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Organization design and organization development are perfectly complimentary concepts. Provide definitions and examples to support your perspective.
Organization development, as defined by Cummings and Worley (2014), is both a field of social action as well as an area of scientific inquiry, which covers many activities such as team building, structural change, and job enrichment. Organizational design must take into consideration the organization’s Human Resources practices, management, information systems, the structure, and the work design. Based on the organization’s design, development can be achieved. Furthermore, an organization’s development, an organization’s design is recognized and built upon. Organizational design can also be seen as an intervention that would occur in response to a change in strategy, which would require new functionalities and behaviors within the organization (Cummings & Worley, 2014).
A prime example of the perfectly complimentary relationship between organizational development and design that I am familiar with occurred within a company for which I worked previously. For the first time in over a decade within the industry, the company was experiencing a decrease in market shares. The main strategic challenge which occurred with this was an inability to deliver sales growth at the same rate as the competition. The strategy was adjusted to focus on a growth opportunity which included expanding sales growth into an aftermarket sales expansion that would enable the organization to leverage existing products into markets where sales opportunities were not previously the main focus. As the planning evolved, the organizational design was modified to accommodate organizational development. The design considered the strategy of the company, as well as the other key components such as technology, human resource systems, existing structure, culture and management processes.
As a result of addressing the challenges at hand, several interventions were implemented. These interventions included a sales restructure, the realignment of sales territories and boundaries, and the redesign of the rewards and recognition mechanisms and programs. The organization was thus able to shift their capabilities to deliver more rapid business results to their customers and compete more effectively in their external environment because of the organizational development and design.
Also part of this journey, and very critical to the organizational development, was building change management capabilities. Even as a leading brand within the industry, the company’s ability to sustain and embrace significant change was critical to the success and long term sustainability. Significant change management tools were implemented within the organization as part of this effort to assist the leaders and managers within the organization. New strategies were developed and implemented as well in order to quickly respond to new sales targets. New sales teams were formed to call on new customers, new incentive plans were designed and implemented, and key leadership positions were appointed to guide and mentor employees through the new processes. This also included establishing key metrics and a cadence on ongoing communications to employees regarding the status of the success and milestones of the new sales venture.
The relationship between organization design and development is one that is complimentary in that when utilized effectively, both positively contribute to an overall effective organization. Organization design is essentially the framework behind how all work is accomplished. It is also used to match the work and form of organization to the goals and long term needs of the organization. Organization development is a process which is planned and an effort which is planned and managed from top management down to implement strategies necessary to reach goals. To reach a design that is optimal to efficiency, effective development must be utilized. The various stages of organization development and design are also very similar in that one must prepare the organization, rethink the way work is accomplished and followed through, define the most critical goals and objectives, create new processes, and restructure if needed to reach these goals and objectives (Worley & Cummings, 2009). Organization design requires development and organization development requires design.
Culture plays a large part in organizational development and design. Culture is developed within an organization over time, and sometimes in development and design, this culture must be addressed and adjusted through various means. An organization may have multiple cultures among the various divisions within the organization and while some may be beneficial in the form of a high feedback culture or one that is participative, others may be negative and stagnant or one that is bringing down the organization overall. In the process of organizational design or development, all cultures within the organization must be considered. One way to address and adjust the culture of an organization is to redesign and implement the rewards system (Cummings & Worley, 2009). An organization must be proactive in not only identifying the cultures that exist, but utilizing them within the design and development.
The culture is essentially the manner in which tasks are accomplished within the organizational setting (Cameron & Quinn, 2006). One is able to see the culture of an organization by observing the behaviors, values, and beliefs within an organization at all levels. Culture has the ability to impact an organization at all levels. This includes any and all developmental strategies as well as any and all design implementations that an organization is wishing to implore. An organization that has existed under the same design for many years may have a constant culture that is uniform throughout all departments and divisions for decades. This culture both externally and internally may stagnate change and growth among services, products, and offerings of the company.
There are many change management strategies that must be implemented to address the culture of an organization in any organizational development or design. In the development of an organization, the culture of the organization must also be developed to fit the optimal design. One key example of this is noted in (Cummings & Worley, 2009). PepsiCo has been a successful organization for many years. Throughout its success, the organization has had to shift focus many times as well as address cultural issues within the organization. One way in which the organization addressed a division-focused culture was to utilize the Human Resources function in leading the initiative of shifting the overall culture to one that is unified and open to change. In doing this, the organization designed an initiative to enhance employee morale and develop a solution that would result in a more innovative career centered and employee beneficial HR department.
