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Organization
Development & Change

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Thomas G. Cummings
University of Southern California

Christopher G. Worley
University of Southern California

Pepperdine University

Australia ? Brazil ? Mexico ? Singapore ? United Kingdom ? United States

Organization Development & Change,
Tenth Edition
Thomas G. Cummings and Christopher
G. Worley

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Library of Congress Control Number: 2013935704

ISBN-13: 978-1-133-19045-5

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Printed in the United States of America
1 2 3 4 5 6 7 17 16 15 14 13

Dedication

To Chailin and Debbie, still the loves of our lives
And to our wonderful children, Catherine Cummings

and Sarah, Hannah, and Samuel Worley

In Memory of the Fallen

Larry Greiner
Richard Hackman

Tony Raia
Edie Seashore

Charlie Seashore

In Loving Memory

Jessica Joan Worley

? Pixmann/Imagezoo/Getty Images

Brief Contents

Preface xvi

About the Authors xxii

CHAPTER 1
General Introduction to Organization
Development 1

PART 1 Overview of Organization
Development 20

CHAPTER 2
The Nature of Planned Change 21

CHAPTER 3
The Organization Development Practitioner 45

PART 2 The Process of Organization
Development 74

CHAPTER 4
Entering and Contracting 75

CHAPTER 5
Diagnosing 89

CHAPTER 6
Collecting, Analyzing, and Feeding Back
Diagnostic Information 123

CHAPTER 7
Designing Interventions 157

CHAPTER 8
Managing Change 179

CHAPTER 9
Evaluating and Institutionalizing
Organization Development Interventions 207

PART 3 Human Process
Interventions 264

CHAPTER 10
Interpersonal and Group Process Approaches 265

CHAPTER 11
Organization Process Approaches 297

PART 4 Technostructural
Interventions 338

CHAPTER 12
Restructuring Organizations 339

CHAPTER 13
Employee Involvement 375

CHAPTER 14
Work Design 403

PART 5 Human Resource
Interventions 438

CHAPTER 15
Performance Management 439

CHAPTER 16
Talent Management 473

CHAPTER 17
Workforce Diversity and Wellness 497

PART 6 Strategic Change
Interventions 528

CHAPTER 18
Transformational Change 529

CHAPTER 19
Continuous Change 569

CHAPTER 20
Transorganizational Change 605

PART 7 Special Applications of
Organization Development 658

CHAPTER 21
Organization Development for Economic,
Ecological, and Social Outcomes 659

CHAPTER 22
Organization Development in Nonindustrial
Settings: Health Care, School Systems,
the Public Sector, and Family?Owned 685

CHAPTER 23
Future Directions in Organization
Development 731

Glossary 784

Name Index 793

Subject Index 797

iv

? Pixmann/Imagezoo/Getty Images

Contents

Preface xvi
About the Authors xxii

C H A P T E R 1 General Introduction to Organization Development 1

1-1 Organization Development Defined 1

1-2 The Growth and Relevance of Organization Development 4

1-3 A Short History of Organization Development 7
1-3a Laboratory Training Background 8
1-3b Action Research and Survey-Feedback Background 8
1-3c Normative Background 9
1-3d Productivity and Quality-of-Work-Life Background 11
1-3e Strategic Change Background 13

1-4 Evolution in Organization Development 13

1-5 Overview of the Book 15

Summary 17

Notes 17

PART 1 Overview of Organization Development 20

C H A P T E R 2 The Nature of Planned Change 21

2-1 Theories of Planned Change 22
2-1a Lewin?s Change Model 22
2-1b Action Research Model 24
2-1c The Positive Model 26
2-1d Comparisons of Change Models 27

2-2 General Model of Planned Change 28
2-2a Entering and Contracting 28
2-2b Diagnosing 29
2-2c Planning and Implementing Change 29
2-2d Evaluating and Institutionalizing Change 30

2-3 Different Types of Planned Change 30
2-3a Magnitude of Change 30

Application 2.1 Planned Change at the San Diego County Regional Airport
Authority 31

