Mba-III-Organizations Design & Organization Development (10mbahr341) - Notes

OrganizationDesignandDevelopment10MBAHR341
HUMAN RESOURCE AREA ORGANIZATION DESIGN & DEVELOPMENT

Sub Code: 08MBAHR341 ORGANIZATION DESIGN MODULE 1 Organization: Nature & Scope Definitions overview of various components & structure, Evolution of Organization theory, Organizational Theories images of Organization. Organizational Effectiveness Definition importance & approaches to organizational Effectiveness the goal attainment approach the system approach the strategic approach MODULE 2 Organization Design: Approaches to organizational design Organizational designs for different excellences. Competitive excellence Institutionalized excellence - Rejuvenatory excellence - Missionary excellence - Versatile excellence - Creative excellence - External nurturance of organizationalexcellence : The role of super system in promoting excellence - The role of domain influencing institutions in promoting excellence- The role of the government in promoting organizational excellence MODULE 3 Structural Dimensions of Organization design: Organization Design - Components of Organization Design Dynamic Balance Organization structure, dimension - division of labour, standardization, horizontal Differentiation, Advantages & disadvantages of Departmentalization; Vertical Differentiation, Span of Control, Centralization, Formalization, Implication of High Formalization, Flexibility. MODULE 4 Contextual Dimensions & Structural Options: Contextual Factors, types of structure, Influence of: Environment, Strategy, Size & Technology and Power & Politics on Structure, Flat structure ORGANIZATION DEVELOPMENT MODULE 5 Foundations of Organizational Development: Conceptual frame work of OD, History of OD, First order and second order Change, Values, assumptions and believes in OD, characteristics of OD, Participation and Empowerment, Teams and teamwork, Parallel learning structures, A normative-re-educative strategy of changing, Applied Behavioural science, Action research. MODULE 6 Managing the OD Process: Components of OD Process, Diagnosis, Action& Program Management; Diagnosis: Diagnosing the System, its subunits\ and Processes, Diagnosis using the Six-box Organizational Model, Third Wave Consulting: The Action Component: nature of OD intervention, analyzing discrepancies: The Program Management Component: Phases of OD Programs, model for managing change, creating parallel learning structures. MODULE 7 OD interventions: Definition, factors to be considered, choosing and sequencing intervention activities, classification of OD interventions, results of OD, typology of interventions based on target groups. Human process interventions (individual, group and inter-group human relations): Individual based: coaching, counseling, training, Behavioural modeling, delegating, leading, morale boosting, mentoring, motivation, etc., Group based: conflict management, dialoging, group facilitation, group learning, self-directed work teams, large scale interventions, team building, and virtual teams. Inter-group based: Organization mirroring, third party peace making interventions, partnering Techno structural (Structures, technologies, positions etc.,) & Strategic interventions: Techno structural: Balanced scorecard; business process reengineering; downsizing and outsourcing; MODULE 8
SJBIT/MBA
Page1
The Future and OD: The changing environment, Fundamental strengths of OD, Implications of OD for the client, ethical standards in OD, ODs future, OD Consultants role, issues in consultant-client relationship, Power, Politics& OD, Research on OD
10MBAHR341 ORGANISATIONS: STRUCTURE, PROCESS AND DESIGN MODULE I ORGANISATION: Nature & Scope Definitions overview of various components & structure, Evolution of Organization theory, Organizational Theories images of Organization. Organizational Effectiveness Definition importance & approaches to organizational Effectiveness the goal attainment approach the system approach the strategic approach ORGANIZATION The term organization derives from the Greek word organon, meaning a tool or an instrument. Organization refers to a concrete and tangible entity, which describes the manner in which men, machine, and material resources are or should be organized and inter-related. ORGANIZATION IS (a) A social unit or human grouping, deliberately structured for the purpose of attaining specific goals. (b) Collection of people for the purpose of achieving results or accomplishing tasks through combined efforts synergy. (c) Two or more people working together in a co-ordinate manner to achieve group goals NATURE OF ORGANISATION (a) Activity analysis: Analysis regarding which work has to be performed. What emphasis is to be given to each activity. (b) Decision Analysis: Analysis of various relationships between the tasks of manager and those of his subordinate, peers and superiors. CHARACTERISTICS OF AN ORGANISATION a) Two or more persons: Group or formed to achieve goals. b) Common goals: Group working together towards common goals. c) Co-operative efforts: Ensures smooth functioning and combine the efforts of people with co-operation. d) Division of work: Divided into small tasks, similar tasks combined based on specialization and are assigned to individuals to ensure maximum levels of performance e) Communication: Vertical, horizontal established to facilitate delegation of authority land smooth flow of information. f) Rules and regulations: Implemented to members to maintain consistency. g) Pyramidal shape: narrow span of control at top and wider span of control at lower levels of management. h) Synergy: Together everyone achieve more. i) Limitation on member behavior. SJBIT/MBA Page2
ORGANISATIONAL DESIGN: It is the overall set of structural elements and the relationships among those elements used to manage the total organization as a whole. Organization design is concerned with making decisions about the forms of coordination, control and motivation that best fit the enterprise. In making these decisions, it is necessary to consider external factors like the market and internal factors like the needs and aspirations of the member of the enterprise. ORGANISING: A Managerial function and process of defining and grouping of activities of the enterprise and establishing, authority relationship among them. Is the Process by which an organization is created. Is the process which prescribes formal relationships among people. It helps in accomplishing objectives set in the planning process. It decides how best to group organization activities and resources effectively and efficiently. It is a process of differentiating and integrating activity. ORGANISATIONAL PROCESS: It involves identifying, defining, grouping activities, establishing relationships, defining authority, responsibility delegation, accountability and allocating resources to achieve goals efficiently and effectively. DIFFERENTIATION: Departmentalization or segmentation of Activities: INTEGRATION: Achieving unity of effort among various departments into individual jobs with specific duties and assigning authority to carry out those duties and aggregating individual jobs into departments having appropriate bases. ORGANISATIONAL STRUCTURE: It is the formal network by which jobs/tasks are divided, grouped and coordinated. It reflects formal relationships among groups and individuals. It provides guidelines for effective employee performance and overall organization success. Structure is a means for attaining the objectives and goals of an institution. Any work on structure must therefore start with objectives and strategy. DETERMINANTS OF ORGANIZATION DESIGN: a) Strategy b) Organization c) Technology d) Environment e) Power-Control f) Age SJBIT/MBA Page3
g) Size THE SIX KEY ELEMENTS THAT MANAGERS NEED TO ADDRESSS WHEN THEY DESIGN THEIR ORGANISATION STRUCTURE ARE: a) Work Specialization: The degree to which tasks in an organization are sub-divided into separate jobs. Work specialization in other words is division of labour. b) Departmentalization: The basis by which jobs are grouped together is called departmentalization. Popular ways to group activities is by functions performed. c) Chain of Command: It is an unbroken line of authority that extends from the top of the organization to the lowest and clarifies who reports to whom. d) Span of Control: The number of sub-ordinates a manager can efficiently and effectively direct. e) Centralization and Decentralization: The degree to which decision making is concentrated at a single point in an organization. f) Formalization: The degree to which jobs within an organization are standardized. Organizational design is engaged when managers develop or change an organization's structure. Organizational Design is a process that involves decisions about the following six key elements: I. Work Specialization Describes the degree to which tasks in an organization are divided into separate jobs. The main idea of this organizational design is that an entire job is not done by one individual. It is broken down into steps, and a different person completes each step. Individual employees specialize in doing part of an activity rather than the entire activity. II. Departmentalization It is the basis by which jobs are grouped together. For instance every organization has its own specific way of classifying and grouping work activities. There are five common forms of departmentalization: 1. Functional Departmentalization. As shown in the Figure 2-1, it groups jobs by functions performed. It can be used in all kinds of organizations; it depends on the goals each of them wants to achieve. Figure 2-1Functional Departmentalization example
SJBIT/MBA
Page4
Different aspects on this type of departmentalization: Positive Aspects Efficiencies from putting together similar specialties and people with common skills, knowledge, and orientations o Coordination within functional area o In-depth specialization
o o
Negative Aspects Poor communication across functional areas o Limited view of organizational goals
2. Product Departmentalization. It groups jobs by product line. Each manager is responsible of an area within the organization depending of his/her specialization Figure 2: Product Departmentalization example Source: Bombardier Annual Report
Different aspects on this type of departmentalization: Positive Aspects

o
Negative Aspects
o
Allows specialization in
Duplication of functions Page5
SJBIT/MBA
particular products and services o Managers can become experts in their industry o Closer to customers
o
Limited view of organizational goals
3. Geographical Departmentalization. It groups jobs on the basis of territory or geography. Figure 2-3: Geographical Departmentalization example
Different aspects on this type of departmentalization: Positive Aspects More effective and efficient handling of specific regional issues that arise o Serve needs of unique geographic markets better
o o o
Negative Aspects Duplication of functions Can feel isolated from other organizational areas
4. Process Departmentalization. It groups on the basis of product or customer flow. Figure 2-4: Process Departmentalization example
SJBIT/MBA
Page6
o
Negative Aspects
o
More efficient flow of work activities
Can only be used with certain types of products
5. Customer Departmentalization. It groups jobs on the basis of common customers Figure 2-5: Customer Departmentalization example

o
Negative Aspects
o o
Customers' needs and problems can be met by specialists
Duplication of functions Limited view of organizational goals
III. Chain of command It is defined as a continuous line of authority that extends from upper organizational levels to the lowest levels and clarifies who reports to whom. There are three important concepts attached to this theory:

Authority: Refers to the rights inherent in a managerial position to tell people what to do and to expect them to do it. Responsibility: The obligation to perform any assigned duties. Unity of command: The management principle that each person should report to only one manager.
IV. Span of Control It is important to a large degree because it determines the number of levels and managers an organization has. Also, determines the number of employees a manager can efficiently and effectively manage. SJBIT/MBA Page7
V. Centralization and Decentralization More Centralization

More Decentralization

Environment is stable Lower-level managers are not as capable or experienced at making decisions as upper-level managers. Lower-level managers do not want to have say in decisions Decisions are significant. Organization is facing a crisis or the risk of company failure. Company is large. Effective implementation of company strategies depends on managers retaining say over what happens.
Environment is complex, uncertain. Lower-level managers are capable and experienced at making decisions. Lower-level managers want a voice in decisions. Decisions are relatively minor. Corporate culture is open to allowing managers to have a say in what happens. Company is geographically dispersed. Effective implementation of company strategies depends on managers having involvement and flexibility to make decisions
VI .Formalization It refers to the degree to which jobs within the organization are standardized and the extent to which employee behavior is guided by rules and procedures.
