According to weick, the primary goal of organizations is to

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Chapter 9

Communication and Organizational Development

Two monologues do not make a dialogue. —Jeff Daly

Learning Objectives

What We Will Be Investigating:

Examine the demands to continually refine organizing processes to promote organizational effectiveness and survival. Examine the use of communication strategies for identifying current and emerging performance gaps in the organizing process. Explain how the diagnosis of performance gaps suggests directions for organizational renewal. Examine applications of Weick's model of organizing to highlight the central role of communication in responding to organizational problems and guiding

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organizational adaptation. Explain how organizational intelligence is developed and stored in organizational life, as well as how organizational intelligence is used to guide organizational activities. Identify effective strategies for developing, implementing, and evaluating interventions for promoting organizational development. Identify strategies for promoting the balance between innovation and stability in organizational life. Explain how slack resources can be used to energize organizational development activities. Describe criteria for assessing organizational effectiveness, including differentiating between output and process measures of effectiveness. Examine strategies for implementing communication policies, processes, and systems for promoting ongoing organizational assessment, evaluation, intervention, and organizational development.

The process of organizing, which is fraught with challenges and difficulties, is an ongoing struggle for many organizations. It takes a great deal of effort and effective communication to build the networks of cooperative relationships and coordinated activities needed to accomplish complex organizational goals. Yet the goals facing organizational participants do not stand still. There are always new constraints, problems, and demands that arise in organizational life that can break down an organization.

As we have discussed earlier in the book, in systems theory language, this threat of organizational erosion is known as entropy, the natural degradation of systems that leads to disorganization (Berrien, 1976). There is an innate tendency for all systems, but particularly for human systems (such as the organizations we all participate in), to deteriorate and disorganize over time. In physical systems, the entropic threats that break down buildings and machinery can be traced to environmental and chemical processes such as the negative effects of gravity and oxidation.

In social systems, entropy is often caused by human processes. Human beings are imperfect, fallible, and are less reliable than the automated machines we have built to help us handle complex tasks. People get tired, angry, and distracted. They forget what they need to do. They don't show up for work. In sum, they make mistakes, and the process of organizing suffers.

No matter what the reasons for organizational decline, we can expect social systems to break down over time, and concerted efforts need to be made to revitalize these systems. Many things can be done to resist the natural trend toward entropy, to help keep organizational members on task, to adapt organizational processes to meet new demands, to identify emerging threats to organization, and to implement plans to overcome these threats. The process of organizational renewal that helps organizations resist entropy and promote ongoing organization is known as organizational development (Schein, 1969). Organizational development is a critical process in modern organizational life, and it depends largely on strategic organizational communication.

This chapter examines the importance of using organizational communication processes to evaluate

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organizational performance and direct organizational renewal. We describe the use of strategic feedback mechanisms to identify deficits and emerging problems in organizing processes and will examine a model of organizing that illustrates the central role of communication in guiding organizational adaptation. We also examine the process of conducting ongoing organizational development activities as a strategy for adapting to emerging organizational constraints and enhancing organizational processes and policies. We analyze communication intervention strategies, including introduction of new training programs, internal public relations efforts, job redesign, reinvention, restructuring, and consolidation as unique opportunities for improving organizational performance. Finally, the chapter closes with a case study that illustrates communication processes for identifying organizational challenges, designing interventions, and implementing changes to promote organizational effectiveness.

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How do hybrid cars relate to the systems principle of equifinality?

9.1 Balancing Innovation and Stability in Organizational Life

Two contradictory and competing primary goals exist in organizational life:

1. The promotion of organizational stability, and 2. The promotion of organizational innovation

There tends to be greater focus on promoting stability within organizations than on promoting innovation. Traditional hierarchical organizational systems have been designed to establish operational order and stability, following the tenets of the bureaucratic model of organization described in Chapter 7 (Weber, 1947). Indeed, a great deal of planning and hard work goes into promoting order, predictability, and stability in organizational operations, especially because stability is difficult to achieve. Rules and regulations are carefully developed to promote coordination, precision, and order in organizational activities.

Although there are clearly demonstrated needs for stability in organizing processes to promote order, there are also compelling needs for innovation in organizational life to meet changing opportunities, constraints, and demands. Many often uncontrollable and unpredictable changes occur in organizational life that demand the development of adaptive social systems. The systems principle of equifinality suggests that social systems need to be adaptive, finding different ways to achieve system goals depending on the unique and changing constraints confronting the systems (Berrien, 1976). Organizations therefore have to balance their needs for both stability and innovation.

The old saying there are "many roads to Rome" suggests that there are various ways to accomplish goals. This is absolutely the case in organizational life, where changing constraints often demand unique organizing strategies. For example, with growing public concern over the health issues related to the use of gluten (wheat) in many foods, companies that make baked goods began to design ways to prepare cookies, crackers, and cakes from rice flour, rather than from wheat, to meet new consumer demand. They were still producing baked goods, just using new ingredients and processes to achieve their goals. Unfortunately, there is a tendency in many formal organizations to place too much focus on promoting order and stability, often at the expense of organizational responsiveness and adaptation.