2-3b Degree of Organization 34
2-3c Domestic versus International Settings 35

Application 2.2 Planned Change in an Underorganized System 36

2-4 Critique of Planned Change 40
2-4a Conceptualization of Planned Change 40
2-4b Practice of Planned Change 41

v

Summary 42

Notes 42

C H A P T E R 3 The Organization Development Practitioner 45

3-1 Who Is the Organization Development Practitioner? 46

3-2 Competencies of an Effective Organization Development Practitioner 47
3-2a Intrapersonal Skills or ?Self-Management? Competence 48
3-2b Interpersonal Skills 51
3-2c General Consultation Skills 51
3-2d Organization Development Theory 52

3-3 The Professional Organization Development Practitioner 52
3-3a Role of Organization Development Professional Positions 52

Application 3.1 Personal Views of the Internal and External Consulting
Positions 55

3-3b Careers of Organization Development Professionals 59

3-4 Professional Values 60

3-5 Professional Ethics 61
3-5a Ethical Guidelines 61
3-5b Ethical Dilemmas 62

Application 3.2 Kindred Todd and the Ethics of OD 65

Summary 66

Notes 67

Appendix 70

PART 2 The Process of Organization Development 74

C H A P T E R 4 Entering and Contracting 75

4-1 Entering into an OD Relationship 76
4-1a Clarifying the Organizational Issue 76
4-1b Determining the Relevant Client 77
4-1c Selecting an OD Practitioner 78

4-2 Developing a Contract 79

Application 4.1 Entering Alegent Health 80
4-2a Mutual Expectations 81
4-2b Time and Resources 81
4-2c Ground Rules 82

4-3 Interpersonal Process Issues in Entering and Contracting 82

Application 4.2 Contracting with Alegent Health 83

Summary 87

Notes 87

C H A P T E R 5 Diagnosing 89

5-1 What Is Diagnosis? 90

5-2 The Need for Diagnostic Models 91

5-3 Open-Systems Model 92
5-3a Organizations as Open Systems 92
5-3b Diagnosing Organizational Systems 94

vi CONTENTS

5-4 Organization-Level Diagnosis 96
5-4a Inputs 96
5-4b Design Components 98
5-4c Outputs 100
5-4d Alignment 100
5-4e Analysis 101

Application 5.1 Steinway & Sons 102

5-5 Group-Level Diagnosis 106
5-5a Inputs 106
5-5b Design Components 107
5-5c Outputs 108
5-5d Alignment 108
5-5e Analysis 109

Application 5.2 Top-Management Team at Ortiv Glass Corporation 110

5-6 Individual-Level Diagnosis 112
5-6a Inputs 112
5-6b Design Components 113
5-6c Outputs 113
5-6d Alignment 114
5-6e Analysis 114

Application 5.3 Job Design at Pepperdine University 115

Summary 119

Notes 119

C H A P T E R 6 Collecting, Analyzing, and Feeding Back Diagnostic Information 123

6-1 The Diagnostic Relationship 123

6-2 Collecting Data 126
6-2a Questionnaires 127
6-2b Interviews 129
6-2c Observations 130
6-2d Unobtrusive Measures 131

6-3 Sampling 132

6-4 Analyzing Data 133
6-4a Qualitative Tools 133
6-4b Quantitative Tools 135

Application 6.1 Collecting and Analyzing Diagnostic Data at Alegent Health 136

6-5 Feeding Back Data 142
6-5a Content of Feedback 142
6-5b Process of Feedback 144

6-6 Survey Feedback 145
6-6a What Are the Steps? 145

Application 6.2 Training OD Practitioners in Data Feedback 146
6-6b Survey Feedback and Organizational Dependencies 148

Application 6.3 Survey Feedback and Planned Change at Cambia Health
Solutions 149

6-6c Limitations of Survey Feedback 152
6-6d Results of Survey Feedback 152

Summary 154

Notes 154

CONTENTS vii

C H A P T E R 7 Designing Interventions 157

7-1 Overview of Interventions 157
7-1a Human Process Interventions 157
7-1b Technostructural Interventions 159
7-1c Human Resources Management Interventions 160
7-1d Strategic Change Interventions 161