One of the most comprehensive and rational approach for classifying structures was proposed by Minstzberg(1980-1983). According to him an organization can be seen as composed of five basic parts. They are: a) The Strategic Apex: It consists of the top level management in-charge of the overall organizations. It may consist of a top management team or a single individual. b) The Operating Core: This consists of employees who perform the basic work related to the production of goods and service for which the organization is meant. c) The Middle Line: This consists of the people who connect the strategic apex to the operating core. These are intermediate managers who transmit, control and help in implementing the decisions taken by the strategic apex. d) The Techno structure: This consists of staff functionaries and analysts who design systems for regulating and standardizing the formal planning and control of the work. e) The Support Staff: It consists of people who though not directly involved in the work process provide indirect support to it. Services like cafeteria, mailing, transport etc
SJBIT/MBA
Page8
COMPONENTS OF ORGANISATION DESIGN: For any practicing manager, designing the organization would involve converting his/her understanding of the influences, into tangible organizational structures. An effective structure would be one which can successfully cope with these demands and constraints. But in order to design such an organization, the manager must also be aware of the building blocks of an organization structure. It is necessary therefore, to consider what constitutes the organizational structure. It is still possible to identify some of the significant and empirically verified components of the organization. Even though, the terms used by the researches have varied, there are sufficient overlaps in their decision to make it possible to integrate the findings under three major components: Complexity, Formalization and Centralization. A) COMPLEXITY: Complexity refers to the degree of differentiation that exists within the organization. (Robins 1987) . It focuses on the number of specific jobs, roles, hierarchical levels, work centers, etc, in the organization. The greater the differentiation in the organization, the more complex would be the organization. The more complex an organization, the greater is its need for devising more complex mechanisms for control, coordination and communication. When an organization is not very complex, the activities of its members can be controlled and coordinated through simple mechanisms, such as informal communications and a few rules and procedures etc. With increasing complexity, these simple mechanisms become ineffective. To reduce the uncertainty in decision making, more expensive and sophisticated mechanisms are required by the organization. One finds highly complex organizations using a variety of such control and coordination mechanism, e.g, coordination committees, computerized information system, policy manual etc. Organizations can be complex in three ways: a) Horizontally (the degree of differences in the nature of jobs in the organization.) b) Vertically (the number of hierarchical levels, or the depth in the structure.) c) Spatially (the degree of the geographical separation among the work units.) a) HORIZONTAL COMPLEXITY: Horizontal complexity refers to the degree of differentiation between the organizations units/subunits in terms of the nature of work, requirements of skills and knowledge and employee orientations. Other terms used to describe horizontal complexity in research literature are differentiation, division of labor, departmentation and functional specialization. Horizontal complexity is often an organizations way of coping with increase in the quantum and complexity. They tend to break up their total task into specialized jobs and functions, which are then manned by personnel with specific expertise and skills. b) VERTICAL COMPLEXITY: Vertical complexity refers to the hierarchical levels that exist between the top management and the lowest level operations in the organization. Increase in vertical complexity is often the organizations response to increase in the horizontal complexity. When organizational activities become more and more segmented and specialized, it becomes more difficult for the different organizational subunits. SJBIT/MBA Page9
To understand the part they play in the achievement of the total organization goal. Somebody is required to integrate and coordinate and ensure that the work is being performed according to the plan. This need for supervision and coordination results is increased vertical complexity. If the number of hierarchical levels is more, the problems involved in managing the organization also increase, there is greater potential for distortion of communication across hierarchies, there is greater demand for coordinating the managerial decisions taken at different levels, and the senior levels of management become more distant from the operating core. On the other hand, the flat organizational structures have their own problems, such as more managerial pressures on the executives, lesser promotional opportunities, etc. And whether an organization should opt for a tall or flat organization would depend on a number of factors.
SPAN OF CONTROL: It refers to the number of subordinates with report directly to a superior to facilitate vertical coordination and effective supervision of sub ordinates. The concept of span of control is important because it defines the number of levels in the management. In small or flat organization normally span of control varies from 5 to 25 from top management level to junior management level. FACTORS INFLUENCING / (DETERMINING SPAN OF CONTROL) a) Skills and abilities of the managers and employees. b) Characteristics of the work being done/nature of jobs. c) Training and experience of the work being done/nature of jobs. d) Simplicity of employees tasks. e) Complexity of employees tasks. f) Physical proximity of subordinates. g) Degree to which standardized procedures are in place. h) Sophistication of organizations information system. i) Strength of organizations culture. j) Preferred style of the manager. k) Rate of change of activities and personnel. l) Clarity of instruction and delegation. ADVANTAGES OF LARGE SPAN OF CONTROL 1. Significant reduction in administrative costs. 2. More effective and efficient organization communication. 3. Faster decisions and closer interaction. 4. Recruitment such that all personnel become a better trained, informed and educated. 5. Better leadership at all levels. LINE AND STAFF RELATIONSHIPS: 1. Line relationships are superior-subordinate. Relationships can be traced in a chain of command. 2. Staff relationship are advisory in nature and types are a) Providing advice only on request. b) Recommending where staff office deems appropriate. SJBIT/MBA Page10
c) Consulting authority Line managers must consult staff in that area. d) Concurring authority Staff having a veto authority over the line manager. e) Promotion between line and staff is a worldwide phenomena and normally get settled as director. f) Senior management level for decisions to meet organizational goals / requirements. g) Nature of manufacturing processes and size of organization have considerable influence in organizational design, especially relating to method of manufacturing, and communication. Comparison of Tall and Flat Organizational Structures Tall Organization Structure (Narrow span of control) Needed when: Closer control and monitoring is required. Mistakes are likely to be costly. Tasks/roles are clear; require specialization. Routine technology. Inexperienced subordinates. Placid, stable environment. Dysfunctional consequences: Discourages initiative, encourages centralization. Bottlenecks, distortion of vertical communication. Slow promotion. Flat Organizational Structure (Wide span of control) More autonomy and self control is required. Flexibility and innovation is required. Ambiguous tasks and roles; specialization doesnt work. Non-routine technology. Experienced subordinates. Unstable, turbulent environment. Lack of proper control; encourages laissezfaire. Too much demand on the manager for coordinating. Reduced promotional opportunities.
c) SPATIAL COMPLEXITY: Spatial complexity refers to the degree to which the subunits and personnel of an organization are geographically separated. An organization may continue to have the same number of occupational roles and departments (horizontal complexity) and hierarchical levels (vertical complexity), but if it decides to geographically separate its activities, this would introduce additional requirements for control and coordination of these activities. These requirements arise out of increased spatial complexity. Many organizations cope with the spatial complexity by having their own corporate service, wireless system or hotlines. The advent of more efficient telecommunication systems and computer technology has also helped the organizations to overcome the problems of communication and coordination. The use of such corporate mechanisms however does not mean that the complexity induced by spatial separation can be eliminated. Rather, in devising methods to counter spatial complexity, organizations become more and more complex (e.g.. a new department would have to be setup to look after the courier service.) B) FORMALISATION SJBIT/MBA Page11
Formalization refers to the degree to which jobs in an organization are standardized. Greater formalization would reduce the employees discretion in dealing with their work. By introducing detailed rules, meticulous work-procedures and clear job descriptions, organizations ensure that any input is handled in a standard manner so as to produce a uniform output. On the other hand, less formalization would mean that the jobs are less programmed and provide sufficient discretion to the employees to exercise choices in dealing with their work.
There can be various reasons for an organization to introduce formalization: a) Formalization of jobs reduces the availability of outputs. By protecting the output from human and incidental variations, the organizations can ensure that its quality standards are maintained. As mentioned earlier, in most pharmaceutical companies, the sales presentation made by the medical representatives to the doctors is standardized to the extent of sales talk and even the gestures and intonations. This ensures that the representative is able to effectively communicate maximum information about the products to the doctors within the short appointment time. b) Formalisation is one way of dealing with the complexity of management problems. If the work-process involves a number of specialized, but interdependent jobs, the need to coordinate these activities also increases. For example, a typical assembly line consists of a number of specialized operations which are linked with each other serially. By formalising the activities for each work-centre on the assembly line, the organization achieves coordination among these activities. c) Formalisation reduces the need for direct supervision and control. This helps by ensuring more time available to the manager for other planning and problem solving activities. Once the specific jobs/activities have been standardized the manager need not get directly involved in routine supervisory activities, these can safely delegate down the line. Thus, formalisation leads to more efficient use of the managers time. d) By reducing the discretions in doing the job, formalisation also reduces the chance of mistakes occurring in the execution of the job. Mistakes, after all, means loss of money. e) Lastly, the greater the discretion in the performance of the job, the greater would be the need for exercising a judgment by the incumbent. Obviously, a job which entails a greater professional judgment would cost the organization much more in terms of the employees salaries, perks, benefits, etc. For example, if the job is to recruit and organize a work-force for maintaining a newly commissioned plant, without any formal guidelines whatsoever, finding the right incumbent might cost the organization a lot of money. On the other hand, if there are comprehensive guidelines for recruitment policies and procedures, this job can be handled by a less experienced person-naturally, at a lesser salary. Table: Comparison of Organizational and Professional Formalisation Organizational Formalization Professional Formalization Usually achieved through rules, procedures, Usually achieved through years of professional job-descriptions, etc. training.
SJBIT/MBA
Page12
Focuses primarily on molding the external Focuses primarily on the internal attitudes and behavior of the individual. orientations of the person. Based on extrinsic rewards and punishments. Most often used for routine, unskilled work. Based on internalized values and socialization. Most often used for skilled, non-routine work.
Formalization Techniques a) Selection and Recruitment: The hiring practice adopted by the organizations is one of the most widely used method for controlling discretion and formalizing employee behavior. Organizations select their employees on the basis of certain well defined criteria. Besides assuring themselves that the person has the technical skills and qualifications. Organizations also assess the candidate through interviews, group discussions, background investigations, etc. to check how well the person will fit into the organization. The person is screened for his attitude, manners, work and social habits, even dress appearance. b) Role/Job Description: The specification with which the jobs are defined in the organization plays a crucial role in regulating employee behavior. Organizations make a considerable effort to create job descriptions which spell out the dos and donts of any job. These role definitions not only describe what the job entails, but often also how the activities required for the job are to be performed. c) Rules and Procedures: Rules and procedures constitute a detailed program for guiding, molding and regulating the employee can or cannot do, whereas the procedures explicitly describe the sequence of behaviors an employee must go through to get anything accomplished within the organization. It is important to note that organizations have rules and procedures, not only for organizational work, but also for issues relating to the employees personal life. d) Training: One of the most widely accepted methods adopted by the organizations to instill desired behavior patterns among their employees is through conducting training programs. Many organizations except their freshly inducted employees to go undergo an induction program before allocating specific work assignments. This involves familiarizing them with the companys philosophy, history, procedures, personnel policies, etc. Such an induction program aims at communicating the opportunities as well as the constraints which an employee can expect to encounter while working for the company. C) CENTRALISATION The third building block of organizational design is the level of centralization (or decentralization) in decision making. Centralization/Decentralization is an important dimension of organizational effectiveness, since it refers directly to how appropriately and swiftly the organization is able to deal with critical issues and arrive at relevant decisions. Hage defined this dimension as the proportion of jobs whose occupants participate in decision making and the number of areas in which this participation takes place. Similarly, SJBIT/MBA Page13
Reimann described centralization as reflecting the locus of decision making, with respect to major and specific policies, the degree of information sharing between levels, and the degree of participation in long-range planning..
Relative Advantages and Disadvantages of Centralization and Decentralization
Centralization Advantages:
Decentralization Advantages:
Uniformity of policies, standards and Greater flexibility and appropriateness in actions. responding to local situations. Enables closer control and coordination. Allows top management to focus on policy issues.
Maximizes economies eliminates duplication.
of
scale; Facilitates intra-unit communication.
Reduces risk-factor in decision making Increases morale and commitment. by less informed or less skilled Creates healthy competition among units. subordinates. Disadvantages: Causes alienation and lack of initiative. Disadvantages: Causes conflicts of goals and interests among units.
Inappropriate requirements. `
response
to
local Loss of economies of scales; duplication of efforts.
IMPORTANCE OF SOUND ORGANISATION SJBIT/MBA Page14
i) Division of work: Specialization-individuals to develop better capabilities and better resource utility. (ii) Facilitates administration: Avoids overlapping of work Duplication of effort. (iii) Permits optimum use of resources. (iv) Simulates creativity, delegation of authority helps junior levels to do more challenging works. (v) Facilitates coordination among different working groups, units or departments. division of work, administration, optimization, simulation, coordination.