Any changes that must be implemented to benefit the organization overall and beneficially contribute to a positive work environment as well as a beneficial culture are often addressed throughout organizational design as well as organizational development. One critical starting point through which this is accomplished is a needs assessment. A company must develop a culture that favors growth, stability, and overall success of the organization. If the culture of an organization dampers the ability to successfully complete milestones and goals, the organization must address the issues that may be contributing to this negative culture prior to implementing strategies toward change. If the culture is not open to the design or development of the organization, it is far less likely that any strategies and implementations will be as successful (Cummings & Worley, 2009).
Change management may be described and defined in various ways (Burke & Numair, 2015). However, it is often described as an approach which is systematic in applying tools, resources, and knowledge to leverage the benefits associated with the change taking place (Metre, 2009). Identifying and overcoming any sources of resistance within the organization are specific activities that have traditionally been involved in change management (Armenakis, Harris, & Mossholder, 1993; Ricardo, 1995), which in turn creates and builds support for the desired outcomes and visions as well as manages the various transitions of the organization in advancing toward those outcomes (Weisbord, 1987; Beckhard & Harris, 1987; Collins & Porras, 1994; Conger, Spreitzer, & Lawler, 1999). This in turn accelerates complex change by focusing on learning practices and behaviors of the leaders (Tenkasi, Mohrman, & Mohrman, 1998). The diversity of change management can be summarized into five categories (Cummings & Worley, 2014), each of which representing a critical element in change leadership (Conger et al., 1999).
The first activity is motivating change within the organization, which includes the creation of readiness for change among members within the organization and helping them address any issues which would increase the resistance to change or impede upon any implementations taking place. The second category is creating a vision for the change among the various levels of organizational members starting with the leaders and moving downward, including the description and illustration of the core ideology and construction of the desired future and result. The third category is developing political support, which includes assessing the change agent’s power and identification of as well as the influencing key stakeholders. Fourth is managing the transition toward the vision, which includes activity planning, commitment planning, and the instituting or revising of management structures. The fifth and final category of activity, per (Worley & Cummings, 2014), is sustaining momentum for change, which includes providing necessary resources for the change, building an optimal support system for the change agents, developing new skills and competencies necessary, and reinforcing new behaviors throughout the organization. Regardless of the specific activities and/or approaches an organization chooses to undertake, the goal of change management is to assist an organization in moving toward a better means of operation that is more efficient in improving the sustainability of the organization (Burke & Noumair, 2015).
Selecting the best change model or plan as well as the appropriate implementation tools is critical to the success of organizational change efforts (Cummings & Worley, 2014). Three common change models within organizations today are as follows: Six Sigma, Lean, and the GE CAP model. The emphasis of CAP, compared to the emphases of Six Sigma and lean, is communication throughout the organization. Lean processes focus more on eradicating and reducing waste as well as cultivating productivity within the organization. Six Sigma is different from other change models in that it focuses more on enhancing uniformity in product quality and service, thus improving quality within the organization (GE Capital, 2015; Arnheiter, & Maleyeff, 2006). Lean and Six Sigma are superlatively described as systems of total quality management. They can be further defined as a very structured and all-inclusive way to enhance or improve the quality of the services and products within an organization (Arnheiter & Maleyeff, 2006). Total quality management is often used along with other processes, including ISO 9000. TQM can be made applicable to nearly any organization within any type of industry.
Six Sigma. Six Sigma was developed by Bill Smith, an engineer at Motorola, in the early 1990s for process improvement as a set of techniques and tools. Jack Welch later adopted Six Sigma at General Electric in 1995 (Tennant, 2001). The goal of Six Sigma is product improvement and service quality through the identification and elimination of the causes of defects and reduction of variability in manufacturing and business processes (Kwak & Anbari, 2006). The achievement of this is accomplished through a set of quality management methods, which in turn creates a new infrastructure. Every Six Sigma project carried out within an organization must follow a defined sequence of steps which have value targets.
The Six Sigma Federation gives a guide to actualizing Six Sigma called DMAIC, which indicates the phases in the process. These stages are to define, measure, analyze, improve, and control (Jones, 1998). The define process is comprised of developing the charter, determining and mapping the process, and understanding the needs and wants of the customer. Measure consists of collecting data on possible defects and causes, creating illustrative tools such as graphs and analysis, effectively calculating the defects, and creating process maps which are very detailed. Analysis consists of developing the detailed problem statement, determining potential causes, collecting all necessary data, and utilizing statistical methods to efficiently evaluate and quantify the roots and end results of the issues. Improvement consists of creating possible solutions, developing solutions, implementing plans, measuring results, and evaluating the end benefits. Finally, control consists of the development and documentation of standard practices, training the organizational members, and monitoring the performance. “The Six Sigma approach demands that an organization follow analytical steps, much like in project management to monitor and modify processes to create a better product, or enable better services to the customer” (Kwak & Anbari, 2006).