7-2 What Are Effective Interventions? 162

7-3 How to Design Effective Interventions 163
7-3a Contingencies Related to the Change Situation 164
7-3b Contingencies Related to the Target of Change 171

Summary 173

Notes 175

C H A P T E R 8 Managing Change 179

8-1 Overview of Change Activities 179

8-2 Motivating Change 181
8-2a Creating Readiness for Change 181
8-2b Overcoming Resistance to Change 183

8-3 Creating a Vision 184

Application 8.1 Motivating Change in the Sexual Violence Prevention Unit of
Minnesota?s Health Department 185

8-3a Describing the Core Ideology 186
8-3b Constructing the Envisioned Future 187

8-4 Developing Political Support 188

Application 8.2 Creating a Vision at Premier 189
8-4a Assessing Change Agent Power 192
8-4b Identifying Key Stakeholders 192
8-4c Influencing Stakeholders 192

8-5 Managing the Transition 193

Application 8.3 Developing Political Support for the Strategic Planning Project in
the Sexual Violence Prevention Unit 194

8-5a Activity Planning 196
8-5b Commitment Planning 196
8-5c Change-Management Structures 196
8-5d Learning Processes 196

8-6 Sustaining Momentum 197

Application 8.4 Transition Management in the HP?Compaq Acquisition 198
8-6a Providing Resources for Change 200
8-6b Building a Support System for Change Agents 200
8-6c Developing New Competencies and Skills 200
8-6d Reinforcing New Behaviors 201
8-6e Staying the Course 201

Application 8.5 Sustaining Change at RMIT University Library in Melbourne,
Australia 202

Summary 204

Notes 205

viii CONTENTS

C H A P T E R 9 Evaluating and Institutionalizing Organization Development
Interventions 207
9-1 Evaluating Organization Development Interventions 207

9-1a Implementation and Evaluation Feedback 208
9-1b Measurement 211
9-1c Research Design 216

Application 9.1 Evaluating Change at Alegent Health 219

9-2 Institutionalizing Organizational Changes 221
9-2a Institutionalization Framework 222
9-2b Organization Characteristics 222
9-2c Intervention Characteristics 223
9-2d Institutionalization Processes 224
9-2e Indicators of Institutionalization 226

Application 9.2 Institutionalizing Structural Change at Hewlett-Packard 227

Summary 229

Notes 229

Selected Cases 232
Sunflower Incorporated 232
Kenworth Motors 234
Peppercorn Dining 238
Diagnosis and Feedback at Adhikar 257
Managing Change: Action Planning for the V?lo V Project in Lyon, France 262

PART 3 Human Process Interventions 264

C H A P T E R 10 Interpersonal and Group Process Approaches 265

10-1 Diagnostic Issues in Interpersonal and Group Process Interventions 266

10-2 Process Consultation 267
10-2a Basic Process Interventions 268

Application 10.1 Process Consultation at Christian Caring Homes, Inc. 271
10-2b Results of Process Consultation 273

10-3 Third-Party Interventions 274
10-3a An Episodic Model of Conflict 275
10-3b Facilitating the Conflict Resolution Process 276

10-4 Team Building 277

Application 10.2 Conflict Management at Ross & Sherwin 278
10-4a Team-Building Activities 282
10-4b Interventions Relevant to Individual Behavior 285
10-4c Interventions Relevant to the Group?s Behavior 285
10-4d Interventions Affecting the Group?s Integration with the Rest of the

Organization 286

Application 10.3 Aligning Senior Teams at Vaycot Products 287
10-4e The Manager?s Role in Team Building 291
10-4f The Results of Team Building 292

Summary 293

Notes 294

CONTENTS ix

C H A P T E R 11 Organization Process Approaches 297

11-1 Diagnostic Issues in Organization Process Interventions 298

11-2 Organization Confrontation Meeting 298
11-2a Application Stages 299

Application 11.1 A Work-Out Meeting at General Electric Medical Systems
Business 300

11-2b Results of Confrontation Meetings 301

11-3 Intergroup Relations Interventions 301
11-3a Microcosm Groups 301
11-3b Resolving Intergroup Conflict 304