ORGANISATIONAL THEORY: Organizational theory is the study of how organization function and how they are affected by the environment in which they operate. Organisation theory is concerned with organizational structure i.e. how to design an organization structure that ensures firms effectiveness. Organisation theory is the subject concerned with understanding, explaining and predicting how best to design the best structure for an organization to fulfill its objectives/goals. Organisation theory is asset of rules developed by organizational experts to help managers reorganize their companies effectively. Knowledge of organizational theory enables managers to analyze the structure and culture of their organization, diagnose problems and utilize the process of organization design, make changes in the structure and culture that help the organization to achieve its goals. EVOLUTION OF ORGANIZATION THEORY: The current state of organization theory is the result of an evolutionary process. Over a period of many decades many academics and practitioners from diverse backgrounds and with diverse perspectives have studied and analyzed organizations. Theorists have been introduced, evaluated and refined over time. New insights tend to reflect the limitations of early theories. It has been suggested that there are two underlying dimensions in the evolution of organization theory and that each dimension in turn has opposed perspectives. The first dimension reflects that organizations are open systems. The second dimension deals with the ends of organisational structure. Here again are two opposed positions. The rational perspective argues that the structure of an organization is conceived as a vehicle to effectively achieve specified goals and objectives. In contrast, the social perspective emphasizes that structure is primarily the result of the conflicting forces by the organizations constituents who seek power and control. Therefore the result is four theoretical classifications. Type- I Theorists: Known as classical school, developed universal principles or models that would apply in all situations. Essentially organizations perceived as closed systems. Created to achieve goals efficiently. Ends perspective is rational and central theme being Mechanical efficiency. Type II Theorists: Is the recognition of Social Nature of organization forming people and Human relations school, organization is made up of task & people and the system perspective is closed. Organizations were no well oiled and were perfectly predictable machines. Management SJBIT/MBA Page15
could not design formal relationships, rules and the like but there were informal patterns of communication, status, norms, and friendships created to meet social needs of organization member. Type III Theorists: A contingency approach by providing gained momentum in 1960s & 1975. Its system perspective is closed and the end perspective being rational. Theorists saw organizations as the vehicle for achieving the goals. They concentrated on size, technology and environmental uncertainty as the major contingency variables that determined what the right structure for an organization should be. The theorists argued that properly aligning structure to its contingency variables would facilitate the achievement of the organizational goals. Type- IV Theorists: Most recent theorists approach focuses on the political nature of organizations extensively refined by Jeffery Prefer. Its system perspective is open, ends perspective being social and central theme being power and politics. The result is not the rational effort by managers to create the most effective structure but rather outcome of the political struggles among coalitions within the organization for control. EVOLUTION OF ORGANISATION THEORY Type I Theorists Classical school Organizations Perceived as closed systems created to achieve goals. FREDRIC WINSLOW TAYLORS Principles Of Scientific Management 1911- Published principles of scientific management to improve productivity .He proposed four principles of scientific management to enhance productivity a) To replace rule-of-thumb methods with scientific methods for determining each element of a workers job. b) Scientific selection and training of workers. c) Co-operation of management and labor to accomplish work objectives as per scientific methods. d) More equal division of responsibility between managers and workers planning & supervising by mangers. Created fundamentals of todays industrial engineering emphasis on best way of doing a job selection training and motivate workers. HENRY FAYOL and Principles of Organization: Based on years of experience as practicing executive Fayol wrote 14 principles which are followed by mangers even now. a) Division of work: Specialization increases the operations by making employees more efficient. b) Authority: Giving orders. Whenever authority is exercised responsibility arises. c) Discipline: Employees need to obey and respect the rules of the organization. d) Unity of Command: Should receive orders from only one superior. e) Unity of direction: Each groups activities is guided by one objective. f) Subordination of individuals interests to the general interest. g) Remuneration: Fair wage policy h) Centralization: i) Scalar chain: The line of authority from top management to the lowest ranks. SJBIT/MBA Page16
j) k) l) m) n) Order People & Material. Equity : Fair to subordinates. Stability of tenure of personal: High employee turnover is inefficiency. Initiative: Esprit de corps: Team spirit for unity and harmony within the organization.
MAX WEBER AND BUREAUCRACY Ideal type organization structure proposed by German sociologist writing in the beginning of 20th century, proposed a structural model a most efficient means by which organizations can achieve their hands/success through BUREAOCRACY. It was characterized by division of labor, clear authority hierarchy, formal selection procedure, detailed rules and regulations and interpersonal relationships. Webbers description became the design prototype for the structure of most of todays large organizations. RALPH DAVIS & RATIONAL PLANNING Rational planning perspective which proposed that structure was the logical outcome of Organizations objectives expressed in this work. None can survive if it does not provide economic value generated by activities of members who create organizations and services. Activities link the objectives to its results. Managements job is to group these activities together in such way as to form structure of organization. The structure of the organization is contingent upon the organisational objectives. EVOLUTION OF ORGANISATION THEORY Type II theorists: Recognition of social nature of organization. These theorists referred to as forming the humanrelations school. Views organizations as made up of both tasks and people. ELTON MAYO AND HAWTHORNE STUDIES: On human behavior/productivity by varying illumination levels on worker productivity. (1) Test group with varying intensity of illumination. (2) Control group with constant illumination intensity at Western electric co. First phase: 1924-27: To their surprise they found that as the light level was increased in the experimental group, output rose for each group. As the light level was dropped in the experimental group, productivity continued to increase in both. In fact, a productivity decrease was observed in the experimental group only when the light intensity had been reduced to that of moonlight. The engineers concluded that illumination intensity clearly was not directly related to group productivity, but they couldnt observe the behavior they expected. Engineers expected that individual output to be directly related to the intensity of the light. Second Phase: 1927-32:
SJBIT/MBA
Page17
Women employees with more hours of rest periods, change of snacks serving, shorter work days, no working on Saturdays all these resulted in the increase in production and absenteeism reduced. III phase 12 weeks experiment: Study on a group of wiremen, soldering man, inspectors assembling terminal banks used in telephone exchange. Result: esprit de corps. A pride of working in a particular group was established. Knowledge added to art of management and leadership and human motivation. Managers to include in organization design work groups, employee attitudes and managers employee relationship of management and organization theory. Conclusion: It is generally agreed upon by management scholars that the Hawthorne studies had a dramatic impact on the direction of management and organization theory. It ushered an era of organization humanism. Managers would no longer consider the issue of organization design without including effects on work groups, employee attitudes and manager-employee relationships. CHESTER BARNARD AND CO-OPERATIVE SYSTEM: Merging the ideas of Taylor, Fayol and Weber with results from Hawthorne studies led to the conclusion that organizations are co-operative system. They are composed of tasks and people that have to maintain an equilibrium state. The notion that an organization is a cooperative system is generally credited to Chester Barnard. He presented his ideas in The Function of the Executive, in which he drew years of experience with American Telephone and Telegraph, including the presidency of New Jersey Bell. In addition to being one of the first to treat organizations as systems, Barnard also offered other important insights. He challenged the classical view that authority flowed from the top down by arguing that authority should be defined in terms of the response of the subordinate, he introduced the role of the informal organization to organization theory and he proposed that the managers major roles were to facilitate communication and to simulate subordinates to higher levels of effort. DOUGLAS MCGREGOR AND THEORY -X AND THEORY- Y: There are two distinct human beings. One basically negative-Theory X and the other basically positive-Theory Y. After reviewing the way managers dealt with employees, Mc Gregor concluded that a managers view of the nature of human beings is based on a certain grouping of assumptions and that he or she tends to mold his or her group behavior toward subordinates according to these assumptions. Under Theory X, four assumptions are held by managers: a) Employees inherently dislike work and whenever possible will attempt to avoid it. b) Since employees dislike work they must be coerced controlled or threatened with punishment to achieve desired goals. c) Employees will shirk responsibilities and seek formal direction whenever possible. d) Most workers place security above all other factors associated with work will display little ambition.
SJBIT/MBA
Page18
In contrast to these negative views of human beings, Mc Gregor listed four other assumptions that he called Theory Y: a) Employees can view work as being as natural as rest or play. b) Human beings will exercise self-direction and self-control if they are committed to objectives. c) The average person can learn to accept and even seek responsibility. d) Creativity-That is, the ability to make good decisions is widely dispersed throughout the population and is not necessarily the sole province of those in managerial functions. Mc Gregor argued that theory Y assumptions were preferable and that they should guide managers in the way they designed their organizations and motivated their employees. Much of the enthusiasm, beginning in the 1960s for participative decision making, the creation of responsible and challenging jobs for employees, and developing good relations can be traced to Mc Gregors advocacy that managers follow theory Y assumptions. WARREN BENNIS BUREAUCRACY: He claimed that bureaucracys centralized decision making, impersonal submission to authority and narrow division of labor was being replaced by decentralized and democratic structures organized around flexible groups. Influence based on authority was giving way to influence derived from expertise. In the same way Weber argued the other extreme conditions and pointed out that flexible adhocracies as the ideal organisational form. In few years we had essentially moved from one extreme position to another. EVOLUTION OF ORGANIZATION THEORY Type- III Theories Contingency Approach Conflict between thesis and antithesis led to synthesis that provided better guidance to managers that synthesis was a contingency approach. Theorists saw organizations as the vehicle for achieving the goals. They concentrated on size, technology and environmental uncertainty as the major contingency variables that determined what the right structure for an organization should be. The theorists argued that properly aligning structure to its contingency variables would facilitate the achievement of the organizational goals. HERBERT SIMON AND PRINCIPLES OF BAKLASH Contingency movement gained momentum in 1960s. However, Simon recognized in 1940 that type I principles would have to give way to contingency approach it took 20 years for organization theorists to respond to Simons challenge. He argued that organization theory needed beyond superficial oversimplified principles to a study of conditions under which competing principles were applicable. KATZ KAHNS ENVIRONMENTAL PERSPECTIVE: Daniel Katz and Robert Kahns Book The Social Psychology Of Organizations. was a major impetus towards promoting type III open- systems perspective to organization theory. Their book provided a convincing description of advantages of relations of an organization with its environment and the need for organization theory would be complete without a thorough assessment of environment as a major contingency factor influencing preferred form of structure. CASE FOR TECHNOLOGY: SJBIT/MBA Page19
Research in 1960s Joan Woodward, Charles Perrrow, as with environment no contemporary discussion of organization theory would be complete without consideration of technology and the need for managers to match structure with technology. THE ASTON GROUP AND ORGANISATION SIZE: University of Aston in Great Britain advocates that organization size as an important factor influencing structure. Large organizations have been shown to have many common structural components. So, too have small organizations. May be most important evidence suggests that certain of these components follow an established pattern as organizations expand in size. Such evidence has proven valuable to managers in helping them make organization-design decisions as their organizations grew. EVOLUTION OF ORGANISATION THEORY: Type-IV Theorists- focuses on political nature of organizations: Early formation by James March Herbert Simon extensively refined by Jeffery Pfeffer, and March & Simons Cognitive limits to rationally challenged classical notion of rational or optimum decision states that most decision makers selected satisfactory alternatives that were good enough and only on exceptional cases they were concerned with discovery and selection of optimal alternatives. Their revised model would recognize the limits of a decision makers rationality and acknowledge the presence of conflicting goals. PFEFFERS ORGANISATIONS AS POLITICAL ARENAS Built on March & Simons work, to create a model of organization theory that encompasses power coalition and inherent conflict over goals, states that organizational design decisions favor the self interest of those in power. a) Proposes that control in organizations becomes an efficient production of output. b) Organizations are coalitions composed of varying group and individuals with different demands. c) An organizations design represents the result of the power starless by these diverse coalitions. d) It establishes the need to assess the preferences of industry interests of those in the organization who have influence over the design decisions. This view is currently very much in vogue. MARCH AND SIMONS COGNITIVE LIMITS OF RATIONALITY: They challenged the classical notion of rational or optimum decisions. They argued that most decision makers selected satisfactory alternatives. Alternatives that were good enough. They called for a revised model of organization theory-one very different from the rational cooperative-systems view. This revised model would recognize the limits of a decision makers rationality and acknowledge the presence of conflicting goals. Summary: The current state of organization theory fully reflects the contributions of Type 3 , Type 4 theorists. Contingency advocates have taken the insights provided by earlier theorists and reframed them in a situational context. The contingency view, in addition to understanding the point in identifying those contingency variables that are most important for determining SJBIT/MBA Page20