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Mercy Hospital and Medical Center faced a dilemma‐‐should they change their organization structure or fail to be competitive? They ended up with a system called shared governance, which is designed to give staff a much more active hand in running their own units. A central aspect of shared governance is helping staff learn to deal with conflicts. To think about: what struggles did employees face

Conflict and Change Case Study: Mercy Hospital and Medical

Various changing constraints demand organizational adaptation and innovation. For example, personnel changes often occur in organizations as workers change or lose jobs, get injured, quit, retire, or die. These changes may necessitate corresponding changes in organizational activities to achieve desired goals. For example, when the star quarterback on a football team gets injured and the backup quarterback is sent into the game, it is likely to change the entire offensive strategy for the team. The backup quarterback may not have the same offensive skills, strengths, and knowledge as the starting quarterback. A good football coach will implement new offensive plays for the replacement quarterback that reflect that player's specific skill set.

Sometimes organizational goals shift, demanding the performance of new organizational activities to meet the updated goals. For example, leaders may alter the kinds of products that organizations create and market in response to changes in society, technology, and consumer demand. With the increase in the price of gas over the past few years, consumer demand for fuel‐efficient automobiles, such as hybrids and compact cars, has grown, whereas demand for large fuel‐thirsty SUVs has gone down. To meet these changing demands and to maintain profitability, automobile manufacturers had to shift their operations to increase production of fuel‐efficient automobiles, leading to changes in automotive design, the use of raw materials, and factory operations. The failure to innovate in the face of societal change could be disastrous for the car companies.

New regulations that arise from within and outside of organizations, such as governmental regulations, also influence organizational operations. For example, when the Food and Drug Administration (FDA) rules that a certain class of prescription medications is unsafe and blocks the sale of these drugs, the pharmaceutical companies that produce these medications must make significant changes in their operations to meet the new regulations. Not only must they stop producing and selling the medications, they must shift their operations to other products and services to maintain profitability.

As is clear from this discussion, there are many threats to the organizing process, especially as organizational participants confront new challenges and work to accomplish new organizational goals. A wide range of emergent internal and external organizational constraints impinge on organizations and demand adaptation and innovation from them. These emerging constraints may include

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in changing the organization at Mercy Hospital? How did they balance stablilty and innovation to create the new organizational structure?

changing personnel, regulations, technologies, products, services, customer demands, competition, economic conditions, and more. These

constraints necessitate the development of adaptive organizing strategies to meet the demands of new situations. Yet it is not easy to predict what changes in organizational life are needed. It is also not easy to implement change in organizations, especially since, as we have discussed, there is such a strong focus in many organizations on promoting stability. In the next section, we'll look at one model of organizing and organizational adaption.

Organizations in Action: Innovation and the U.S. Auto Industry

Innovation is critical to organizational effectiveness. But as explained in this chapter, organizations also have a need for stability, which often compromises the ability to innovate. British organizational theorist Charles Handy has argued that when organizations get large and bureaucratic, they lose their drive to innovate. As he puts it, "Bureaucracies polish but they do not invent." (1995) And Handy says that when faced with a changing environment, bureaucracies often first respond by doing more of what they already do, just with a little more energy and enthusiasm.

The experience of the U.S. auto industry could be regarded as a case of dealing with the tension between stability and innovation in a dysfunctional manner. Despite a turbulent environment—an increase in gas prices and changes in the size and transportation preferences of American families —Detroit continued to manufacture lots of gas‐guzzling sedans in the 1970s and 1980s. Not only that, but the cars being built in Japan were perceived to be of better quality. As a result, U.S. market share declined in the last decades of the 20th century, and it's only recently that American cars have once again passed a 50 percent market share. But still, as of 2010, six of the ten best‐ selling vehicles in the United States were Japanese.

How would Karl Weick, who we discussed in this chapter, analyze the situation? Within the U.S. auto industry, there was a degree of entropy—things were breaking down. There was also equivocality—Detroit was unsure how to make sense of and respond effectively to these new situational demands. In the process of enactment, selection, and retention, U.S. automakers tended to rely on "old tapes." They had a product—bigger cars—and they were bound and determined to sell them. (And, they hoped to continue selling them because there's a greater profit margin on bigger vehicles.) In Weick's framework, for an organization to succeed, it must pay attention to what's going on in the environment and be willing to enact new roles and procedures in response to any changes.