Application 11.2 Improving Intergroup Relationships in Johnson & Johnson?s Drug
Evaluation Department 307

11-4 Large Group Interventions 309
11-4a Application Stages 310

Application 11.3 Using the Decision Accelerator to Generate Innovative Strategies
in Alegent?s Women?s and Children?s Service Line 314

11-4b Results of Large Group Interventions 318

Summary 319

Notes 320

Selected Cases 322
Lincoln Hospital: Third-Party Intervention 322
Large Group Interventions at Airbus? ICT Organization 329

PART 4 Technostructural Interventions 338

C H A P T E R 12 Restructuring Organizations 339

12-1 Structural Design 339
12-1a The Functional Structure 340
12-1b The Divisional Structure 342
12-1c The Matrix Structure 344
12-1d The Process Structure 346
12-1e The Customer-Centric Structure 349

Application 12.1 Healthways? Process Structure 350
12-1f The Network Structure 353

12-2 Downsizing 356

Application 12.2 Amazon.com?s Network Structure 357
12-2a Application Stages 359

Application 12.3 Downsizing in Menlo Park, California 362
12-2b Results of Downsizing 363

12-3 Reengineering 364
12-3a Application Stages 365
12-3b Results from Reengineering 368

Application 12.4 Honeywell IAC?s TotalPlant? Reengineering Process 369

Summary 371

Notes 371

C H A P T E R 13 Employee Involvement 375

13-1 Employee Involvement: What Is It? 376
13-1a A Working Definition of Employee Involvement 376

x CONTENTS

13-1b The Diffusion of Employee Involvement Practices 377
13-1c How Employee Involvement Affects Productivity 377

13-2 Employee Involvement Interventions 379
13-2a Parallel Structures 379

Application 13.1 Using the AI Summit to Build Union?Management Relations
at Roadway Express 382

13-2b Total Quality Management 385

Application 13.2 TQM at the Ritz-Carlton 391
13-2c High-Involvement Organizations 392

Application 13.3 Building a High-Involvement Organization at Air Products and
Chemicals, Inc. 396

Summary 399

Notes 399

C H A P T E R 14 Work Design 403

14-1 The Engineering Approach 404

14-2 The Motivational Approach 405
14-2a The Core Dimensions of Jobs 405
14-2b Individual Differences 407
14-2c Application Stages 407

Application 14.1 Enriching Jobs at the Hartford?s Employee Relations Consulting
Services Group 410

14-2d Barriers to Job Enrichment 412
14-2e Results of Job Enrichment 413

14-3 The Sociotechnical Systems Approach 414
14-3a Conceptual Background 414
14-3b Self-Managed Work Teams 415
14-3c Application Stages 419

Application 14.2 Developing Self-Managed Teams at WI, Inc. 421
14-3d Results of Self-Managed Teams 423

14-4 Designing Work for Technical and Personal Needs 425
14-4a Technical Factors 425
14-4b Personal-Need Factors 426
14-4c Meeting Both Technical and Personal Needs 428

Summary 429

Notes 429

Selected Cases 433
City of Carlsbad, California: Restructuring the Public Works
Department (A) 433
The Sullivan Hospital System 435

PART 5 Human Resource Interventions 438

C H A P T E R 15 Performance Management 439

15-1 A Model of Performance Management 440

15-2 Goal Setting 442
15-2a Characteristics of Goal Setting 442
15-2b Application Stages 443

CONTENTS xi

15-2c Management by Objectives 444
15-2d Effects of Goal Setting and MBO 445

Application 15.1 Changing the Human Capital Management Practices at Cambia
Health Solutions 446

15-3 Performance Appraisal 448
15-3a The Performance Appraisal Process 449
15-3b Application Stages 451
15-3c Effects of Performance Appraisal 452

15-4 Reward Systems 452

Application 15.2 Adapting the Appraisal Process at Capital One Financial 453
15-4a Structural and Motivational Features of Reward Systems 455
15-4b Reward System Design Features 457
15-4c Skill- and Knowledge-Based Pay Systems 458
15-4d Performance-Based Pay Systems 460
15-4e Gain-Sharing Systems 462
15-4f Promotion Systems 464
15-4g Reward-System Process Issues 464