structure. The political perspective taken by the type 4 theorists, which was built on knowledge of behavioral decision making and political science, has significantly improved our ability to explain organizational phenomena that contingency advocates rational decisions and assumptions are over looked. IMAGES OF ORGANISATION: To infuse the process of organization with a spirit of imagination that takes us beyond bureaucratic boxes. Imagination is a process through which organizations and people can form new images of self. Diversity of perspectives is not only characteristics of the Laymen, but also of the researchers and organisational theorists. Theories and conceptualizations, explaining the realities of organization, have also used a variety of Paradigms and Metaphors to capture the essence of how organizations function. Morgan(1986), Organizations are complex and complicate realities as they are far from a united whole and doesnt convey a common meaning to everyone. The complexity in organizations allows people to interpret the organization reality in ways convenient to them. Such diversity of perspectives is not only characteristics of the laymen but also of the researchers and organization theorists. MORGAN: It is possible to gain insight into how an organization operates and what it will take to change it. Imagination is a way of thinking, a way of organizing, a way of doing. It is more of a mindset & a capacity than a technique. Morgans imagination definition in 5 ways. a) Imagination is about our abilities to see and understand situations in new ways. b) Recognize different dimension of organizational life, finding resonant images to make sensible things and shape appropriate actions. c) Imagination is about new images for new ways of organizing: to get beyond existing organization structures. to imagine and explore creative possibilities, to see and read organizational situations with fresh perspectives. d) Imagination is also about creation of shared understanding, it is about generating essence of shared vision and values that will help mobilized efforts in a common direct ability to invent images to meet current challenges to help motivate and mobilize people achieve desired goals. e) Imagination is about personal empowerment to avoid locking one-self in to appropriate modes of behavior. f) Imagination is about developing capacities for continuous self organization. Providing source of creative energy to enhance and sustain capacities for continuous improvement in organizations so that we can adopt and evolve as we go along. Imagination is the art of creative management and metaphors to view organization as machines, brain, culture, political, formation, psychic prisons. The following are some of the prominent images of organization which recur across the literature on organisational theory:
SJBIT/MBA
Page21
A) Organization as Machines: Organizations are built around systems and procedures which create conditions of efficiency and reliability of performance. Fixed working hours, production schedule, maintenance schedules, financial control system, sales targets, and code of conduct, clear job descriptions are all natural corollaries of viewing the organization as machines. The aim of these efforts is to routine the activities and reduces uncertainty of operations. Ex: Pharmaceuticals companies train their medical representatives announcements made by airhostesses. Even economists Adam Smith in his book, the wealth of Nations noted that division of labor, relying on breaking the total task into small specialized units helped in increasing efficiency by replacing the discretion of workers with controls exerted by supervisors. Weber also noted that bureaucracy helped in routinising the administrative process in the same way as machines standardized the manufacturing process. Webers principle of bureaucracy stated that division of labour, well defined authority and hierarchy, high formalization, employment direction based on merit were important in achieving goals. B) Organization as Living Systems: Burns and Stalker found that regimented and bureaucratic organizational structures were primarily useful in dealing with regulated and predictable environments. But in an unstable and complex environment, organization need to develop more loose and flexible structures to cope with adaptive demands. Their findings also highlighted a crucial aspect of organization functioning which was altogether ignored in the machine image of organization i.e the important interface between the organization and their environment. This characteristic of adapting to the environment also makes organization similar to living systems. In fact, not only does the organization interact with the environment but they also undergo the phenomenon of growth, maturity and decline. Katz and Kahn defined organization as an open system. Organization is influenced by the environment. This commerce between the organization and its environment is not only confined to the inputs (men, machine, material) and output (service, products) but changes in the environment also determines the corresponding changes in the organization strategy, structure and system. Since organization resembles living beings, they also grew and matured like living beings, that is they show a predictable sequence of growth. Organization do grow in a predictable sequential manner, by no means is this pattern invariant in all cases. Unlike human beings, organization rarely dies and disintegrates. Even when they go into decline, they have a remarkable ability to survive. They renew themselves and make a comeback. C) Organization as Brains: We have seen that organizations are not merely reactive entities which passively adapt to the environmental demands. They are also proactive in their stance. They consciously plan their strategies and internal design. This means that the changes in the organization strategies, structure and systems do not occur automatically in response to the external environment but it depends on the manner in which the organization receive process and act upon the information emanating from internal and external environment. SJBIT/MBA Page22
This ability of organization to anticipate and plan for a non-existent (though future) requirement makes them similar to complex information processing systems which are capable of problemsolving learning and innovating. For any problem faced by an employee, he/she can refer to the books or consult a senior official to find a solution. But often (particularly in a fast changing business environment), the nature and number of these exceptions increases much beyond the problem solving capacity of the existing rules, hierarchies and managerial processes (something similar, incidentally also happens to human brain under conditions of stress). In such a situation, D) Organizations as Political Systems: The criteria for taking decisions in the meetings are far from rational. They are equally influenced by the specific personalities and relationships of the decision makers. It tells us that within the complex reality of the organization decisions are not just solely determined by the logic of optimization, but also by the existing power-equations among the organization members. Politics refer to the flow of power and influences within a social system. Organization with their built-in-hierarchy and authority relationships, are naturally open to political processes. Organization are political systems because, a) Members enjoy power from various sources( due to position, expertise, group support, seniority etc) which help them in influencing each other. b) By virtue of their role, certain people/ departments are more important for achieving organisational goals as compared to others. c) Lastly, any viable decisions need to satisfy three kinds of goals: Corporate goal, departmental goal and individual goal. These three in most situations are not congruent with each other and therefore, call for political skills from the decision maker. Mayes and Allen defined Organisation politics as the management organization influences to obtain ends not sanctioned by the organization or to obtain sanctioned ends through nonsanctioned influence means. E) Organization as Cultures: Culture is the totality of socially transmitted behavior patterns, arts, beliefs, institutions and all other products of human work and thought characteristic of a community or population. In other words, the way we do things around here. The significance of organization culture in determining organization effectiveness has been highlighted by a number of studies. Peters and waterman observed that successful companys were characterized by strong cultures. Organizations that had core values are intensely cherished, clearly stated and widely shared among employees. Viewing, organization has some cultural systems has some significant implications: a) It means that managing is more than mere formal process of planning, directing, controlling and co-coordinating. b) It helps in focusing on the significant roles of basis human processes (motivation, perception and leadership.) c) It makes our understanding in regarding to the nature of organizational change and adaptation. d) It provides an insight into crucial interface between organizational and societal culture. F) Organization as Psychic Prisons:
SJBIT/MBA
Page23
The white collar crime quotes the first hand experience of a young man who got into business of selling used cars: He learned that this business had more tricks for fleeing customers than any other he had tried previously. Cars with everything wrong were sold as guaranteed when the customers returned and demanded his guarantee, he had to sue to get it and very few went to that trouble and expense. The boss said you could depend on human nature. The thing that struck him as strange was that all those people were proud of their ability to flee customers. They boasted of their crookedness and were admired by their friends and enemies in proportion to their ability to get away with a crooked deal, it was called shrewdness. Another feature was that all these people were unanimous in the denunciation of gangsters, robbers, burglars and petty thieves. They never regarded themselves to be in the same class and were bitterly indigent if accused of dishonesty because for them it was just good business. Only one has to think about the bridges which collapse due to adulterated cement, spurious killer drugs etc. What is striking in these everyday happenings is that people involved in committing such ignoble deeds are otherwise respectable, mentally healthy and normal persons. Of course, not all organizations promote and perpetuate pathological behaviors. Pathology in organization as in human psyche occurs when the system becomes out of tune with the demands of the objective of reality. The greater the flexibility and responsiveness of an organization, the lesser are the chances of its trapping itself and its members into pathological patterns. One can say that the whole purpose of understanding organization is to develop working environments which are more humane, healthy and flexible. ORGANISATIONAL EFFECTIVENESS It is the degree to which an organization realizes its goals. Organizational effectiveness can be defined as the degree to which an organization attains its Short (ends) and long term (Means) goals. The selection of (goals) which reflects strategic constituencies, self interest of the evaluator, and the life stage of the organization. CRITERIA FOR ORGANISATIONAL EFFECTIVENESS: a) Overall effectiveness b) Productivity c) Efficiency d) Profit e) Quality f) Accidents g) Growth h) Absenteeism i) Turnover j) Job satisfaction k) Motivation l) Morale m) Conflict/cohesion n) Flexibility/adaptation o) Planning and goal setting p) Control SJBIT/MBA Page24
q) Goal consensus r) Internalization of organization goals s) Role and norm congruence t) Managerial interpersonal skills u) Managerial interpersonal skills v) Information management & communication w) Readiness (Response) x) Utilization of environment y) Evaluations by external entities z) Stability aa) Value of human resources bb) Participation and shared influence cc) Training and development emphasis dd) Achievement emphasis. Organization Effectiveness requires multiple criteria, that differentiate organizational function. It has to be evaluated using different characteristics and that Organisational Effectiveness must consider both means (process) and ends. IMPORTANT ASPECTS OF ORGANISATIONAL EFFECTIVENESS ARE: (i) Ability to adapt to changing environment. (ii) Productivity (iii) Job satisfaction (iv) Profitability (v) Acquisition of scarce and valued resources. PROCESS OF ACHIEVING ORGANISATIONAL EFFECTIVENESS INVOLVES FIVE STEPS: (i) Acquiring resources needed from the environment. (ii) Combining them with an efficient and productive transformation process. (iii) Facilitating and attainment of organization goals. (iv) Making it easier to acquire future resources. (v) Satisfying the strategic constituent in the environment If managers can identify were they want their organization to be and relative to other parts of their environment and also deals how best to get there, have a good chance of achieving organizational effectiveness. APPROACHES TO ORGANISATIONAL EFFECTIVENESS: a) THE GOAL ATTAINMENT APPROACH An organization is, by definition, created deliberately to achieve one or more specialized goals. It should come as no surprise then to find that goal attainment is probably the most used criterion of effectiveness. The goal-attainment approach states that an organizations effectiveness must be appraised in terms of accomplishment of ends rather than means. It is the bottom line that counts. Popular goal attainment criteria include profit maximization, bringing the enemy to surrender, winning the basketball game, restoring patients to good health, and so forth. Their common denominator is that they consider the ends to which the organization was created to achieve. SJBIT/MBA Page25
Assumption: Assumes that organizations are, (i) Deliberate, rational and goal seeking entities and ii) Organization must have ultimate goals. (iii)These goals must be identified, defined, well enough to be understood. (iv)Goals must be few enough to be manageable (v) There must be general consensus/agreement on goals. (vi) Progress towards goals must be measurable. b) THE SYSTEMS APPROACH Organizations acquire inputs, engage in the transformation processes, and generate outputs. It has been argued that defining OE solely in terms of goal attainment results in only a partial measure of effectiveness. Goals focus on outputs. But an organization should be judged on its ability acquire inputs, process these inputs, channel the outputs and maintain stability and balance. Another way to look at OE, therefore, is through a systems approach. In the systems approach, end goals are not ignored, but they is only one element in a more complex set of criteria. Systems model emphasize criteria that will increase the long term survival of the organization-such as the organizations ability to acquire resources, maintain itself internally as a social organism and interact successfully with its external environment. So the systems approach focuses not much on such specific ends but also the means needed for the achievement of those ends. Assumptions: Assumes that organizations, a) Are interrelated sub parts and any one sub parts poor performance will negatively affect whole system. b) Require awareness and successful interaction with environment constituencies. c) Also mgmt to have good relationship with, customers, suppliers, Govt. agencies, union and other powers. d) Requires replenishment of men, material etc. c) THE STRATEGIC-CONSTITUENCIES APPROACH A more recent perspective on OE is the strategic constituencies approach proposes that an effective organization is one that satisfies the demands of those constituencies in its environment from whom it requires support for its continued existence. This approach is similar to the systems view, yet it has a different emphasis. Both consider interdependencies, but the strategicconstituencies view is not concerned with the organizations entire environment. It seeks to appease only those in the environment who can threaten the organizations survival. In this context, most public universities must consider effectiveness in terms of acquiring students but need not be concerned with the potential employers of their graduates. Why? Because the survival of these universities is not influenced by whether their graduates get job. On the other hand, private universities, which charge considerably more than their public counterparts, do spend a great deal of time and money in attempting to place their graduates. When parents spend fifty thousand dollars or more to get their son or daughter a bachelors degree, they expect it to lead to a job or acceptance in a good graduate school. If this does not occur, it will be increasingly difficult for the private school to get freshmen applications. The converse of this the universitys relation with the legislature in the state within which it operates. Public institutions devote considerable efforts to wooing state legislatures. Failure to have their cooperation is sure to have adverse budget effects on the public university. The private SJBIT/MBA Page26
universitys effectiveness, in contrast, is little affected by whether or not it has favorable relationship with the key people in the state capital. Assumption: Assumes that Organizations are, Adaptable to the environment, customer of society, clients and employees respectively. Making it operative: Members have to identify the constituencies they consider to be critical to the organizations survival. This input can be combined and synthesized to arrive at a typical of criteria of selected strategic constituencies. d) THE COMPETING VALUES APPROACH: The main theme underlying the competing values approach is that criteria you value and use in assessing an organizations effectiveness, it may be, return on investment, market share, new product innovation, job security etc depends on who you are and the interests you represent. It is not surprising that stockholders, unions, suppliers, management or internal specialists, marketing personnel, production or accounting may look at the same organization but evaluate its effectiveness entirely different. MAKING COMPETING VALUES OPERATIVE: a) Flexibility Vs control two incompatible dimension of organization structure. (Flexibility favors -Values, Innovation and Adaptation whereas control favors- Stability, order and predictability.) b) People & organization well being. Which is to be given more importance? c) Means and ends. (Means-Streaming in organizations long-run) (Ends-Final outcome) These three values can be depicted to form a three dimension diagram Figure- A Three Dimensional Model Of Organizational Effectiveness.