Unfortunately for American firms, this lesson regarding change was learned pretty late in the game. Even with recent improvements in market share and quality, the jury is still out as to whether America's "big three" automakers have become learning organizations in the manner that Weick would advocate. President Obama's automobile task force contends that while General Motors has done well to restructure its business in recent years, such progress had been "far too slow." According to The Economist, the task force identified several areas where it found GM to be overly optimistic or "in denial," including unrealistic estimates of domestic market share,

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continuing doubts about GM quality, and "a weakening product mix as consumer tastes and tighter fuel‐economy regulations eat into sales of high‐margin trucks and sport‐utility vehicles." (America's car industry: time for a new driver)

Will U.S. automakers be able to turn the tide? Much will depend on their ability to come to terms with equivocality and find ways to promote innovation over stability.

Critical Thinking Questions:

1. If large organizations are indeed prone to value stability, what can enable them to promote innovation?

2. In your view, has the U.S. auto industry enacted new roles and procedures that will ensure that they succeed?

3. In what situations, if any, should stability take precedence over innovation within organizations?

Sources:

Handy, C. (1995). Gods of Management: The Changing Work of Organizations. New York: Oxford University Press.

America's car industry: time for a new driver. (2009, April 2). The Economist. Retrieved from http://www.economist.com/node/13414108 (http://www.economist.com/node/13414108)

Korzeniewski, J. (2011, January 4). America's best‐selling cars and trucks of 2010 are. . . . In Autoblog. Retrieved from http://www.autoblog.com/2011/01/04/americas‐best‐selling‐cars‐and‐ trucks‐of ‐2010‐are/ (http://www.autoblog.com/2011/01/04/americas‐best‐selling‐cars‐and‐trucks‐of ‐2010‐ are/)

http://www.autoblog.com/2011/01/04/americas-best-selling-cars-and-trucks-of-2010-are/
http://www.economist.com/node/13414108
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How have the complexities of increased unemployment demanded new job‐seeking strategies?

9.2 Weick's Model of Organizing and Organizational Adaptation

Communication performs a central role in identifying rules needed to promote stability in organizational life. Communication is also essential for spurring innovation when organizations need to adapt. As we discussed in Chapter 4, American organizational theorist Karl Weick (1979) introduced an innovative model of organizing that provides a particularly insightful description of the ways that communication can be used to balance innovation and stability in organizational life. Weick's model of organizing is grounded in information theory, which describes how the communication of relevant information helps to reduce uncertainty and increase understanding. Weick describes the organizing process in terms of the communication of relevant information to promote a balance between organizational stability and innovation. Weick's model explains that social organization is developed through the use of interconnected communication processes that help organizational participants make sense of the complex situations they confront. These interconnected communication processes promote problem solving, adaptation, and growth in organizational life.

Weick's model explains that social organizing occurs in response to uncertainty. When organizational participants confront complex and uncertain situations that are difficult for them to make sense of and handle by themselves, they must interact with others to collaboratively address these issues, demonstrating social organization. Weick refers to the uncertain situations that organizational actors confront as equivocal information inputs. Equivocality (uncertainty, ambiguity, and

unpredictability) is inherent in the many complex situations, problems, and issues that organizational actors must confront. For example, when new goals, products, processes, or regulations are introduced, these new demands can lead to uncertainty and equivocality for organizational participants who are unsure of how to make sense of and respond effectively to these new situational demands.

Many complex and uncertain situations, problems, and issues confront organizational participants in modern organizational life. Technology upgrades, changes in personnel, new customers, and emerging societal constraints are just a few of the situations (often seen as problems) that can challenge organizational participants. Weick's model of organizing suggests that the more equivocal these problems are for organizational actors, the more those actors need help from others to cope with these complex problems. In fact, it is Weick's contention that organizations have developed expressly as communication systems for helping organization members respond effectively to complex situations. Strategic organizational communication helps these individuals reduce equivocality, and by doing so, it helps to increase certainty and direction in organizational life.

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According to Weick's model of organizing, challenging organizational situations are best resolved through the participation in communication and information processing activities by organizational participants to help reduce uncertainty. These communication‐based sense‐making activities not only help organization members increase their understanding of new demands, they also help these participants gather new and relevant information for guiding the creation of appropriate rule‐based organizational responses to effectively handle these situations. The model suggests that in the process of organizing, organizational actors are confronted by many complex, difficult, unpredictable, and equivocal situations. Each of these difficult situations presents unique information‐processing problems for organizational participants. To be effective, organizing efforts depend on the abilities of organizational members to engage in active cycles of communication to resolve equivocal organizational situations by establishing reliable and accurate interpretations (meanings) and establishing effective evidence‐based responses to these uncertain situations.

For example, when a newspaper reporter is assigned to cover a story about an issue she is not familiar with, she needs to interview a number of experts on this topic to reduce her uncertainty and increase her understanding of the issues so she can write an article about the issue. It is the communication interactions with experts that helped her make sense of the issue she was covering and helped her make good choices about how to write about the issue.