Application 15.3 Revising the Reward System at Lands? End 465

Summary 468

Notes 468

C H A P T E R 16 Talent Management 473

16-1 Coaching and Mentoring 474
16-1a What Are the Goals? 474
16-1b Application Stages 475
16-1c The Results of Coaching and Mentoring 476

16-2 Management and Leadership Development Interventions 476
16-2a What Are the Goals? 477
16-2b Application Stages 477

Application 16.1 Leading Your Business at Microsoft Corporation 479
16-2c The Results of Development Interventions 480

16-3 Career Planning and Development Interventions 480
16-3a What Are the Goals? 481
16-3b Application Stages 482

Application 16.2 PepsiCo?s Career Planning and Development
Framework 491

16-3c The Results of Career Planning and Development 493

Summary 493

Notes 494

C H A P T E R 17 Workforce Diversity and Wellness 497

17-1 Workforce Diversity Interventions 497
17-1a What Are the Goals? 498
17-1b Application Stages 499
17-1c The Results for Diversity Interventions 503

17-2 Employee Stress and Wellness Interventions 504
17-2a What Are the Goals? 504

Application 17.1 Aligning Strategy and Diversity at L?Or?al 505
17-2b Application Stages 507
17-2c The Results of Stress Management and Wellness Interventions 513

xii CONTENTS

Application 17.2 Johnson & Johnson?s Health and Wellness Program 514

Summary 516

Notes 516

Selected Cases 519
Employee Benefits at HealthCo 519
Designing and Implementing a Reward System at Disk Drives, Inc. 523

PART 6 Strategic Change Interventions 528

C H A P T E R 18 Transformational Change 529

18-1 Characteristics of Transformational Change 530
18-1a Change Is Triggered by Environmental and Internal Disruptions 530
18-1b Change Is Initiated by Senior Executives and Line Managers 531
18-1c Change Involves Multiple Stakeholders 532
18-1d Change Is Systemic and Revolutionary 532
18-1e Change Involves Significant Learning and a New Paradigm 533

18-2 Organization Design 534
18-2a Conceptual Framework 534
18-2b Basic Design Alternatives 535
18-2c Worldwide Organization Design Alternatives 537

Application 18.1 Organization Design at Deere & Company 538

Application 18.2 Implementing the Global Strategy: Changing the Culture of
Work in Western China 542

18-2d Application Stages 546

18-3 Integrated Strategic Change 548
18-3a Key Features 549
18-3b Implementing the ISC Process 549

18-4 Culture Change 552
18-4a Defining and Diagnosing Organization Culture 552

Application 18.3 Managing Strategic Change at Microsoft Canada 553
18-4b Implementing the Culture Change Process 558

Application 18.4 Culture Change at IBM 561

Summary 563

Notes 563

C H A P T E R 19 Continuous Change 569

19-1 Dynamic Strategy Making 570
19-1a Conceptual Framework 571
19-1b Application Stages 573

19-2 Self-Designing Organizations 576
19-2a The Demands of Turbulent Environments 576

Application 19.1 Dynamic Strategy Making at Whitbread PLC 577
19-2b Application Stages 579

19-3 Learning Organizations 582

Application 19.2 Self-Design at Healthways Corporation 583
19-3a Conceptual Framework 584
19-3b Organization Learning Interventions 586

19-4 Built-to-Change Organizations 593
19-4a Design Guidelines 593

CONTENTS xiii

Application 19.3 Dialogue and Organization Learning at DMT 594
19-4b Application Stages 597

Application 19.4 Creating a Built-to-Change Organization at Capital One
Financial 599

Summary 601

Notes 602

C H A P T E R 20 Transorganizational Change 605

20-1 Transorganizational Rationale 606

20-2 Mergers and Acquisitions 607
20-2a Application Stages 608

Application 20.1 Planning the United?Continental Merger 613

20-3 Strategic Alliance Interventions 616
20-3a Application Stages 616

Application 20.2 Building Alliance Relationships 618

20-4 Network Interventions 620
20-4a Creating the Network 621
20-4b Managing Network Change 624

