1 ORGANIZATIONS AND ORGANIZATIONAL CHANGE Chapter 8.

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ORGANIZATIONS AND ORGANIZATIONAL CHANGE

Chapter 8

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Organizations and Organizational Change: Overview

Three Theories of OrganizationsOrganizational StructureComponents of Social Systems

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Organizations: A coordinated group of people who perform tasks to produce goods or services.

3 Major Schools of thought:1. Classical Theory

2. Neoclassical Theory

3. Systems Theory

Three Theories of Organizations

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Developed in early 20th century

Describes form and structure of organizations

4 components:1. A system of differentiated activities2. People3. Cooperation toward a goal4. Authority

Three Theories of Organizations: Classical Theory (1 of 3)

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4 Structural Principles:1. Functional Principle: Division into

units that perform similar functions.2. Scalar Principle: Structured by a

chain of command that grows with increasing levels of authority.


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4 Structural Principles:3. Line/Staff Principle: Line functions

directly affect goals; staff function supports line activities.

4. Span-of-Control Principle: Concept related to number of subordinates a manager is responsible for supervising


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Developed in the 1950sDescribes psychological or behavioral

issues with organizationsArgued for less rigid – more humanistic

work

Three Theories of Organizations: Neoclassical

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Developed in the 1970sDescribes organizations in terms of

interdependent components that form a system

Complex and dynamic view of organizations

Three Theories of Organizations: Systems (1 of 3)

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Organization is composed of 5 parts:1. Individuals

2. Formal organization

3. Small groups

4. Status and role

5. Physical Settings


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With all these parts – need means to provide coordination and linkage Communication Decision making

Parts and interactions do not exist for themselves, but for a larger goal


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Structure: arrangement of work functions within an organization designed to achieve efficiently and control.

Various types of structuresOrganizations seek the optimal match of

structure to their environment

Organizational Structure

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Basic elements of organizational

structure:1. Mutual adjustment2. Direct supervision3. Standardization of work processes4. Standardization of work output5. Standardization of skills and knowledge

Organizational Structure: Coordinating Mechanisms

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1. Operating core

2. Strategic apex

3. Middle line

4. Techno-structure

5. Support Staff

Organizational Structure: 5 Parts of Organizations

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Reorganizing: Process of changing the manner in which work is configured in an organization to achieve greater efficiently.

Downsizing: Process of reducing the size of an organization by the elimination of jobs and employees; “right-sizing”.

Organizational Structure: Reorganizing & Downsizing (1 of

2)

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Job loss usually occurs at middle line, techno-structure and support.

Companies usually become flatter.

Organizational Structure: Reorganizing & Downsizing (2 of

2)

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Social System: The human components of a work organization that influence the behavior of individuals and groups.

Roles: Set of expectations about appropriate behavior in a position

Social Systems: Roles (1 of 3)

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Important aspects of rolesImpersonal

Related to task behavior

Difficult to pin down

Learned quickly and can produce major behavior changes

Roles and jobs are different

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Role Episodes

Stage 1: Group expectations for a particular position

Stage 2: Communication about expectations

Stage 3: Perceived expectations about role

Stage 4: Actual role behavior

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Social Systems: Norms

Norms: A set of shared group expectations about appropriate behavior.

Important Properties of Norms“Oughtness” or “shouldness” – prescription for

behavior

More obvious for important behaviors

Enforced by group

Degree that norms are shared and that deviation is acceptable vary

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Social Systems: Organizational Culture

Culture: The language, values, attitudes, beliefs, and customs of an organization.

3 Features of Organizational CultureOrganization’s culture can be traced to founders

Develops from organizations experience with external environment

Develops from need to maintain effective working relationships with employees.

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Organizational Culture

Organizational Culture: A common perception held by the organization’s members; a system of shared meaning.