Rules and Communication Cycles

Weick's model identifies two primary interrelated communication processes that should be used to cope with the level of equivocality of information inputs, the use of rules and cycles. Rules are guidelines for interpreting and responding to situations that are established through interaction experiences between organizational participants. (Karl Weick sometimes calls these rules "assembly rules" to illustrate how they direct organizational participants' development of strategies for making sense of and reacting to issues.) The rules guide interpretation and response to different organizational situations. Every time organizational participants figure out how to respond effectively to a new situation, they develop guidelines (rules) from these interactions for dealing with similar situations in the future. These evidence‐based rules help guide organizational activities and increase predictability for organizational participants, ultimately promoting stability in organizational life.

Organizational participants can usually respond to simple and familiar (relatively unequivocal) organizational demands with preset rules. For example, the use of instruction manuals, rate schedules, operational guidelines, form letters, and printed instructions are common rule‐based strategies used in organizations to guide participants' responses to common situations. However, rules are not so useful for guiding appropriate responses to novel and highly equivocal organizational situations. These unique situations have not been dealt with before, and there are not likely to be any established guidelines for handling them. In these situations, organizational participants must engage in communication to develop new rules.

Communication cycles are enacted to help organizational actors develop new and innovative strategies for responding effectively to difficult organizational situations. Weick describes cycles as a series of interlocked message exchanges between organizational actors that allow them to more easily process difficult situations. As we have discussed in earlier chapters of this book, to help reduce the equivocality of complex problems, Weick suggests the cycle, a double interact, as an exchange of conditionally related messages with three components: act, response, and adjustment.

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Figure 9.1: A Communication Cycle

In essence, the communication cycle introduces an idea, elicits a response to that idea, and enables an adjustment to the response. It is an interactive means for gathering relevant information and feedback to help organizational participants make sense of challenging demands. (Figure 9.1 shows a depiction of a communication cycle.) For example, imagine that you are preparing a report on a complicated topic you don't know much about and you don't know where to start. Perhaps you need to engage in some communication cycles to help make this task less equivocal for you. You could speak with a reference librarian who might suggest some good sources of information available in the library. This is one communication cycle that can help you make sense of this task. If you follow the librarian's advice and find several sources of information to consult concerning this topic, each of these information sources that you consult could also be seen as a communication cycle that can help you understand the topic. You would continue to engage in as many communication cycles as you needed to make sense of the task until you were able to write the report.

The more equivocal a given situation is for organizational members, the more these participants must depend on performing a number of communication cycles to interpret and respond to the problem. Each communication cycle that organizational participants perform helps to process some equivocality out of the

challenging situation, making the situation more understandable and enabling organization members to develop and apply new rules for responding to these kinds of situations. However, not every cycle reduces the same amount of equivocality from an information input, but each cycle reduces some of the initial equivocality. Therefore, it behooves organizational participants to identify the most effective communication cycles to use (i.e., interacting with individuals who can provide them with the most relevant information) to help them make sense of difficult organizational problems. For example, identifying and making available to managers the most knowledgeable technical experts to consult with when making difficult decisions about the best uses of computer technologies for addressing organizational demands can provide these managers with useful communication cycles for reducing equivocality and guiding appropriate organizational decision making.

Requisite Variety

The principle of requisite variety describes the appropriate use of rules and cycles in organizational life. Requisite variety suggests that the more equivocal an organizational problem is for organizational participants, the more they need to develop correspondingly complex processes to cope with the issue. For example, if a relatively simple and common request is made of organization members, such as when a customer orders the breakfast special at a diner, the server can easily place the breakfast order, listing the order succinctly in her request to the cook, and listing the price for the order on the bill for the breakfast order. The server can use preset rules for responding to this low equivocality request that is relatively simple to perform. On the other hand, if a customer orders a special omelet for breakfast that is not on the menu and contains a long list of ingredients that are not normally ordered, the request is much more equivocal. The server may have to question the customer to make sure what the order comprises, consult the cook to make sure all the ingredients are available, and discuss with the diner owner how to price the order. This equivocal order can't be handled simply with preset rules. The server has to engage in a number of

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communication cycles concerning the order to reduce its equivocality and guide correct organizational response to the request.

Unfortunately, too often, organizational representatives violate the principle of requisite variety, either using rules to cover complex issues that demand cycles, or engaging in cycles to respond to simple requests that could have been handled with rules. When complex organizational issues are handled with rules, errors are likely to occur, and organizational effectiveness will inevitably suffer. When simple organizational issues are responded to with communication cycles, organizational resources are unnecessarily strained, organizational participants are inconvenienced, and it takes a much longer time to accomplish organizational tasks. This is not very efficient.

Communication Phases

Weick's model of organizing suggests that there are three major communication phases that facilitate organizing and adaptation: enactment, selection, and retention (see Figure 9.2). Rules and cycles are used in each of these three organizing phases to help register the complexity of organizational situations and to determine whether appropriate rules should be selected (if available) or communication cycles should be performed (if the situations are too complex to be handled by rules). In each phase of organizing, information is processed by organizational participants through the appropriate use of relevant rules and communication cycles.

