Organization Development
Organization
Transformation
Organisation Transformation
► Occur in response to or in anticipation of major
changes in the organization’s environment or
technology.
► Characteristics of Transformational Change
► Triggered by Environmental and Internal Disruptions
► Aimed at Competitive Advantage
► Systemic and Revolutionary Change
► New Organizing Paradigm
► Driven by Senior Executives and Line Management
► Involves Significant Learning
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Triggered by Environmental and
Internal Disruptions
► Industry discontinuities—sharp
changes in legal, political, economic,
and technological conditions that shift
the basis for competition within an
industry
► Product life cycle shifts—changes in
product life cycle that require
different business strategies
► Internal company dynamics—changes
in size, corporate portfolio strategy, or
executive turnover
Organization Development
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Aimed at Competitive
Advantage
► Transformational change is concerned
with choices organizations make to
improve their competitive performance.
► To establish a competitive advantage,
organizations must achieve a favoured
position vis-à-vis their competitors or
perform internally in ways that are
unique, valuable, and difficult to imitate
Organization Development
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Systemic and Revolutionary Change
► Transformational change involves reshaping the organization’s
design elements and culture.
► These changes can be characterized as systemic and revolutionary
because the entire nature of the organization is altered
fundamentally.
► Systemic change…an intentional process designed to alter the
status quo by shifting the function or structure of an identified
system with purposeful interventions…Systems change aims to
bring about lasting change by altering underlying structures and
supporting mechanisms which make the system operate in a
particular way. These can include policies, routines,
relationships, resources, power structures and values.
► Revolutionary change reshapes and realigns strategic goals and
often leads to radical breakthroughs in beliefs or behaviors.
► Typically driven by senior executives, change may occur rapidly
so that it does not get mired in politics, individual resistance, and
other forms of organizational inertia
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New Organizing Paradigm/
Philosophy
► Organizations undertaking transformational
change are, by definition, involved in
second-order or gamma types of change.
► Gamma change involves discontinuous shifts in
mental or organizational frameworks.
► Creative metaphors, such as “organization
learning” or “continuous improvement,” are often
used to help members visualize the new paradigm.
► Increases in technological change, concern for
quality, and worker participation have led many
organizations to shift their organizing paradigm (
Set of concepts).
Organization Development
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Driven by Senior Executives and
Line Management
► A key feature of transformational change
is the active role of senior executives and
line managers in all phases of the change.
► They are responsible for the strategic
direction and operation of the
organization and actively lead the
transformation.
► They decide when to initiate
transformational change,
Organization Development
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Driven by Senior Executives and
Line Management
► Envisioning. Executives must articulate a clear and
credible vision of the new strategic orientation. They also
must set new and difficult standards for performance, and
generate pride in past accomplishments and enthusiasm for
the new strategy.
► Energizing. Executives must demonstrate personal
excitement for the changes and model the behaviours that
are expected of others. Behavioural integrity, credibility,
and “walking the talk” are important ingredients.22 They
must communicate examples of early success to mobilize
energy for change.
► Enabling. Executives must provide the resources necessary
for undertaking significant change and use rewards to
reinforce new behaviours. Leaders also must build an
effective top-management team to manage the new
organization and develop management practices to support
the change process.
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Involves Significant Learning
► Transformational change requires much learning and
innovation.
► Organizational members must learn how to enact the new
behaviour required to implement new strategic directions.
► This typically involves trying new behaviours, assessing
their consequences, and modifying them if necessary.
► Members usually must learn qualitatively different ways of
perceiving, thinking, and behaving, the learning process is
likely to be substantial and to involve much unlearning.
► It is directed by a vision of the future organization and by
the values and norms needed to support it.
► Learning occurs at all levels of the organization, from
senior executives to lower-level employees.
Organization Development
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Organisational Transformation- Integrated
Strategic Change (ISC)
► Extends traditional OD processes into
the content oriented discipline of
strategic management.
► It is a deliberate, coordinated process
that leads gradually or radically to
systemic realignments between the
environment and a firm’s strategic
orientation, and that results in
improvement in performance and
effectiveness
Organization Development 20-1
0
Organisational Transformation Mckinsey 7s Model
7S Framework provides a structured approach to
understand and facilitate organizational
transformation
Cummings & Worley, 8e (c)2005 Thomson/South-Western 20-11
The 7S Framework identifies seven interconnected elements that need to
be aligned for effective organizational transformation
1.Strategy: This element refers to the organization's plan for achieving its goals in the long term.
It includes decisions about where to compete, how to differentiate, and how to allocate
resources.
2.Structure: Structure encompasses the formal hierarchy, roles, responsibilities, and reporting
lines within the organization. It defines how tasks are divided, coordinated, and controlled.
3.Systems: Systems represent the processes and procedures that govern how work is done
within the organization. This includes both formal systems like performance management and
informal systems like communication channels.
4.Shared Values: Shared values, also known as organizational culture, reflect the beliefs, norms,
and values that guide behavior within the organization. They define what is important and what
is rewarded.
5.Skills:
Skills refer to the capabilities and competencies of the organization's workforce. This
includes both technical skills related to specific tasks and interpersonal skills related to
collaboration and leadership.
6.Style:
Style relates to the leadership style and management practices within the organization. It
encompasses the behavior of leaders and the way decisions are made and communicated.
7.Staff:Staff refers to the organization's employees and their alignment with the other elements of
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the framework. This includes considerations of recruitment, training, and development to ensure
that the workforce is capable of supporting the organization's goals.
Organisational
Transformation
► According to the 7S Framework, successful
organizational transformation requires aligning all seven
elements. Change efforts that focus on only one or two
elements are less likely to succeed than those that
address the entire system holistically. Additionally, the
framework suggests that changes in one element may
necessitate adjustments in others to maintain alignment
and coherence within the organization.
Cummings & Worley, 8e (c)2005 Thomson/South-Western 20-13