Flexibility Means
People Ends
Organization
Control
SJBIT/MBA
Page27
These values can further be combined to form eight cells or sets of Organisational Effectiveness: Table- Eight OE Criteria Cells CELLS OFM OFE OCM OCE PCM DESCRIPTION Flexibility Acquisition of resources Planning Productivity and efficiency Availability of information Definition Able to adjust well to shifts in external conditions and demands. Able to increase external support and expand size of work force. Goals are clear and well understood. Volume output is high; ratio output to input is high. Channels of communication facilitate informing people about things that affect their work. Sense of order, continuity, and smooth functioning of operations. Employees trust, respect and work well with each other. Employees have the training, skills and capacity to do their work properly.
PCE PFM PFE
Stability Cohesive work force Skilled work force
We can begin to combine the eight cells into some distinct models/four definition of organisational effectiveness: Human Relations Model: It defines OE in terms of cohesive (as means) and skilled (as ends) work force. Open- System Model: OE in this model is defined in terms of flexibility (as means) and the ability to acquire resources (as ends). Rational-Goal Model: The existence of specific plan and goals (as means) and high productivity and efficiency (as ends) is used as evidence of effectiveness. Internal Process Model: It emphasizes people and control and structure adequate dissemination of information (as means) and stability and order (as ends) in the assessment of effectiveness.
SJBIT/MBA
Page28
SJBIT/MBA
Page29
Conclusion: Approach 1. Goal Attainment 2. Systems When useful The approach is preferred when goals are cleat, time build & measurable A clear connection exists between inputs / outputs 3. Strategic All strategic constituencies are at least Constituencies have powerful Constituencies mini mall satisfied. influence on the organization & the organization and the organization to respond to demands. 4. Competing The emphasis of the organization in the Organization is unclear about its own values four major areas matches constituent emphasis, or changes in criteria over preferences. the time are of interest. Organization effectiveness is considered as central theme in organization theory, its meaning and measurement to be confirmed. Goal attainment and systems approaches are dominant ones. Focus on accomplishment focus on accomplishment of ends. Strategic constituencies is a more recent offering focus on the ability to locate those individuals, groups and institutions upon which organization depends for its continued operation. The final one being competing values which has sought synthesize OE criteria into four models, each of which is based on a given set of values and each of which additionally is preferred depending on where an organization is in its life cycle. Definition An organization is effective to the extent that it accomplishes its stated goals. It acquires needed resources.
---------------------------------------*******************----------------------------------------
SJBIT/MBA
Page30
MODULE 2 Organization Design: Approaches to organizational design Organizational designs for different excellences. - Competitive excellence Institutionalized excellence - Rejuvenatory excellence - Missionary excellence Versatile excellence - Creative excellence - External nurturance of organizational excellence : The role of super system in promoting excellence - The role of domain influencing institutions in promoting excellence- The role of the government in promoting organizational excellence. INTRODUCTION: Some economists and politicians have spoken of three worlds. First world consisting of the wealthy, economically highly developed capitalists countries, mostly Western, the Second world of Soviet Union dominated East European communist countries mostly located in South America, Africa and Asia. Such is the pace of socio-political change in the second world that in a decade or less it may disintegrate completely, with the bulk merging into the First World and the remainder into the Third world. Eventually there may be just the First World, with perhaps a third of the human population and over 80% of its income and the third world with two thirds population and a fifth or less income. The Third world is of course immensely varied. In 1983 the World Bank listed 73 countries with per capita annual incomes below $1700.Their combined population was about 3000 million. They included nations like China and India. Despite the diversity in size, cultures and government systems, these nations of the third world share a few characteristics which must be borne in mind when designing their organizations. They are, poverty, inequality, statism, transition from traditionalism to modernity. ORGANISATIONAL DESIGN: It is the overall set of structural elements and the relationships among those elements used to manage the total organization as a whole. It involves designing the organization structure by developing, changing etc. Organization design is concerned with making decisions about the forms of coordination, control and motivation that best fit the enterprise. In making these decisions, it is necessary to consider external factors like the market and internal factors like the needs and aspirations of the member of the enterprise. FIVE APPROACHES TO ORGANIZATIONAL DESIGN Managers must make choices about how to group people together to perform their work. Five common approaches functional, divisional, matrix, team, and networkinghelp managers determine departmental groupings (grouping of positions into departments). The five structures are basic organizational structures, which are then adapted to an organization's needs. All five approaches combine varying elements of mechanistic and organic structures. For example, the organizational design trend today incorporates a minimum of bureaucratic features and displays more features of the organic design with a decentralized authority structure, fewer rules and procedures and so on.
SJBIT/MBA
Page31
Functional structure The functional structure groups positions into work units based on similar activities, skills, expertise, and resources (see Figure 1 for a functional organizational chart). Production, marketing, finance, and human resources are common groupings within a functional structure.
Figure 1The functional structure. As the simplest approach, a functional structure features well-defined channels of communication and authority/responsibility relationships. Not only can this structure improve productivity by minimizing duplication of personnel and equipment, but it also makes employees comfortable and simplifies training as well. But the functional structure has many downsides that may make it inappropriate for some organizations. Here are a few examples: The functional structure can result in narrowed perspectives because of the separateness of different department work groups. Managers may have a hard time relating to marketing, for example, which is often in an entirely different grouping. As a result, anticipating or reacting to changing consumer needs may be difficult. In addition, reduced cooperation and communication may occur. Decisions and communication are slow to take place because of the many layers of hierarchy. Authority is more centralized. The functional structure gives managers experience in only one fieldtheir own. Managers do not have the opportunity to see how all the firm's departments work together and understand their interrelationships and interdependence. In the long run, this specialization results in executives with narrow backgrounds and little training handling top management duties. Divisional structure When a company expands to supply goods or services to a variety of customers, offers a variety of different products or are engaged in business in several different markets, the company could adopt a divisional organizational structure. A divisional structure groups its divisions according to the specific demands of products, markets or customers. Unlike the functional organizational structure, where the different organizational functions of the company conduct activities satisfying all customers, markets and products, the SJBIT/MBA Page32
divisional structure focuses on a higher degree of specialization within a specific division, so that each division is given the resources, and autonomy, to swiftly react to changes in their specific business environment. Therefore, each division often has all the necessary resources and functions within it to satisfy the demands put on the division Each division will likely be structured as a functional structure. A company with a divisional structure therefore has a subset of different and specialized SBU's satisfying the demands of different customers, markets or products. The benefit of this organizational structure is that companies are able to specialize its activities into self-reliant divisions, each capable of satisfying e.g. customer demands and changes within the business environment. In divisional structure, the organization is organized into various divisions based on basically three criteria product, market of geographical structures. In product structures, the organization is grouped in such a way that that the employees who are involved in making a specific product are grouped together into one division. A product divisional structure will divide the company into product A, B, C etc and each division will have its own hierarchy. Then there is the market divisional structure in which the organization is organized according to the various markets that it operates in for example business/corporate sales division, consumer sales division etc. Finally we have the geographic division structure in which the organizations is grouped in such a way that employees located in one geographic locations are grouped together to make one division. For example the company may have a headquarter and then a European division, south Asian division etc. Because managers in large companies may have difficulty keeping track of all their company's products and activities, specialized departments may develop. These departments are divided according to their organizational outputs. Examples include departments created to distinguish among production, customer service, and geographical categories. This grouping of departments is called divisional structure (see Figure 2 ). These departments allow managers to better focus their resources and results. Divisional structure also makes performance easier to monitor. As a result, this structure is flexible and responsive to change.
SJBIT/MBA
Page33
Figure 2The divisional structureDisney in the early 1990s. However, divisional structure does have its drawbacks. Because managers are so specialized, they may waste time duplicating each other's activities and resources. In addition, competition among divisions may develop due to limited resources. Matrix structure The matrix structure combines functional specialization with the focus of divisional structure (see Figure 3 ). This structure uses permanent cross-functional teams to integrate functional expertise with a divisional focus.
SJBIT/MBA
Page34
Figure 3The matrix structure. Employees in a matrix structure belong to at least two formal groups at the same timea functional group and a product, program, or project team. They also report to two bossesone within the functional group and the other within the team. This structure not only increases employee motivation, but it also allows technical and general management training across functional areas as well. Potential advantages include

Better cooperation and problem solving. Increased flexibility. Better customer service. Better performance accountability. Improved strategic management.
Predictably, the matrix structure also has potential disadvantages. Here are a few of this structure's drawbacks:

The two-boss system is susceptible to power struggles, as functional supervisors and team leaders vie with one another to exercise authority. Members of the matrix may suffer task confusion when taking orders from more than one boss. Teams may develop strong team loyalties that cause a loss of focus on larger organization goals. Adding the team leaders, a crucial component, to a matrix structure can result in increased costs. Page35
SJBIT/MBA
Team structure Team structure organizes separate functions into a group based on one overall objective (see Figure 4 ). These cross-functional teams are composed of members from different departments who work together as needed to solve problems and explore opportunities. The intent is to break down functional barriers among departments and create a more effective relationship for solving ongoing problems.
Figure 4The team structure. The team structure has many potential advantages, including the following: Intradepartmental barriers break down. Decision-making and response times speed up. Employees are motivated. Levels of managers are eliminated. Administrative costs are lowered. The disadvantages include: Conflicting loyalties among team members. Time-management issues. Increased time spent in meetings. Managers must be aware that how well team members work together often depends on the quality of interpersonal relations, group dynamics, and their team management abilities. Network structure The network structure relies on other organizations to perform critical functions on a contractual basis (see Figure 5 ). In other words, managers can contract out specific work to specialists.