Figure 9.2: Weick's Model of Organizing

Enactment Phase

In the enactment phase of organizing, organizational participants attempt to make sense of the different situations and demands confronting the organization. For example, if a customer asks a mechanic to fix her broken car, the mechanic may have to ask some questions and do some investigation to ascertain what is wrong with the car and what needs to be fixed. In the enactment phase of organizing, the mechanic ascertains the complexity of the request being made by the customer and utilizes the most appropriate rules and cycles to make sense of the request. Decisions need to be made about whether the use of rules and cycles by organizational participants have helped to make sense of different situations and whether more cycles should be enacted to further reduce uncertainty about these situations. On the basis of decisions made in the enactment phase, additional rules and cycles are chosen and repeated to continue reducing the level of equivocality of

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difficult situations until achieving an optimal level of understanding.

Selection Phase

In the selection phase of organizing, decisions are made after the enactment process is completed about whether there are rules available to guide effective responses to different situations, or whether communication cycles need to be enacted to guide response strategies. On the basis of decisions made in the selection phase of organizing, additional rules and cycles are chosen and repeated to guide the best responses to difficult situations, enabling organization members to effectively react to different inputs. In the selection phase of organizing, organizational participants develop the best communication strategies for addressing specific organizational issues. For example, in the mechanic situation, the selection phase of organizing would involve the mechanic using rules and cycles to determine what actions to take to actually fix the broken car. The mechanic might have to consult some repair manuals or ask advice from other more experienced mechanics (use of communication cycles) to determine the best actions to take to repair the car. Each of those communication cycles will help the mechanic develop rules for guiding car repair activities.

Retention Phase

In the retention phase of organizing, information about the ways organization members have responded to different inputs during the enactment and selection phases is gathered and stored. The various communication cycles developed and used to process equivocal information are evaluated for their usefulness, and if they are deemed to be successful strategies for coping with equivocal situations, they are made into rules for guiding responses to similar inputs in the future. A repertoire of rules is developed and stored in the retention phase to be used as a form of organizational intelligence to guide future organizational actions. It is this organizational intelligence that makes experienced organizational members so valuable. They can use the wisdom they've developed from past experiences to guide future action and response.

Once again, in terms of the mechanic situation, the retention phase of organizing would involve the mechanic using rules and cycles to determine what was learned from the enactment and selection phases of organizing for fixing this broken car and for guiding similar car repairs in the future. The mechanic might test drive the car after completing the repairs to see how well the repairs worked (a communication cycle). The mechanic might also ask the customer how satisfied she was with the repairs to assess the effectiveness of the repair strategies used (another communication cycle). Based on what the mechanic learns from these communication cycles, he can determine how effective the enactment and selection phases were and establish rules to guide future enactment and selection activities when encountering similar car repair requests. These rules, if shared with other mechanics, can become part of organizational intelligence that can enhance organizational response and functioning.

Feedback Loops

The enactment, selection, and retention phases work together in the process of organizing, and feedback loops among the phases are used to coordinate their activities (see Figure 9.2). Feedback loops are message systems connecting the phases, enabling coordination. Weick's model identifies two feedback loops: one connects retention to enactment, the other connects retention to selection.

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In this way, the retention phase, which contains the organization's intelligence, can be used to guide the enactment and selection activities.

In modern organizations, positive feedback loops are used to gather information from past experiences (retention) to guide interpretation (enactment) and response (selection) to confront new organizational issues. For example, in organizational development efforts, positive feedback loops are used to initiate the gathering of relevant information from key constituents and experts to guide problem diagnosis and the development of interventions to improve organizational operations.

Negative feedback loops are used to stop the flow of information from retention to enactment and selection, halting the performance of new behaviors; negative feedback loops are also used to check the flow of information about enactment and selection activities to the retention phase. In low equivocality organizational situations, negative feedback loops are used to minimize over‐responses, limiting the use of unnecessary and wasteful communication activities. For example, a thermostat is used to regulate heat in your home. When the actual temperature in your home falls below the temperature set on your thermostat, an electronic positive feedback loop is sent to the furnace to start pumping out heat in the house. Once the set temperature is reached, a negative feedback loop is used to electronically alert the furnace to stop pumping out heat. The use of feedback to regulate activities has become known as cybernetic control, because it controls organizational activities to achieve goals.

To summarize: In the enactment phase, message inputs are interpreted to assess their level of equivocality for the particular organization. How easy or difficult will this issue be for organization members to make sense of and respond to? Feedback loops between the enactment and retention phases of organizing allow organization members to use the information stored in the retention phase from past organizational experiences to guide evaluation of messages and to store the information about the messages enacted for future reference. In the selection phase, during which rules and cycles are chosen and created in response to information inputs, feedback loops from retention are used to guide organization members in deciding how to process message inputs by drawing on organizational intelligence and the repertoire of rules stored in the retention phase. The retention phase constantly draws information from enactment and selection through feedback loops to update organizational intelligence (relevant information about message inputs and organizational response strategies).