Application 20.3 The Alaska Workforce Coalition 627

Summary 631

Notes 632

Selected Cases 636
Global Mobile Corporation 636
Leading Strategic Change at DaVita: The Integration of the Gambro

Acquisition 645

PART 7 Special Applications of Organization Development 658

C H A P T E R 21 Organization Development for Economic, Ecological,
and Social Outcomes 659
21-1 Sustainable Management Organizations 659

21-1a Design Guidelines 660
21-1b Application Stages 667

21-2 Global Social Change 670
21-2a Global Social Change Organizations 670

Application 21.1 Interface Carpet?s Transformation to Sustainability 671
21-2b Application Stages 674
21-2c Change-Agent Roles and Skills 677

Application 21.2 Social and Environmental Change at LDI Africa 678

Summary 681

Notes 682

C H A P T E R 22 Organization Development in Nonindustrial Settings:
Health Care, School Systems, the Public Sector, and
Family?Owned 685
22-1 Organization Development in Health Care 686

22-1a The Health Care Industry?A Snapshot 686
22-1b Trends in Health Care 687

xiv CONTENTS

22-1c Opportunities for Organization Development Practice 690
22-1d Conclusions 693

22-2 Organization Development in Public School Systems 693
22-2a A Complex, Diverse, and Evolving K-12 Educational System 693
22-2b Change Forces 694
22-2c Disappointing Reform Efforts 696
22-2d Considerations for OD Practitioners 699
22-2e Conclusions 702

22-3 Organization Development in the Public Sector 703
22-3a Comparing Public- and Private-Sector Organizations 705
22-3b Recent Research and Innovations in Public-Sector Organization

Development 710
22-3c Conclusions 711

22-4 Organization Development in Family-Owned Businesses 711
22-4a The Family Business System 712
22-4b Business, Ownership, and Family Systems 714
22-4c Family Business Developmental Stages 715
22-4d A Parallel Planning Process 716
22-4e Values 716
22-4f Critical Issues in Family Business 719

Summary 725

Notes 726

C H A P T E R 23 Future Directions in Organization Development 731

23-1 Trends Within Organization Development 732
23-1a Traditional Trend 732
23-1b Pragmatic Trend 733
23-1c Scholarly Trend 733
23-1d Implications for OD?s Future 734

23-2 Trends in the Context of Organization Development 735
23-2a The Economy 735
23-2b The Workforce 738
23-2c Technology 739
23-2d Organizations 740
23-2e Implications for OD?s Future 741

Summary 747

Notes 747

Integrative Cases 750
B. R. Richardson Timber Products Corporation 750
Building the Cuyahoga River Valley Organization 764
The Transformation of Meck Insurance 774

Glossary 784

Name Index 793

Subject Index 797

CONTENTS xv

? Pixmann/Imagezoo/Getty Images

Preface

What a difference an edition makes. We need look no farther than this text to get a sense
of the pace and consequences of change. Compared to the promise of hope and change
that accompanied Barack Obama?s first election while we were finishing the ninth edi-
tion, finishing this tenth edition in 2013 brings daily reminders that things are moving
far more quickly and unpredictably than we could ever have imagined. As a global soci-
ety, we are still living with the enormous personal, social, and economic consequences of
the financial turmoil brought on by the mortgage-lending crisis and the subsequent
recession that enveloped the world?s economies; still coping with the distressing after-
math of man-made and natural calamities such as the BP/Macondo/Deepwater Horizon
disaster in the Gulf of Mexico and the earthquake and tsunami that devastated Japan;
and still apprehensive about the spreading strife and seemingly intractable unrest in the
Middle East, the angry rhetoric from the Korean peninsula, and the ever present threat
of terrorist attacks almost anywhere, any time. We are reminded almost daily that global
climate change, nuclear weapons proliferation, and disease pandemics can actually hap-
pen in our lifetime, businesses are not too big to fail, and almost no industry or sector of
society is free of ethical breeches, illegal practices, or mismanagement. From a more opti-
mistic perspective, more and more of the world?s population is taking advantage of the
rapid advances in information tec