs that focus on only one part or aspect of the organization may

resolve some specific problems, they generally do not lead to complex organizational change or increase

members' capacity to carry out change.

Case: The Dim Lighting Co.

The Dim Lighting Company is a subsidiary of a major producer of electrical products. Each subsidiary

division operates as a profit center and reports to regional, group, and product vice presidents at corporate

headquarters. The Dim Lighting subsidiary produces electric lamps and employs about 2,000 workers. The

general manager is Jim West, an MBA from Wharton, who has been running this subsidiary successfully for

the past five years. However, last year the division failed to realize its operating targets, and profit margins

dropped by 15 percent. In developing next year's budget and profit plan, Jim West feels that he is under

pressure to have a good year because two bad years in a row might hit his long-term potential for

advancement.

Mr. Spinks, Director of R&D

Robert Spinks, director of R&D, was hired by West three years ago, after resigning from a major

competitor. Mr. Spinks has received a number of awards from scientific societies. The scientists and

engineers in his group respect his technical competence and have a high level of morale.

Although Spinks is recognized as a talented scientist, other managers feel that he is often autocratic, strong-

willed, and impatient. Spins left his former company because management lacked creativity and innovation

in R&D.

The Proposal

Spinks has submitted a budget request for a major research project, the micro-miniaturization of lighting

sources so as to greatly reduce energy requirements. He sees this as the Lamp of the Future. The proposed

budget requires $250,000 per year for two years, plus another $300,000 to begin production. Jim West

immediately contacted corporate headquarters, and although top management praised the idea, they were

reluctant to spend on the proposed project. Spinks feels the project has a 70 percent chance of success, and

will develop a net cash flow of $1 million by the third year.

The Budget Meeting

West called a meeting of his management group to discuss the proposed budget. Spinks presented a well-

reasoned and high-powered sales pitch for his project. He suggested that the energy crunch had long-term

implications, and if they failed to move into new technologies, the firm would be competitively obsolete.

Carol Preston, accountant, presented a financial analysis of the proposed project, noting the high risk, the

uncertain results, the length of time before it would contribute to operating profits. "These scientists are

prima donnas, who can afford to wait for long-term results. Unfortunately, if we don't do something about

the bottom line right now, we may not be here to enjoy it," she noted.

Bill Boswell, production manager, agreed with Preston: "We need new machinery for our production line

also, and that has a very direct payback."

Pete Newell, marketing, agreed with Spinks: "I don't feel we can put our heads in the sand. If we don't

keep up competitively, how will our salespeople be able to keep selling obsolete lighting products? Besides,

I'm not sure that Carol's figures are completely accurate in measuring the actual return on this low-energy

project." A stormy debate followed, with heated arguments both for and against the project, until West

called the meeting to a halt.

Later, thinking it over in his office, West considered the situation. Going ahead with the micro-

miniaturization project was a big gamble. But if he decided against it, it was quite possible that .Spinks

would resign, which would shatter the R&D department he had worked so hard to assemble.

Case Analysis Form

Name: ____________________________________________

I. Problems

A. Macro

1. ____________________________________________________

2. ____________________________________________________

B. Micro

1. _____________________________________________________

2. _____________________________________________________

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II. Causes

1. _____________________________________________________

2. _____________________________________________________

3. _____________________________________________________

III. Systems affected

Structural ____________________________________________

Psychosocial __________________________________________.

Technical ______________________________________________

Managerial _____________________________________________

Goals and values __________________________________________

IV. Alternatives

1. _________________________________________________________

2. _________________________________________________________

3. ________________________________________________________

V. Recommendations

1. _________________________________________________________

2. __________________________________________________________

3. __________________________________________________________

Case Solution: The Dim Lighting Co.

I. Problems:

A. Macro

Will Dim Lighting be reactive?

Will Dim Lighting be proactive?

B. Micro

Will Jim West be influenced by thoughts of what a second year of un-obtained targets will

do to

his career in making this budget decision?

West feels threatened every time Spinks does not receive his demands or "wish list."

II. Causes:

Previous unprofitable year.

Spinks' past history of leaving a company that "lacked creativity and innovation".

III. Systems affected:

Structural the structure is a traditional functional structure. This may not encourage the

development of new products and ideas.

Psychosocial other departments feel threatened by Spinks. Also, Jim West feels he is

under

pressure to improve the profit margins immediately.

Technical both the production manager and Spinks want money to upgrade technical

aspects of the company.

Managerial West feels caught between being innovative and trying to improve the bottom line

immediately.

Goals and values corporate headquarters does not seem to value risk taking and moving into

new projects. If their rejection of the lighting proposal is indicative of their decisions,

the company

as a whole may become entrenched in old technology.

IV. Alternatives:

Before making a budget decision, West should contact corporate offices to see if

additional

funds are available for R&D. Spinks' project would have a long-term effect on

entire industry and

possibly the parent company would contribute to the R&D project.

If additional funds are unavailable, the budget committee needs to make some

compromises

and come to a consensus-it should not be an all-or-nothing proposition.

Funds should be allocated for

both R&D and for upgrading essential equipment.

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West should also ask the accountant, Preston, to make a three-tiered analysis of the project:

(1)

best-case scenario, (2) worst-case scenario, and (3) probable scenario.

West also needs to resolve his mixed feelings about the possibility of Spinks leaving. West needs

to approach Spinks, praising him for what he has accomplished in the R&D

department and asking

him to help spread that high degree of morale across the company. West needs to make Spinks an ally

rather than a potential deserter.

V. Recommendations:

First try to obtain additional funds from parent company.

If additions are not available, obtain a consensus from the budget committee. Compromises will

have to be made on length of time for R&D projects, what equipment is needed, etc.

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