Organizations in Action: Why Did Facebook Succeed Where MySpace Didn't?

Some rivalries between corporate giants are hotly but pretty evenly contested—think Coke and Pepsi, McDonald's and Burger King, Ford and Chevy. But in the 21st century‐ "social media" world, one particular corporate rivalry has turned out to be a huge mismatch: the contest between Facebook and MySpace. That competition is all but over, and Facebook is the clear winner.

At its peak in 2006, MySpace had more than 100 million unique users per month, but that dropped to 70 million in 2010. Meanwhile, Facebook now has more than a half billion personal accounts, along with huge visibility (including an Oscar‐winning movie on the life of Facebook's CEO Mark Zuckerberg), not to mention profits in the range of $2 billion annually. The question is, why did Facebook succeed where MySpace didn't? And what principles of organization development (OD) might be relevant here?

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Why isn't MySpace as popular as Facebook?

As outlined in this chapter, organizations must do something to make sense of uncertainty (enactment), choose how to respond (selection), and then use this response as a way to guide their activities (retention). To the extent that this process promotes an adaptive, learning organization, Facebook just plain out‐analyzed its main competitor.

Wisely, Facebook used the experiences of MySpace as a key part of the enactment phase. Kevin Kelleher, a contributor to CNN Money, believes that Facebook is succeeding where MySpace floundered because it learned from its rival's mistakes. When it started in 2004, he writes, MySpace decided to "make its pages whatever users wanted them to be." At the time, the environment was highly equivocal, and MySpace "wasn't sure what would make a social network click. So it let its members figure it out, offering them to design their own pages with widgets, songs, videos, and whatever design they pleased. The result was a wasteland of cluttered and annoying pages." (Kelleher, 2010) And, in the end, it wasn't what people really wanted.

On the other hand, Facebook's research led it to believe, in the words of Guardian writer Jenna McWilliams, that people "don't need new stuff to do, they need new technologies to support doing the stuff that already matters to them." Such a feedback loop told Facebook that users didn't want to create an art project or build a personal museum—they wanted a way to connect with others. This lesson served Facebook well in terms of selection and retention. One of Facebook's early hires, Karel Baloun, put it this way: "Mark [Zuckerberg] had a clear vision for the company. The vision was to be a communication platform, not an art project." (McWilliams, 2009)

In the world of social media, MySpace's loss morphed into Facebook's gain.

Critical Thinking Questions:

1. If you were the CEO of MySpace, what approach would you take now to increase the popularity of your product? Or is MySpace a "lost cause"?

2. In the turbulent world of cyberspace, what factors might still make it difficult for Facebook to prosper?

3. Some believe that MySpace has struggled partly because it hired too many "conventional" managers with MBAs. With Weick's theories in mind, is there any merit to that idea?

Sources:

Kelleher, K. (2010, November 19). How Facebook learned from MySpace's mistakes. CNN Money. Retrieved from http://tech.fortune.cnn.com/2010/11/19/how‐facebook‐learned‐from‐myspaces‐ mistakes/ (http://tech.fortune.cnn.com/2010/11/19/how‐facebook‐learned‐from‐myspaces‐mistakes/)

Why did Facebook succeed? An early hire speaks. The Karel Baloun interview. (2008, September 10.) Mixergy. Retrieved from http://mixergy.com/inside‐facebook/ (http://mixergy.com/inside‐ facebook/)

http://mixergy.com/inside-facebook/
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How is organizational intelligence gathered in your organization?

McWilliams, J. (2009, June 23). How Facebook beats MySpace. The Guardian. Retrieved from http://www.guardian.co.uk/commentisfree/cifamerica/2009/jun/23/facebook‐myspace‐social‐ networks (http://www.guardian.co.uk/commentisfree/cifamerica/2009/jun/23/facebook‐myspace‐social‐ networks)

Gathering Organizational Intelligence

Organizational intelligence is often distributed throughout the organization and is typically held by particularly experienced and accomplished organization members who have developed specialized knowledge about how to effectively handle organizational activities. To make knowledgeable decisions about organizational practice, participants must rely on obtaining information from these savvy organizational representatives (such as key coworkers or supervisors). However, it is not always easy to access organizational intelligence in organizations. It is therefore critical for organizations to preserve organizational intelligence and make it available to provide guidance in equivocal situations. Moreover, in highly

equivocal situations, organizational participants may find it useful to interact with external experts from outside of the organization—scientists, government officials, consumer advocates, lawyers, accountants, consultants, and such—to process the equivocal information to an understandable level through the performance of communication behavior cycles. Sometimes organizational intelligence can also be derived from relevant media, such as reference books or websites. Increasingly, organizational participants gather information online, often using search engines such as Google or Bing to find relevant information.