• Innovation and risk taking

• Attention to detail

• Outcome orientation

• People orientation

• Team orientation

• Aggressiveness

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Ben & Jerry’s is founded on and dedicated to a sustainable corporate concept of linked prosperity. Our mission consists of 3 interrelated parts:

Product MissionTo make, distribute & sell the finest quality all natural ice cream & euphoric concoctions with a continued commitment to incorporating wholesome, natural ingredients and promoting business practices that respect the Earth and the Environment.

Economic MissionTo operate the Company on a sustainable financial basis of profitable growth, increasing value for our stakeholders & expanding opportunities for development and career growth for our employees.

Social MissionTo operate the company in a way that actively recognizes the central role that business plays in society by initiating innovative ways to improve the quality of life locally, nationally & internationally.

http://www.benjerry.com/

Example (1 of 4)

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We have a progressive, nonpartisan social mission that seeks to meet human needs and eliminate injustices in our local, national and international communities by integrating these concerns into our day-to-day business activities. Our focus is on children and families, the environment and sustainable agriculture on family farms.

• Capitalism and the wealth it produces do not create opportunity for everyone equally. We recognize that the gap between the rich and the poor is wider than at anytime since the 1920's.We strive to create economic opportunities for those who have been denied them and to advance new models of economic justice that are sustainable and replicable.

• By definition, the manufacturing of products creates waste. We strive to minimize our negative impact on the environment.

Organizational CultureExample (2 of 4)

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• The growing of food is overly reliant on the use of toxic chemicals and other methods that are unsustainable. We support sustainable and safe methods of food production that reduce environmental degradation, maintain the productivity of the land over time, and support the economic viability of family farms and rural communities.

• We seek and support nonviolent ways to achieve peace and justice. We believe government resources are more productively used in meeting human needs than in building and maintaining weapons systems.

• We strive to show a deep respect for human beings inside and outside our company and for the communities in which they live.

Example (3 of 4)


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Ben & Jerry’s offers a progressive benefits package that includes the usual stuff plus paid family leave, health club memberships and three free pints of Vermont’s Finest super premium ice cream, frozen yogurt and sorbets every day! Ben & Jerry’s Homemade, Inc. is an equal opportunity employer, dedicated to the policy of non-discrimination in employment on any basis including gender, race, ethnicity, veteran status, religious affiliation, sexual orientation, age, disability or national origin.

Example (4 of 4)


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Mission statement

At IBM, we strive to lead in the creation, development and manufacture of the industry's most advanced information technologies, including computer systems, software, networking systems, storage devices and microelectronics.

We translate these advanced technologies into value for our customers through our professional solutions and services businesses worldwide.

http://www.ibm.com/investor/company/index.phtml


Example (1 of 4)

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IBM is committed to its obligations to society. Some of the programs in support are:

Corporate Responsibility Report

DiversityEnvironmental Affairs

IBM Governmental Programs

IBM Community Relations

IBM Accessibility Center


Example (2 of 4)

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IBM is so much more than just a job. It’s a place where you can dream, innovate and work with other intelligent and motivated people — a truly global company. One where you can find work/life balance and make a difference. Just use the links below to explore some of the reasons you might want to work at IBM.


Example (3 of 4)

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Reason #97: IBM makes a difference …. And so can youReason #86: It’s enduring…but it’s a whole new ball game!Reason # 58: Big Blue is environmentally green!Reason #24: Great technology and cool productsReason #22: Balance doesn’t mean standing on your head juggling projects until midnight.Reason #17: IBM has a lot to give, and we give back freely.Reason #9: Global is as global does.Reason #4: People and their differences really matter at IBM.Reason #1: IBM is a great place to work…and you can make a difference


Example (4 of 4)

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Organizational Culture: A common perception held by the organization’s members; a system of shared meaning.

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Organizational Culture: News Clip

• Innovation and risk taking

• Attention to detail

• Outcome orientation

• People orientation

• Team orientation

• Aggressiveness

• Stability

Microsoft clip– Write down examples from these different aspects of culture

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Organizational Development: A system of planned interventions designed to change an organization’s structure and/or processes to achieve a higher level of functioning.