SJBIT/MBA
Page36
Figure 5The network structure. This approach provides flexibility and reduces overhead because the size of staff and operations can be reduced. On the other hand, the network structure may result in unpredictability of supply and lack of control because managers are relying on contractual workers to perform important work. EXCELLENCE: It means surpassing or outstanding achievement. Excellence is important to society because it sets an example, a standard behavior that is socially useful. Excellence is especially valuable in the third world. These are unsettled, seething societies in which the ethic of hard, honesty work for long term success is fighting a titanic battle with the ethic of expediency, short cuts, corruption and use of contacts to bypass merit. Human excellence comes in many forms. Being the best amongst competitors is one form-the excellence associated with the champion. Invention or innovation is another form of excellence. Invention relates to the concept of a bright new idea. All these excellences are obviously not cost free. These are costs of mental and physical effort, sacrifices made by oneself as well as ones dear and near ones in the pursuit of surpassing achievement, opportunities forgone. Human excellence is manifested not just through individual efforts. Team effort is often neededespecially in organizations for surpassing achievements. In settings such as sizeable organizations where specialization is extensive, excellent teamwork is vital for human excellence to manifest itself. The more an organization promotes individual or team excellence, the more the organization is likely to excel, for after all the work of the organization is the work of the individuals and the groups that work in it. Organizational design is therefore largely a matter of promoting individual and group level excellence and synchronizing it to facilitate excellence in achieving organizational level goals. SJBIT/MBA Page37
Some examples of Organizational Excellence: Excellence in the public sector, Excellence in the private sector, Excellence among social development oriented organizations, Excellence among institutions, Turnaround of sick enterprises. FORMS OF ORGANIZATIONAL EXCELLENCE: Just as human excellence takes many forms, so does organizational excellence, for the organization is after all an entity of human for humans and managed by humans. There is the champion-type of organizational excellence-the best performance in a competitive field during a particular period. This may be called as Competitive Excellence. Vastly superior performance compared to the past, the best earnings per share performance among well-performing enterprises in their respective industries. These were the examples of sick organizations that had dramatically improved their performance. This may be termed as Rejuvenatory Excellence. Some American scholars have studied a third form of organizational excellence-that have sustained high corporate performance over a fairly long stretch of time. This may be called as Institutionalized Excellence. Then there are organizations that are deemed excellent because of their uniqueness, their pioneering spirit, their innovativeness, we may call this as Creative Excellence. Pursuing effectively a major social mission or an ideal is another form of organizational excellence. Many public enterprises, altruistic or social change oriented voluntary organizations, and even some private corporations pursue this sort of excellence. We may call this as Missionary Excellence. In the 50s and 60s a number of organizational researchers questioned the excessive emphasis on organizational performance on such indicators as profitability, efficiency, productivity, etc. They felt this emphasis could lead to the neglect of the needs of the needs of people working in the organization. They therefore spoke of organizational effectiveness in which the concern with hard performance indicators is supplemented by concern for well-being and development of the staff, a stakeholder often neglected in the hot pursuit of profits. This idea was further extended by other researchers who argued that most sizeable organizations have multiple stakeholders-not just owners and staff, but also unions, customers, suppliers, the government, bankers etc. The organization that effectively meets the needs and expectations of all these stakeholders is therefore an excellent organization. In this form of excellence, the emphasis is not just on the performance of the organization in terms of profitability, growth, or efficiency, it is also on the satisfaction of the needs of the staff, on meeting its social responsibilities, and commitments to other important stake holders. Since excellence is sought on many fronts, we may call this as Versatile Excellence. These six forms of organizational excellence-competitive, rejuvenatory, institutionalized, creative, missionary and versatile are not mutually exclusive. Indeed, some organizations possess or pursue several types of organizational excellence. But conceptually they do differ, and therefore the sort of management and organizational design needed to achieve each would also differ. These excellences represent distinctive competencies that must be mastered for third world societies to move ahead swiftly.
SJBIT/MBA
Page38
NEED FOR THESE EXCELLENCES: a) Competitive excellence is needed to increase the adaptability, market orientation and resourcefulness of third world organizations, especially enterprises, so that they can reach global levels of efficiency. b) Institutionalized excellence is especially needed where the whip of competitive pressure is weak or where top management continuity is problematic (as in government owned enterprises or agencies.) c) Rejuvenatory excellence is needed to be mastered because of the sickness proneness of sizeable Third World organizations. d) Missionary excellence is needs to be learnt because many sizeable organizations, including enterprises, have vast social or economic missions to accomplish in the context of Third World backwardness. e) Creative excellence needs to be learnt because of the pressing need for innovative and fresh approaches in many ossified spheres of Third World societies. f) Versatile excellence also is important for those organizations that have numerous stakeholders and pursue many different goals. APPROACHES TO ORGANIZATIONAL DESIGN: There are different approaches to organizational design, each resting on some basic assumptions and each having some research support: Since all formal, sizeable organizations all over the world share so much common (viz. the need to acquire and allocate resources, the need to control and coordinate activities, the need to manage and motivate human resources, the need to adapt to external changes, etc.) there are likely to be some principles, policies, practices, structures, systems etc. that are universally good. If these are adopted, any organization anywhere should perform better than it would if it did not adopt them. Excellence according to a third view depends upon how synergistically strategic choices are managed. There are different kinds of excellence, and therefore organizational designs must be tailormade to the excellence that is sought. COMPETITIVE EXCELLENCE: A variety of organizations compete for clientele. These include firms, political parties and unions. An even wider variety competes for resources. Government departments may not compete with one another in the market place, but they often compete for government funds. Similarly faculties of a university compete for funds of the university and universities compete with other universities for faculty members and other resources. Organizations that face little or modest competition can ignore it., but not those that face a good deal of it. Competitive excellence becomes critical in domains where competition for clientele and/ or resources has a bite to it. It is that the pressure is palpable to prioritize sharply, develop domain-directed strategies, and streamline the organization to control costs, increase productivity, and coordinate activities effectively. Ex: Singapore Airlines, owned by the government of Singapore, during 1969-79 Singapore airlines improved its position from being 59th world largest to the 9th largest, with an annual growth rate of 46%. Its profit rose from $28m in 1977-78 to $105m in 1981-82.A study rated it SJBIT/MBA Page39
as the top airline among 52 competitors in the Asian region. On all five dimensions-service and performance, esteem and preference, image awareness and familiarity and advertising recall. The number of other factors were, rapid fleet expansion, aggressive route development overseas and highest quality of customer service. The chief characteristic of this form of excellence is being outstanding within a field of competitors vis--vis a clear cut criterion or a few reasonably clear cut criteria of performance. Ex. The company with the best or outstanding return on investment and or the fastest growth rate within an industry in a given year is typical example of this sort of excellence. The school within a city with the highest percentage of students getting first class at school leaving certificate examinations, the public hospital winning an award for the lowest mortality rate, the bank with the best loan recovery performance, the news paper with the highest circulation and so on. To be able to be best competitor, the champion organization must have a clear cut goal( or a few clear cut goals) and strong management commitment to excel at this goal or these goals. It must have a tight control over operations and co-ordination of activities through teamwork. It would need excellent mechanisms for monitoring the field of operations, the actions of competitors, and the organizations performance. A resourceful management that can quickly respond to the currents of competition and a culture of quickly adopting the tried effective practices in the organizations would be very helpful. A lean organization and low overheads would contribute to bashing competitors, as would aggressive marketing capability. On a hard competitive track, the organization resembles a compact, streamlined, power-packed racing car raring to win. The design for competitive excellence can be summarized as follows: a) Mission, vision of excellence and core values: Conservation of organizational energies for meeting competitive challenges and sharp focus for all organizational activities is important in a competitive situation. It is useful to adopt to specific rather than many missions. Core values must be particularly compatible with the purpose of the organization and its operating context. Vision of excellence is useful to a competing organization when it is anchored in the quality performance of the organization on a few parameters like efficiency, productivity and growth. b) Management style: Although several management styles may be practiced in a competitive domain, in sizeable organizations a professional participatory management style may be appropriate for competitive excellence. Such style would be characterized by systematic, planned, expertise and strategy based rather than ad hoc decision making at the top levels, reasonable commitment to ethics and idealism on the part of management, and participative consensus seeking decision making. c) Policy framework: A strong market orientation aggressive pursuit of domain dominance, operating autonomy to managers supplemented by team decision making and meritocracy in recruiting personnel and rewarding staff constitute an appropriate policy framework for securing competitive excellence. d) Management systems and structures: A flexible flat organization structure, divisionalisation, a modest amount of routinisation and standardization of activities, strengthening of line departments by locating staff experts in
SJBIT/MBA
Page40
them, strategically placed coordination committees and an effective performance control related management system should facilitate competitive excellence. e) Renewal mechanisms: Need to supplement single loop learning by periodic double loop learning through survey feedback, image sharing, sensitivity training, MBO, and periodic reorganization studies are useful. Brainstorming by decision makers and the use of other tools of creative problem solving can generate innovative ideas that can, in turn, provide a competitive edge to the organization. INSTITUTIONALISED EXCELLENCE: Competitive pressures in the domains of many third world societies are relatively weak. Government dominance often threatens to politicize and bureaucratize the larger organizations, especially those dependent on the government for funds owned by it. For the latter sorts of organization, changes of chief executives are frequent so that top level management continuity is weak. If the organization internalizes norms of excellent functioning, it may continue to function well despite weak competitive pressures and an adverse control environment. And organizational leadership during the formative years of the organization is needed that makes the right choices of what mission to pursue and how. Ex: National Thermal Power Corporation of India, was set up in mid seventies by te government of India to speed up Thermal power supply. Between 1982-1990 it increased its supply by ten times. It was profitable throughout and its profit was 100 times over the previous years and consistently earned more sales. It also went from setting up 110 mw power stations to 500mw power stations. It also ventured into the setting up of sophisticated gas-based power stations. Competitive pressures were not a major factor in NTPCs operating excellence. NTPC was able to achieve an outstanding track record because its leadership had institutionalized a strong result-oriented work culture. The chief characteristic of this form of excellence is sustained high achievement over a long period of time on important performance parameters even when there is little pressure, by way of competition, for excellence. The organization may not necessarily be the best on all or even one of these parameters. HMT had a distinguished track record stretching sometimes over decades. Such sustained high performance may require the institutionalization of good management practices, and a high order of professional management. It may need top management continuity and orderly succession through carefully selected successors chief executives well acquainted with the organizations excellent traditions and norms of excellence. Also needed may be widespread commitment of the staff to a vision of excellence and to core values related to this vision, an elite community or clan culture, and a concern with long term excellence rather than current expediencies. The design for institutionalized excellence can be summarized as follows: a) Mission, vision of excellence and core values: For an organization to become institution it has to acquire high social and internal standing, it should internalize a wider set of core values. These need to be anchored in not only the organizations purpose and context, but also, wider social concerns such as socio-economic development, and also in wider human concerns such as for justice, nurturance, autonomy and self-actualization. The vision of excellence needs to extend beyond critical performance SJBIT/MBA Page41
indicators to one of excellent quality of functioning(such as high professionalism or ethical or demographic functioning) for society and staff to develop a deep stake in the organization. Management Style: The professional participative style can ensure the institutionalization of values and norms that internally and externally earn the status of an excellent institution. Such a style can institutionalize in the organization such as systematic, expert-based, planned decision making, ethical internal and external behavior, commitment to ideals, concern for human resources and participative reasonably democratic decision making. Policy Framework: Polices of offering market orientation, team decision making, paternalism, human resource development, emphasis on persuasion rather than power in dealing with the staff, decentralization through a management by exception policy, and recruitment of innovative young professionals constitute an effective policy framework for pursuing institutionalized long-term excellence. Management systems and structures: Institutionalized excellence is facilitated by comprehensive, sophisticated professional management systems, complex differentiation under major divisions or responsibility centers, a structure of participative decision making, sophisticated planning and human resource development systems, and periodic comprehensive reviews of the organization functioning. Renewal Mechanisms: Survey feedback, SWOT, long range forecasting and scenario building are some of the mechanisms that can foster institutionalized excellence.