Proactive organizational participants can keep on top of changes in the organization's information environment by paying particular attention to organizational intelligence gathered by boundary‐ spanning personnel. As we will discuss in the next chapter, boundary‐spanning personnel are organizational participants who are often concentrated at the top and the bottom of the organizational hierarchy in positions where they interact with key representatives from relevant organizational publics. These boundary spanners—executives, receptionists, salespeople, consumer relations personnel, and so on—have opportunities to gather information from key constituents from outside the organization who have unique insights about organizational activities. These boundary spanners can help gather, evaluate, and share relevant information from the organization's environment that can help guide appropriate responses to different emergent issues.

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9.3 Communication and the Process of Organizational Development

The primary goal of organizational development is to enhance organizational effectiveness (Schein, 1969). Communication is central to organizational development efforts because the effectiveness of organizing activities is largely dependent on how well organization members are able to communicate with one another and use relevant information. Careful analysis of organizational communication patterns is a key part of organizational development efforts to

help identify organizational difficulties, inform the development of evidence‐based organizational intervention strategies to reduce problems, and guide the implementation of organizational development activities to promote organizational effectiveness (Kreps, 1985).

The ability to communicate effectively both internally and externally in organizational life enables organizational participants to create and maintain an ongoing state of organization, balancing the interdependent yet often contradictory organizational needs for stability and innovation. In effective organizations, members use internal channels of communication to elicit cooperation from other members to coordinate the daily accomplishment of organizational activities, promoting organizational stability. Members of effective organizations also use external channels of communication to adapt to and influence their organization's relevant environment, promoting organizational innovation.

Information sent through external channels can be used to influence the activities of individuals and groups in the relevant environment. Public relations activities, for example, can help organization members identify environmental risks and opportunities within the interorganizational field, inform organization leaders about the need for innovations to meet these risks and opportunities, and motivate support and action on behalf of the organization from the environment. Organizational development efforts are used to help maintain the balance between internal and external communication in organizations, as well as to promote a balance between innovation and stability (Kreps, 1988). We will discuss these channels of communication in more detail in the next chapter.

The Nature of Organizational Development

Organizational development has been described as an applied leadership strategy for developing evidence‐based organizational interventions for directing change and enhancing organizational effectiveness (Kreps, 1985, 1989, 1995). Beckhard (1969) defined organizational development as a renewal and change effort that is

planned, organization‐wide, and managed from the top of the organization to increase organizational effectiveness through planned interventions in organizational activities.

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Organizational development efforts involve systematic processes for gathering data to diagnose the problems and constraints facing organizations. It is the process of identifying relevant organizational issues, as well as developing strategies for addressing these problems that fuels organizational development.

Organizational development efforts begin with a systematic diagnosis of organizational problems, leading to the development of strategic plans for directing change within organizations (interventions), and the mobilization of resources to carry out innovation efforts. Organizational development experts help to develop strategic plans for helping the organization rectify the problems diagnosed and mobilize resources to carry out intervention strategies. Strategic use of organizational communication is a critical part of gathering information about organizational problems and for implementing interventions to address these problems. Organizational development involves collecting relevant information from organizational participants about impending organizational constraints and opportunities.

Organizational Reflexivity

As already noted, organizational leaders need feedback about internal and external organizational activities to direct successful innovation within their organizations. External organizational communication enables leaders to recognize emerging external constraints on organizational activities. Many external communication activities, such as public relations, lobbying, government relations, as well as market and public opinion research, are designed to seek relevant feedback and gather key information from organizations' relevant environments. Organizational audits and survey research can also provide important information for guiding organizational development efforts.

Information from these external sources can also increase organizational reflexivity, helping organization members see their organization as representatives from the relevant environment see the organization. Such feedback is essential for assessing the adequacy of organizing activities and directing the course for organizational innovation. Information gathered through external communication can also be used to direct organizational activities to coordinate with the activities of others within the organization's relevant environment. External communication is also used to provide persuasive information to environmental representatives about the activities, products, and/or services of the organization (Kreps, 1988).

In addition to interpreting information about environmental changes and constraints to guide organizational innovation, leaders also need information about the state of internal organizational conditions to guide innovation. Internal feedback—gathered from discussions with organization members, organizational audits, or through observations—enables leaders to see clearly the internal state of the organization from the perspectives of organizational members, increasing organizational reflexivity (Kreps, 1995). Internal sources of feedback help leaders identify emerging problems and issues with organizational operations that may need to be addressed in organizational development efforts.