Organizations exist to fulfill some purpose or objective.

Organizations do not change quickly. Organizations need to change as the environment

changes.

Organizational Change

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Organizational change follows a pattern of punctuated equilibrium.

Individuals find change difficult; thus they often resist change.

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Organizational development is the process of assisting organizations in preparing for and managing change.

Often change will occur by altering the organization’s work structure or worker attitudes.

4 general phases of change Diagnostic Intervention Implementation Evaluation


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There is no single theory or approach but there is a variety of methods to help organizations manage change.

Focus is on long-term solutions. Generally aimed at the team, unit or

organizational level and rarely at the individual.

An applied, practitioner-oriented area of the behavioral sciences.


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Change Agent – usually the OD consultant who guides OD; involved in diagnosis, identification of courses of action, recommending specific changes, and occasionally implementation.

Client – recipient of the change effort; this is usually the organization, but occasionally may be a group of individuals.

Intervention – what the change agent does on behalf of the client.

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Denial is a psychological defense. People do not want to believe the change is

“real”. They are essentially in “shock”.

Phase 1: Denial

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They may try to:– Hold onto the past, continue “business

as usual”.– Avoid thinking about the change.– Try to stop, or slow down

implementation of the change.– Ignore their own feelings; focus

outside of themselves.

Phase 1: Denial

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Phase 2: Resistance

Resistance to change is normalPeople are being asked to give up their

“comfort zone” for the unknown

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People in Phase 2 may need acceptance of feelings and reassurance of their value as an employee.

Employees may feel: Afraid Threatened Powerless Angry Upset Anxious

Phase 2: Resistance

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Phase 3: Exploration

People are coming off the “low point” in the Change Curve.

People begin accepting the change and start to: Take an interest in the organization again Clarify goals Explore how to make the change work

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People in Phase 3 need a clear vision of what the future will look like and how they will fit in.

Accepting the Change

Phase 3: Exploration

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Phase 4: Commitment

People feel that they “made it through” the change. People recover their sense of productivity and self-

esteem. Change now becomes the new “business as usual”.

Recognize that some members of a group may not make it to this stage and will require additional

assistance.

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People need to be rewarded for their success

Thanks! We couldn’t have made this change without your hard work and support!

Phase 4: Commitment

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Empowerment

Empowerment: The process of giving employees in an organization more power and decision-making authority within a context of less managerial oversight.

4 Dimensions (Spreitzer, 1997): Meaning Competence Self-determination Impact

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Model of Planned Organizational Change

To change an organization you need to know:1. Variables that can be manipulated by intervention2. Outcomes intended by change

Work setting has 4 components:1. Organizing arrangements2. Social factors3. Physical setting4. Technology

These components influence Individual Development & Organizational Performance

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Psychological ownership: feeling that one is psychologically tied to an object and is possessive of it.

Human needs associated with psychological ownership: Self-enhancement Self-continuity Control and efficiency

Overcoming the Resistance to Change

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Three types of organizational change that influence the relationship between psychological ownership and acceptance/rejection of change: Self-initiated vs. imposed change Evolutionary vs. revolutionary change Additive vs. subtractive change


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Education and communication

Participation

Facilitation and support

Negotiation

Manipulation

Coercion

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Major Organizational Change Interventions

Features of culture change process:

1. Strong Leader

2. A clear vision of what needs to be done

3. Development of new work procedures

4. An organization is open to learn.

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Total Quality Management: Comprehensive approach to achieving greater

organizational efficiency based in part on the use of statistical information to aid in decision making.

Bridges psychology, statistics, marketing, business


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Total Quality Management: 4 factors:

1. Sharing of information2. Developing knowledge3. Rewarding organizational performance4. Redistributing power

Research shows that organizations have positive experiences with TQM (Lawler et al., 1995).


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Other OD Techniques

T-groups (sensitivity training) Management by Objectives (MBO) Team building Survey Feedback

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Use unstructured group interaction to assist workers in achieving insight into their own motivations and behavioral patterns in dealing with other organizational members.