b)
c)
d)
e)
REJUVENATORY EXCELLLENCE: Organization sickness is rather common today. There are many reasons for it. Political and bureaucratic interference, complacency bred by low competitive pressures, erratic government policies, unreliable or insufficient transport, communications, power and other infrastructural facilities, turbulent industrial relations and inappropriate management. That is, the right norms, values, practices and systems do not get internalized, with the result that modest unfavorable changes in the operating environment can precipitate major bout of sickness. Ex: Western Coal Fields, Pankaj Sinhas stewardship of Pench, a coal division belonging to the government of India tells how transformational leadership can rejuvenate the sick organization. Sinha became the chief after a threatened closure of mines in Pench affecting 2500 jobs had made industrial relations turbulent. Far from a fall in production Pench could increase its productivity by over33%, it reduced the losses to a great extent, reduced the accident rates and received an award for best performance. As indicated the organization culture underwent a sea change after Sinha took over with far better communications and more participative decision making. The chief characteristic of this form of excellence is vast improvement over previous performance. Many organizational turnarounds from sickness or decline exhibits this form of excellence. The sort of management that may be needed for this form of excellence is distinctive. A strong high energy leadership that galvanizes the organization and leads from personal example, quick pay-off options that restore faith in the ability of the organization to tackle SJBIT/MBA Page42
problems and solve them successfully, a great deal of internal communication to mobilize the rank-and-file for the great effort needed to rejuvenate the organization, negotiations with external stakeholders like financial institutions, suppliers, and government for their support to rejuvenate the effort, a culture of getting things done, quick fixes, improvisations, resourcefulness, extensive participation of lower level staff in evolving a turnaround strategy and implementing it. This revival is generally not through the force of charisma. It generally is achieved through effective management actions. The design for rejuvenatory excellence can be summarized as follows: a) Mission, vision, core values: Since the thrust of rejuvenatory excellence is to reclaim lost ground, thus missions need to be few specific and local rather than global to provide a crisp rallying point. Core values need to be anchored not only in the organizations purpose and context, but given widespread staff demoralization, also in basic human urges like security, need for nurturance, autonomy and selfactualization, that is, in values that uplift spirits and motivate people to put up their best. b) Management style: Organizational rejuvenation comes in two phases. The first phase is one who revive a demoralized, apathetic staff and restoring the confidence of suspicious external stake holders. An entrepreneurial management style of bold decisions, result oriented, flexible style is important. Once unfreezing from organizational paralysis has been accomplished, the task becomes one of consolidating the gains and maintain momentum through a professional and participative style that accomplishes systems building, expertise through a professional and participative style that emphasizes system building would do good. c) Policy framework: While the policy framework for stabilization of recovery would be similar to that for institutionalizing excellence, policies for excellent recovery consist of strong market orientation, personnel management, recruitment of innovative and young professionals and seeking the participation of external stake holders as partners and rehabilitating the organization. d) Management systems and structure: In the early phase of rejuvenation, the emphasis should be on rectifying glaring defects in existing management structures and systems rather than on emplacing professional management systems. Also, changes in structures and systems must depend heavily on the main cause of sickness. If it is over-structuring some spring cleaning may be necessary, if it is under structuring greater role clarity and standardization of activities may be needed. If it is over centralization, decentralization may be useful, while if it is laissez-faire management, some centralization can be called for. e) Renewal mechanisms: Useful tools are diagnostic survey, survey feedback, brainstorming, exnovation, action research, participative redesign of work, image sharing, management by objectives, market surveys, use of consultants to highlight grave discrepancies between current practice in the organization and current best practice in the domain.
SJBIT/MBA
Page43
MISSIONARY EXCELLENCE There are many missionary organizations. Many are set up by the government, other by private parties as enterprises, cooperatives, institutions or voluntary organizations. Even organizations set up to pursue profits are expected to have a social conscience and work for the good of society. But mission is not just altruism. An exalted mission attracts talented and dedicated professionals, motivates employees to perform heroic deeds and make sacrifices, and attracts financial and other support of the government and society. When missions are pursued effectively, the benefits to beneficiaries are palpable. In some cases, effective pursuit of missions can make a life or death difference to beneficiaries. Ex: Indigenous Affairs Council (IAC), an American voluntary organization committed to social development, intervened in Gatong, a rural community in Phillipines, with a view to increase the income and quality of life members of the community and increase their sense of identity. In four years of involvement in Gatong, a community of about 200 families, IAC was able to increase annual family income by 350%, complete 19 infrastructure projects, decrease infant malnutrition from 85% to 24% and lower birth rate from 45% to 30%. Elementary school increased by over ten times. Formal training and seminars were an important part of IAC strategy. Potential leaders were developed through training.IAC sought to change peoples perceived inability to do anything about their own development. Note worthy contributors to IACs success seem to be specific, local missions, a vision of excellence closely tied to regeneration and improved quality of life, participation by clientele in diagnostic and development activities, the use of local culture and local opportunities in pursuing the mission, effective coordination of both social and economic activities. The chief characteristic of this form of excellence is dedication to some social mission or ideal and the ability to make outstanding progress in achieving this mission or deal. The goals are altruistic and the resources are often limited. To achieve this form of excellence the organization may need to attract dedicated professionals who do not mind meager salaries and poor perks. Decision making need to be decentralized and participative. The design for Missionary excellence can be summarized as follows: a) Mission, vision and core values: It is best to seek missionary excellence through achievable, specific, local few missions. Then progress will be rapid, confidence gets built up, and mission enlargement becomes possible. Core values need to be anchored on the development imperative. Commitment to the value of client satisfaction can enable the organization to seek missionary excellence to turn the client for their own good. b) Management style: Altruism and participation are indispensable elements for pursuing missionary excellence. Missionary organizations are however, often weak when it comes to management systems. Their effectiveness can be greatly increased if profeesionalism and expertise are injected to their decision making. Thus the most appropriate style for achieving missionary excellence may be the altruistic participative professional style. c) Policy Framework: Policies of giving priority to social or national priorities over financial criteria in assessing new ventures, integrity and honesty in business dealings, and nurturing of staff and development of collaborative relations with unions and other external stakeholders constitute an appropriate policy framework for pursuing missionary excellence. SJBIT/MBA Page44
d) Management structure and systems: Since networking with other organizations for mission accomplishment is indispensable, either coopting them in organizations decision making structure (for example, by inducting their representatives on the organizations board) or setting up a council of cooperating organizations would be useful. To compensate for the often weak management systems for planning, financing, implementing and evaluating projects need to be institutionalized. e) Renewal Mechanisms: Missionary excellence is facilitated by two sets of renewal mechanisms. Those that renew the missionary organization and those that renew the organizations and systems of the targeted beneficiaries. Mechanisms that renew the missionary organization itself are social learning (learning from the organization mistakes, planning activities with the participation of beneficiaries, linking knowledge to action and community beneficiary participation in operations). Mechanisms that renew the organizations and systems of intended beneficiaries are the mechanism of transformational leadership. CREATIVE EXCELLENCE: Creativity and innovation are of strategic importance to third world societies. Poverty and backwardness are not the results of only lack of resources. Often they are the outcomes of social conservatism, low spirit of adventure and experimentation, and fear of unfamiliar. Creative excellence offers a competitive advantage to the organization, excitement ot its staff and useful novelty to its client. Ex: Mudra Communications, based in Ahmedabad, India, stood out during the eighties. Set up in 1980 by Mr A.G Krishnamurthy as in-house agency of a major business group, by 1991 it had become the third largest ad agency in India. While industry leaders barely doubled their billings between 1983 and 1986, Mudra increased them 7 times. Mudra was distinctive in several ways: Mudra set up a division called interact to identify small clients with potential growth.It set up a in-house market research group called Samir to provide a strong advertising support function. Mudra took up social responsilbility seriously in an industry not known for this virtue. Mudra hired professionals to computerize its operations The chief characteristic of this form of excellence is the commitment to pioneering, innovation, experimentation, discovery and dynamic change. The organization is in a state of continuous flux, shedding or modifying current activities, practices and products and adopting new ones. There is much impatience with the status quo. A leadership rooted in expertise, competence, and creativity rather than in formal position is likely. A culture of creativity and innovation is likely to prevail. The design for creative excellence can be summarized as follows: a) Mission, vision and core values: General, global, varied missions are more likely to spur organizational creativity than a narrow, specific, single track mission. Besides compatibility with the purpose and operating context, core values need to be anchored in the developmental imperative to simulate search for changes and innovations. An entrepreneurial vision of turning into a unique, pioneering organization in its domain also may sustain the pursuit of creative excellence.