Performance Gaps and Slack Resources

Increased reflexivity enables organization members to recognize important performance gaps— discrepancies between expected and actual organizational performance. Performance gaps occur

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There is a vast array of diverse communication tools and techniques available. The decision about which to use in a given instance depends on several factors, including the nature of the information to be transmitted, the size of the organization, and any geographic constraints that may be operating. To think about: what methods did Apple and CNN use to communicate with their employees about organizational changes? How did they seek feedback from

Communication Tools and Techniques

whenever organizational goals are not fully accomplished. There are many kinds of performance gaps that occur in organizational life. The further the organization is from the accomplishment of key goals, the wider the performance gap is. Organizational communication can help organization members gather relevant information about the nature and seriousness of organizational performance gaps.

When leaders are well informed about performance gaps, they are able to make informed decisions about the needs for organizational development. Yet merely having information about needed organizational changes and improvements does not mean that relevant innovation can be developed and implemented. Slack resources, resources that are not already committed to other purposes within organizations, are needed to energize organizational interventions. Slack resources can include personnel who may be available to help develop and implement organizational innovation interventions. Slack resources can also include equipment or computer time that is available or money that is not earmarked for other purposes. It is imperative to identify available slack resources to support the development and implementation of organizational innovations.

Being Proactive

The better organization leaders are at gathering relevant information from internal and external information sources, the better they will be at recognizing important performance gaps, diagnosing current and potential organizational problems, and planning innovative organizational development strategies for addressing these problems. Proactive organizational leaders do not just wait to react to serious internal and external issues. They gather regular information from internal and external sources to identify emerging problems. They direct innovative activities to meet upcoming organizational problems before they hit. They try to stay one step ahead of performance gaps.

Being proactive also means trying to influence internal and external organizational environments to promote effective organizing and limit exposure to unexpected events. To develop proactive organization, leaders must establish effective communication relationships with knowledgeable individuals both internal and external to the organization. By seeking relevant information and feedback from key sources, leaders can stay on top of

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employees? Were these methods effective?changing organizational conditions. With relevant organizational information in hand, leaders can proactively plan innovative courses for ongoing organizational development.

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Why are output measures popular in

9.4 Organizational Development and Organizational Effectiveness

As we have noted, the primary goal of organizational development efforts is to promote and maintain organizational effectiveness. The term effectiveness has been used by many organizational scholars, but what is organizational effectiveness? How does communication relate to the development of effective organizations? When is an organization effective? There are two common strategies for determining effectiveness: output and process measures of effectiveness. Organizational effectiveness is a combination of high quality process and output.

There are important differences between effectiveness and efficiency. Whereas efficiency refers to doing things correctly (doing them "right") and minimizing organizational effort expended, effectiveness refers to doing what is best for the organization (doing the right thing) to achieve organizational goals. Whereas efficient behavior might lead to organizational effectiveness if the right behaviors are performed correctly, efficient performance of outdated or inappropriate organizational activities (doing the wrong thing correctly) will not help the organization, inevitably reducing organizational effectiveness.

Output Measures of Effectiveness

An output measure of organizational effectiveness is an examination of the quantity and quality of raw material outcomes from organizational activities. Output measures of organizational effectiveness have been extremely popular in evaluating organizational performance. The most common output measures are of organizational productivity and profit, evaluating the organization's "bottom line."

Output measures are popular because they are eminently sensible and logical. They follow the ordered scientific, programmatic orientations of classical organizational theory that envision productivity as a primary goal of organizing. If an organization fails to produce the products and outputs it is designed to produce, how can it be effective? If a for‐profit company continually loses money, how can it be effective? Certainly, organizations that lose money and fail to accomplish goals cannot last long in competitive interorganizational environments. They are doomed to move toward entropy because they fail to achieve the primary production‐related purposes for which they were developed.

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organizations? Output measures are also popular because they are relatively straightforward to assess. Organizational output is amenable to direct observation and quantification. Accounting techniques, performance measures, and inventory control methods are used to evaluate organizational profitability and productivity, and quality control measures are used to assess the competence of material organizational outputs. There is a strong positive relationship between the effectiveness of human communication and the effectiveness of organizational outputs. The more coordinated organizational processes are, the better organization members are at achieving organizational goals. Effective communication is essential for promoting the coordination needed to demonstrate productivity.

However, although the raw output measure of organizational effectiveness is logical and measurable, it is not sufficient alone for assessing the overall effectiveness of organizing. Evaluation of raw outputs fails to assess many important qualitative issues about the effectiveness of organizational life. For example, organizations can demonstrate high productivity and profitability while also being inhumane, coercive, and oppressive to organization members and to representatives within the relevant environment. Ruthless management techniques can sometimes result in increased profits, at least in the short run. Yet these insensitive organizational activities do not lead to the development of effective organizational relationships. Eventually, poor organizational relationships are likely to harm organizational performance by jeopardizing cooperation between organizational participants. Organizational effectiveness is much more than raw output.

Process Measures of Effectiveness

In addition to the raw output measure, organizational effectiveness can be assessed by the quality of organizational communication processes .