Company culture and work processes

OD is a set of ideas that views organisational change as a systematic managerial process. The theories of planned change are central to OD as well as a humanistic approach. The values that are inherent in OD tilt its efforts to the Beer and Nohria’s (2000) soft archetypes of change, and propose a solution to the organisational dilemma where respect for individual needs and quality of working life is held in high regard.

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OD developed from a tradition where more emphasis was put on ‘people problems’ and behavioural aspects within organisations than on productivity, but more recent developments have aimed at incorporating both aspects into the paradigm. 17 OD tries to incorporate the “joint values of humanizing organizations and improving their effectiveness. “18 Organisation Development is defined by Cummings and Worley (1993) as: “A system wide effort applying behavioral science knowledge to the planned creation and reinforcement of organizational strategies, structures, and processes for improving an organization’s effectiveness.

“19 Another definition is that “OD is an effort (1) planned, (2) organization wide, and (3) managed from the top, to (4) increase organization development and health through (5) planned interventions in the organization’s process’, using behavioural science knowledge. “20 The humanistic orientation of OD means that it does not only provide a theory of how to move organisations from on equilibrium point to another, but it also gives the direction and a criteria to evaluate what scenario is preferred to the status quo.

Although change is seen as a planned process led by a managerial decision making process, the decisions should have the objectives to “improve the effectiveness of the human side of the organisation by focusing on groups and teams. ” It is assumed that “increased worker autonomy and participation in work related decisions leads to a more satisfied and therefore more productive workforce”The viewpoint of OD is based on the concept that there is inherent resistance to change in the organisational system.

The OD change model aims at affecting the forces of change in a manner consistent with its philosophy. Furthermore, the resistance to change can be viewed as an unhealthy force that must be overcome to achieve the intended results. Marshall T. Egan (2002) identified the 10 main objectives for OD. 25 Among them are: A healthy organisation is one that welcomes change, supports learning and development of individual abilities.

Furthermore a successful OD programme should create an organisational culture that solves its own problems and adapts readily to changes in managerial wishes and the environment. In this sense the objective of implementing change is to create a learning, dynamic organisation with a higher quality of working life for individuals. In order to find the right remedies for the intended organisational change, a change agent must diagnose the organisation and gain an understanding of the internal dynamics within the system. The diagnosis can be on a structural level, group level or individual level.

On the basis of the diagnosis the change agent should have information to realise if the amendments to the organisational structure, group behaviour or individual task design could help the organisation to become more effective and the individuals within the organisation to lead a more fulfilled working life. To maintain a collaborative approach and atmosphere it is important that the change agent builds the knowledge on methods that are participative and respected by the individuals of the organisation and then shares the findings in an atmosphere of trust and openness.

Such collaboration by the change agent helps to build a shared understanding and common vision for the prospective change proposal. The collaborative diagnosing phase should define what tasks must be solved in the change process. A condition for a change to go ahead is that the situation can be unfrozen from the status quo. Below is a table showing the typical forces affecting change in an organisation. The table shows that opposition to change can be caused by the perceptions individuals have about their position within an organisation.

Individuals know what they can not be certain about their future positions after a change proposal has been implemented. The change agent’s objective in the preparation and planning of the change is to build a shared vision and generate support for the plan from organisation members. OD interventions must be based on choices that are informed and taken without coercion. The change programme must also create an internal commitment to these choices. 27

A successful preparation of change must therefore be based on a thorough understanding of how individuals and groups are affected by the proposed change programme, and how they perceive their relative position after the change. The organisation studied (from now on called Q) holds a state monopoly to supply a consumer good in a small European country. 28 Q is one of the largest companies in the country measured by profits, but it is none the less a small organisation with fewer than 40 employees. Q was established in the 1930’s and the state monopoly guaranteed stability.

External circumstances have however changed in the last 20 years as new technologies have introduced substitute products and regulatory changes have weakened the monopoly market protection. The resulting decline in financial performance triggered managerial incentives and change programmes as a reaction to the external factors and new technologies. Q had experienced decades of stability and predictable growth. The organisation offered one product and the organisational structure was based on a vertical division between workers performing simple tasks and the management.

Q had little formal horizontal differentiation of tasks in that period because of its small size, resulting in informal coordination procedures. As a reaction to direct competition Q introduced new products. The second product in 1987 and the third in 1993. The original product was still supplied but its relative importance in Q’s revenues declined. The new products were a reaction to competitors utilizing new technologies and forced Q to introduce new operating procedures. When the two new products were added to the operations of Q, the organisational structure took the form of a product based diversification.

However no direct changes were made to the existing operations, shown as department 1 in the picture below. The two new departments were therefore profit centres with product managers and independent day to day operations. Department 1 had a wider function since it performed support functions for the whole company as well as providing the original product. All tasks that are not directly connected two the operation of the new departments was the responsibility of department .

The managerial style that had developed in the original Q (now department 1) was that a number of unskilled employees performed simple tasks under supervision, and a few individuals had more complicated tasks and autonomy within the unit. The possibilities of promotions were limited because of the size of the company. Q was considered a good employer and individuals did not expect to get the same level of pay and autonomy elsewhere. Therefore good positions rarely became vacant. The individuals who had important tasks regarded their tasks as a distinction and other peoples interest in your task was a competing claim.

A symptom of that mentality is that no middle manager could take days of. The reason given was that they were to busy and responsible. Another phrase was: “it takes less time to do things your self than to teach others. ” This was often said with pride as it meant that you knew something that others did not. Individuals that had been in the lower layers for a long time eventually avoided any changes from routine jobs since they knew that stepping in for someone with more advanced assignments, even in an emergency, would cause tension.

The individuals in the lower layers of Q could not expect to develop their abilities as the situation was kept stable by the elite. New recruits to the company usually came to understand that they were not meant to do more than solve simple tasks under supervision, and turnover of young recruits was high. Those who held good positions were also the individuals that hired new staff. The tendency was to hire people that would not destabilise the situation, by being overly talented or ambitious. This culture became prevalent in the whole company even after the two new units were added.

One of the two new product managers was recruited internally and the other adjusted to the internal dynamics of the organisational culture. The lower level employees then found themselves in an organisation that would not teach new skills. In such circumstances the pattern becomes that those who can, quit. Those who can’t, try to make the most of their time until retirement. OD is therefore “an approach which cares about people and which believes that people at all levels throughout an organisation are, individually and collectively, both the drivers and engines of change.