Typically uses a professional leader that serves as a facilitator.

Goals Worker to gain insight into own behavior Develop greater openness Improve skills in understanding and dealing with others

OD Techniques: T-groups

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Empirical Research: Research is inconclusive They may increase job satisfaction and employee

attitudes Concern is whether insight and increased

sensitivity transfers to the job Popular in the 60’s and 70’s, but not often

used today.

OD Techniques: T-groups

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A goal-setting technique in which supervisors or subordinates jointly set performance goals. At the end of the goal period, their attainment is evaluated and new goals are set.

Most widely used OD technique - it can be applied almost anywhere.

One of the most successful OD techniques when properly implemented.

OD Techniques: Management by Objective (MBO)

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OD Techniques: MBO

Employees must participate in goal-setting

Feedback must be provided

Guidelines for improvement must be provided

Goals must be realistic

Upper level management must support the

program

Equal emphasis on the individual, work group,

and organizational goals

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Team building – teams of workers discuss how to improve team performance by analyzing group interactions; teams identify the strengths and weaknesses of interactions with each other.

Similar to T-groups except the focus is NOT on the individual, but on team functioning and goal attainment.

May be the best OD technique for increasing job satisfaction and morale.

Studies indicate that it is better than T-groups.

OD Techniques: Team Building

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Process whereby the OD consultant works with the organization to develop a survey instrument to collect data that is used to solve specific problems or institute a program for managing change.

Surveys usually measure employee attitudes or perceptions of work-related issues.

OD Techniques: Survey Feedback

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Surveys can be difficult to design to obtain reliable and valid data. Should be done by I/O psychologists or social scientists trained in survey development.

Surveys are administered to all workers or to a representative sample.

Consolidate responses and present the results to the client.


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Advantages: Increases upward flow of communication Positive effect on workers’ attitudes Shows workers they are NOT alone in their

perceptions and attitudes Efficient for collecting large amounts of data Anonymity can provide accurate appraisals

Empirical Research Feedback surveys are effective OD techniques

when followed up by positive actions.


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Many techniques – some work (e.g., survey feedback, MBO) while others show mixed results (e.g., T-groups, TQM)

What works in one organization may not work in another

Quality of the job of OD consultants varies greatly

Measuring effectiveness is difficult

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Empirical Organizational Change Research

Change interventions resulted in no change more than half the time (Porras & Robertson, 1992)

The percentage of studies reporting a negative change is small (Porras & Robertson, 1992)

To be successful, organizational change must include systemwide design and transformation strategies (Macy & Izumi, 1993).

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Supervisors’ Challenge

Supervisors face unique challenges with organizational change: Even though managers may disagree with higher level

decisions, it is still their professional responsibility to implement the change.

Voicing disagreement of the change to the workgroup can be damaging to the organization.

Disagreement with change may create an “us vs. them” dynamic.

Supervisors can help their subordinates adapt to the change.

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What is the Manager’s Role?

Many sizeable changes come from the topmost levels of an organization and are generally unexpected by the staff below them.

Managers are required to act as a link between different levels in the organization.

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“Managing” Change is Challenging

Many leaders want employees to just make the change happen and may not be interested in how employees feel about it.

Change is much more traumatic and difficult for employees than most leaders believe.

Many employees think it is wrong to feel upset about change or voice concerns.

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“Just do it” May Lead to Disaster!

Difficulties are pushed underground Externally, people act like nothing is wrong Internally, they could be:

Paralyzed Disoriented Angry

Especially true for organizations and individuals that don’t often experience change!

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Summary

Change is often traumatic and difficult. Leading a group through a change provides

significant challenges. Successful change management requires you to:

Recognize the source of change. Evaluate the complexity of the change. Plan ways to involve people. Choose/recognize the time scale. Formalize/communicate a plan.

1 ORGANIZATIONS AND ORGANIZATIONAL CHANGE Chapter 8.

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