General Electric Change Acceleration Process. The GE CAP model is a change management process which was originally developed and utilized by GE Corporation (GE Capital, 2015). CAP is defined as a “flexible, nonlinear model used throughout a change process” (GE Capital, 2015).CAP was designed as a tool for facilitating “commitment and behavioral change through team dialogue and action” (GE Capital, 2015). The central idea is to achieve lasting and ongoing change management within the organization. Critical components of the model include the following: leading the change, creating a shared need among all stakeholders, creating the vision for the change, creating and ensuring commitment, making change last, monitoring the progress, and changing necessary systems and structures (see Figure 1). Along with all of this, leaders are also expected to monitor all progress of change so that the sustainability of change is an attainable goal for organizational leaders.
The GE CAP model stresses that communication is vital to the change management process (GE Capital, 2015). Per the model, communication is essential for leaders to disseminate information in various forms for preparation of the organization toward transformation. Communication is critical because it can teach employees, clients, and others about the organization in the present, as well as the future state of the organization (Burke & Noumair, 2015).
The communication process may begin with information that defines the organization’s principles, mission, and values. Communication from leaders can help define what the organization’s current vision and values are. This communication must be presented to employees and the organization in a positive manner. Communication can also be used to communicate the necessity for change to show organization members the urgency and extent of the problems with the status quo and generate the necessary momentum for change. Leaders of the organization will set a stage for expectations that are both performance related and behavioral with either approach, (Burke & Noumair, 2015).
With change, employees will want to know and understand what change is and why it is needed. As with Six Sigma, CAP communications will need to initially focus on resistance to change (Burke & Noumair, 2015). Good communication is necessary in both change management methodologies. Change management leaders must be able and willing to share information as well as allow employees and other stake holders to provide feedback about the message. Leaders must be empowered to understand how the message is perceived, received, and whether the message is understood and accepted or dismissed by the recipients.
CAP is a means of benchmarking and assigning metrics to the change management process, as is Six Sigma in that both methods utilize metrics and quantification methods. Some examples of metrics an organization can utilize to determine the success of a change management effort include communication, including staff and operational meetings, and employee rollouts (Burke & Noumair, 2015). Organizations can determine how effectively a change has been sustained through the utilization of action workouts, systems reductions, and client surveys (GE Capital, 2015). This is true for both methodologies as well.
Essentially both methodologies discussed have the same result as the goal, which is to make an organization more efficient and effective through strategic planning and implementations. Kotter (1995) indicates that credible evidence of change management proposes that change will more rapidly occur in the environment in the future. The rate of environmental change is expected to increase the pressure on organizations to transform and grow during the next several decades, and thus, the rational response is to understand what creates successful change (Kotter, 1995). This idea is supported by empirical data that aligns with the need for change management that is sustainable over time. (Peters, 2006). Gonzales (2007) and Peters (2006) highlight research focusing on the change management process, which includes planning change and implementation change through communication of the vision of change. Along with this comes a final step: evaluation of change and ongoing commitment to change that helps with sustaining change over the long-term (Andersson, Eriksson & Torstensson, 2006; Burke & Noumair, 2015).
Successful change is partly the result of appropriate leadership, which can apply transformational principles and communication, which focuses on the true definition of change for individuals and the organization (Burke & Noumair, 2015; Peters, 2006). Further, sustainable change may be possible through utilization of appropriate change management tools. Over time, tools have been developed in change management, just as tools have been utilized in project management to ensure the success of change. To keep pace with ongoing evolutions in change practices, it would be helpful for these tools to accommodate the integration of greater innovation and technology. Technological innovations have allowed greater communication between and among organizations of all shapes and sizes. Some previously proven tools for managing change may incorporate tools and processes for managing and overseeing quality management. Examples may include Six Sigma processes and Lean processes for change management (GE Capital, 2015; Kwak & Anbari, 2006; Parry & Turner, 2007). Improvements to quality and support of continuous quality improvement are vital to enhancing an organization’s ability to sustain change in the short and long-term.
Organizations, because of the rapid ever changing nature of business and technology, are expected to work more efficiently in tying together project management and change management. “As the field of change management matures, a greater need for credibility and credentialing of change managers is expected” (Prosci, 2009). This may lead to a shortage of qualified or competent managers within the change management field. As globalization continues, organizations are realizing that change is a continual process, not one that will ebb and flow. Thus, companies are looking for leadership that can manage sustained change in a manner that will help the organization remain competitive, and remain productive. One of the greatest barriers to change has been and remains to be organizational inertia and systemic resistance to change. Finding and training leaders that can communicate change, reduce resistance to change, and teach individuals to actively engage in change in a way that is beneficial for all parties involved will be vital to the future success of organizations.