SJBIT/MBA
Page45
b) Management Style: Entrepreneurial mode may be the most appropriate style for creative excellence. c) Policy Framework: Policies of rapid, opportunistic (rather than pre-planned) growth and diversification through risky but high potential ventures, strong market orientation, recruiting innovative young professionals, open channels of communication within the organization, decentralization, meritocracy and professionalism in management constitute an effective package of policies for pursuing excellence. d) Management systems and structure: For creative excellence, structures and systems must facilitate both the generation of innovations and their effective implementation. To spawn creative ideas, organic, informal management systems, global scanning for ideas and opportunities, a relatively flat hierarchy and large span of control, a matrix flexible structure , a personnel management system that gives primacy to creativity and resourcefulness in recruiting and promoting staff are needed. e) Renewal Mechanisms: It is not enough to sprout with innovative ideas. These needs to be developed, refined and adopted by the organization. Identification and grooming of internal change agents to ensure the adoption and stabilization of innovations would be useful for this purpose. Also useful would be effective planning of innovations, their pilot testing, their periodic review, stabilization and scale up. VERSATILE EXCELLENCE: In the third world, given its handicaps, not many organizations can excel. Even fewer can excel at many tasks. The few that do are important nurseries of managerial talent and management competence. Certainly, third world societies have the option of setting up organizations that pursue specialized tasks. But so great are the demands on sizeable third world organizations that often the latter tend to pursue multiple objectives. Especially in the public sector it makes sense to understand the mechanics of versatile excellence. Ex: Bharat Heavy Electricals Limited, a public sector owned by the government of India. Founded in 1964 and enlarged through a merger with another public sector enterprises in midseventies, by the mid-eighties BHEL had nearly 75000 employees, and was one of the twelve largest manufacturers of power equipment in the world. Different achievements of BHEL are summarized below: BHEL supplies 90% of the power equipment installed in India. It has the widest range of products and services in the world. It was able to secure technical collaboration with around 25 international giants based in various countries. It nurtured 200 small scale industries. It set up management development institutes. It adopted over 20 villages and implemented welfare and employment oriented projects in them. It planted a million trees. The chief characteristic of this form of excellence is the desire and ability to meet the expectations of all the significant stakeholders of the organization-owners, staff, suppliers, customers, government, bankers, unions etc. The organizations have multiple goals, corresponding to the diversity of expectations the organization is trying to meet. For example, it may seek reasonable profitability to keep its owners happy, a good growth rate to create opportunities for growth for its staff managers, a reputation for social responsibility to please the
SJBIT/MBA
Page46
government, good customer service to placate customers, cordial industrial relations to keep everyone happy. The design for versatile excellence can be summarized as follows: a) Mission, vision, core values: Versatile excellence implies excelling at many tasks and commitments, and hence, in sharp contrast to other excellences, for versatile excellence multiple, varied missions may be more appropriate than single or few missions, although these too need to be specific and local rather than global for focusing organizational energies. Core values need to be varied enough to permit efforts in multiple directions. They need to be anchored not only in the purpose of the organization and its operating context but also in societys core values and impulses, especially the developmental thrust, and also in the basic human urges. Visions of excellence also need to be varied enough to attract the diversity of talented needed to pursue excellence on many fronts. b) Management style: For many- sided excellence, the organization needs to build up varied strengths. This is best secured through a dynamic professional and participative style of management supplemented by an altruistic, idealistic style. c) Policy Framework: A global rather than a local perspective in choosing domains, technologies, plant locations, management practices, etc can powerfully aid versatile excellence. Policies of networking with external stakeholders for furthering multiple goals of the organization, staff commitment through participative team decision making, and employee loyalty through paternalism should also contribute significantly to versatile excellence. d) Management systems and structures: Two structural alternatives are available for facilitating versatile excellence: Set up several organization sub-systems each dedicated to the pursuit of a particular dimension of excellence and train managers to pursue several objectives simultaneously. If the first option is pursued, it would result in high levels of organization differentiation and powerful integrative mechanisms need to be utilizes to prevent conflicts and poor coordination. If the second option is pursued, a performance related management system should be designed, and a formal training and job rotation system must be designed that builds into managers competencies related to versatile performance. e) Renewal mechanism: Brainstorming to extend the applications of learning, changes, and innovations arising in one parts of the domain or while pursuing one goal or the satisfaction of one class of stakeholders to other parts of the domain or the pursuit of other goals or the satisfaction of other stakeholders should also be useful to get the maximum mileage out of them. EXTERNAL NURTURANCE OF OEGANIZATIONAL EXCELLENCE: The ultimate responsibility for excellence rests with the management and staff of the organization. But significantly auxiliary roles can be played by various agencies in promoting organizational excellence. Let us consider the possible role of the following three: A) The role of the Super system in promoting excellence: Many sizeable organizations are legally owned and controlled by super systems. A public enterprise is owned by the government and controlled by a ministry of the government. This means that who gets appointed as the chief executive, what long-term investments the enterprise SJBIT/MBA Page47
makes, and other major decisions are generally made not by the government agencies which constitute the super system in which the enterprise is embedded. Similarly, significant investment, personnel and other decisions of subsidiaries are often made by their holding companies, of academic, health and other not-for-profit organizations by trusts or societies that control them of cooperative societies by apex bodies etc. The different behaviors of the controlling super system that contribute to the excellence of the controlled system are as follows: i) The selection of a dynamic professional committed to the missions and goals of the organization and its controlling system is usually the single most important contribution by the super system to the excellence of the organization. ii) The controlling system should conduct a fairly frequent detailed performance review of the organization to ensure that its management remains alert, knowledgeable and responsive to the developments and thinks through issues and development options. iii) Annually, the controlling system and the organization should agree on priorities for the coming year. Some kind of a management by objective is appropriate. iv) The super system should exert strong pressure for the attainment of agreed upon targets and goals and at the same time must be highly supportive if the organization runs into unexpected rough weather beyond its control. v) The super system should grant to the organization a great deal of operating autonomy, holding it accountable for performance rather than practices and procedures. vi) Those at the super systems that monitor the organization need to be dynamic professionals. vii) The super system must ensure management continuity at the organization. viii) The super system should create opportunities for its controlled organization to learn from one another and collaborate with one another. B) The role of domain influencing institutions in promoting excellence: Very many domains have domain influencing institutions. Associations of schools, chambers of commerce, trade and industry associations, associations of professionals, industry research institutions, apex cooperative societies, central banks, etc are examples of domain regulating or influencing institutions. Often they act mainly as special interest lobbies, pressurizing the government for concessions and special treatment of its members or they act to reduce competition between members by fixing various norms of behavior in the market place. In the third world, where organizations have to learn to master unfamiliar technologies both of operations and management, these domain influencing institutions can play a very important role in developing knowledge of good technical and management innovations and practices and disseminating this knowledge to their members. They can pool information available with members to develop more informed judgments about the future, such as forecasts can help members make more realistic plans for the future. By employing experts in different areas, domain influencing institutions can also provide counseling services to the smaller, more vulnerable of their members. By organizing workshops, conferences, etc, they can facilitate collaborate contacts between members which may fructify into joint ventures. They can also articulate a vision of excellence for the domain, core values, missions for the domain, especially its role in the socio-economic development of the nation, which can help members adopt the right sorts of values, visions, missions, etc. In short, domain influencing institutions can become significant disseminators of organizational excellence. SJBIT/MBA Page48
C) The role of the government in promoting organizational excellence: The role of the government in speeding up socio-economic development of poor countries is vast. Opinions range from a minimal to a maximal role of the government (laissez faire at one end to comprehensive state planning at the other), and also range over such alternative strategies of economic development as free markets, export-led growth, concentration on heavy and basic industries and infrastructure and emphasis on consumer goods. Yet another option that may give a synergy with several of these alternative strategies is one of promoting organizational excellence. The government can play a big role in promoting organizational excellence. It can do so through a variety of means, such as fostering both competition as well as collaboration within a domain, setting big national goals and missions that energize the pursuit of excellence in strategic organizations, rewarding organizational excellence and punishing sloppy organizational performance, and creating enabling conditions for excellence. CONCLUSION: Sizeable organizations are quite complex, and their effective management and design is difficult, especially in Third world conditions. But there are enough examples of organizational excellence in third world contexts to suggest that given the right sort of design and management, organizational excellence can be much more widespread. Several keys to organizational excellence have been identified, namely, organizational passion (core values, missions, vision of excellence); goals, polices, and operating niches; management systems and structures; and learning, creativity, transformational leadership, and organizational development and other behavioral science interventions. In present day scenario, altruistic, professional, and participative modes of management can facilitate most of these excellences. So can the pursuit of such organizational goals as faster growth, increased managerial skills, more dedicated pursuit of social or national priorities, greater staff morale, higher operating efficiency, and a more professionalized management (ad hoc, or intuitive management). Although organizational excellence is mainly accomplished by the management of the organization, certain external stakeholders can play important auxiliary roles in promoting it. The owner/controller of the organization can play an important role, especially in promoting institutionalized excellence, by choosing a dynamic professional committed to the missions and goals of the organization. Domain influencing institutions can amass knowledge of effective technical and management innovations and practices and disseminate it to organizations operating in the domain. They can facilitate collaborative contacts between organizations by organizing conferences, workshops, etc. They can also articulate a vision of excellence for the domain, and propagate core values and missions for the domain, especially its role in the socio economic development of the nation, that can provide the right sort of perspective and values of the organizations operating in the domain. The government can play a very important role in promoting organizational excellence. By setting up a variety of strategic organizations that catalyze faster and more balanced economic growth, improvement in the quality of life, and greater social justice, it can make possible the birth of thousands organizations. Besides the creation and effective management of strategic organizations, the government can spur excellence also by fostering competition as well as collaboration within domains of activity, by setting big national goals and missions that energize the pursuit of excellence. SJBIT/MBA Page49
The designs are merely starting points for a better fit between the organization, its context, and the kind of excellence it seeks to achieve. In other words, they are just models, not gospels, to be adopted or adapted or discarded after trial. They are ideas to get going on the excellence journey. These designs are not powered by some impersonal, anti-human rationality. Very likely, they promote overall third world objectives. Their cornerstones are such values as altruism, participation, pioneering, innovation, professionalism, human resource development, and social contribution, not single minded profit maximization or domain dominance. More important, these designs have been derived from excellent third world organizations that are alive with these values.
--------------------------------------------********************--------------------------------------
SJBIT/MBA
Page50
MODULE 3 Structural Dimensions of Organization design: Organization Design -Components of Organization Design - Dynamic Balance Organization structure, dimension - division of labor, standardization, horizontal Differentiation, Advantages & disadvantages of Departmentalization; Vertical Differentiation, Span of Control, Centralization, Formalization, Implication of High Formalization, Flexibility. ORGANISATIONAL DESIGN: It is the overall set of structural elements and the relationships among those elements used to manage the total organization as a whole. It involves designing the organization structure by developing, changing etc. Organization design is concerned with making decisions about the forms of coordination, control and motivation that best fit the enterprise. In making these decisions, it is necessary to consider external factors like the market and internal factors like the needs and aspirations of the member of the enterprise. ORGANISATIONAL STRUCTURE: It is the formal network by which jobs/tasks are divided, grouped and coordinated. It reflects formal relationships among groups and individuals. It provides guide lines for effective employee performance and overall organization success. Structure is a means for attaining the objectives and goals of an institution. Any work on structure must therefore start with objectives and strategy. FIVE APPROACHES TO ORGANIZATION STRUCTURE: Managers must make choices about how to group people together to perform their work. Five common approaches functional, divisional, matrix, team, and networkinghelp managers determine departmental groupings (grouping of positions into departments). The five structures are basic organizational structures, which are then adapted to an organization's needs. All five approaches combine varying elements of mechanistic and organic structures. For example, the organizational design trend today incorporates a minimum of bureaucratic features and displays more features of the organic design with a decentralized authority structure, fewer rules and procedures, and so on. A) FUNCTIONAL STRUCTURE: The functional structure groups positions into work units based on similar activities, skills, expertise, and resources. Production, marketing, finance, and human resources are common groupings within a functional structure.
SJBIT/MBA
Page51
The functional structure As the simplest approach, a functional structure features well-defined channels of communication and authority/responsibility relationships. Not only can this structure improve productivity by minimizing duplication of personnel and equipment, but it also makes employees comfortable and simplifies training as well. But the functional structure has many downsides that may make it inappropriate for some organizations: They are: a) The functional structure can result in narrowed perspectives because of the separateness of different department work groups. Managers may have a hard time relating to marketing, for example, which is often in an entirely different grouping. As a result, anticipating or reacting to changing consumer needs may be difficult. In addition, reduced cooperation and communication may occur. b) Decisions and communication are slow to take place because of the many layers of hierarchy. Authority is more centralized. c) The functional structure gives managers experience in only one fieldstheir own. Managers do not have the opportunity to see how all the firm's departments work together and understand their interrelationships and interdependence. In the long run, this specialization results in executives with narrow backgrounds and little training handling top management duties. B) DIVISIONAL STRUCTURE: Because managers in large companies may have difficulty keeping track of all their company's products and activities, specialized departments may develop. These departments are divided according to their organizational outputs. Examples include departments created to distinguish among production, customer service, and geographical categories. This grouping of departments is called divisional structure. These departments allow managers to better focus their resources and results. Divisional structure also makes performance easier to monitor. As a result, this structure is flexible and responsive to change.
SJBIT/MBA
Page52
The divisional structure However, divisional structure does have its drawbacks. Because managers are so specialized, they may waste time duplicating each other's activities and resources. In addition, competition among divisions may develop due to limited resources. C) MATRIX STRUCTURE: The matrix structure combines functional specialization with the focus of divisional structure. This structure uses permanent cross-functional teams to integrate functional expertise with a divisional focus.
The matrix structure SJBIT/MBA Page53
Employees in a matrix structure belong to at least two formal groups at the same timea functional group and a product, program, or project team. They also report to two bosses one within the functional group and the other within the team. This structure not only increases employee motivation, but it also allows technical and general management training across functional areas as well. Advantages include: Better cooperation and problem solving. Increased flexibility. Better customer service. Better performance accountability. Improved strategic management. Predictably, the matrix structure also has potential disadvantages. Disadvantages Include: The two-boss system is susceptible to power struggles, as functional supervisors and team leaders vie with one another to exercise authority. Members of the matrix may suffer task confusion when taking orders from more than one boss. Teams may develop strong team loyalties that cause a loss of focus on larger organization goals. Adding the team leaders, a crucial component, to a matrix structure can result in increased costs. Team structure Team structure organizes separate functions into a group based on one overall objective. These cross-functional teams are composed of members from different departments who work together as needed to solve problems and explore opportunities. The intent is to break down functional barriers among departments and create a more effective relationship for solving ongoing problems.
The team structure SJBIT/MBA Page54
The team structure has many potential advantages. Advantages Include: Intradepartmental barriers break down. Decision-making and response times speed up. Employees are motivated. Levels of managers are eliminated. Administrative costs are lowered. Disadvantages Include: Conflicting loyalties among team members. Time-management issues. Increased time spent in meetings. Managers must be aware that how well team members work together often depends on the quality of interpersonal relations, group dynamics, and their team management abilities. Network structure The network structure relies on other organizations to perform critical functions on a contractual basis. In other words, managers can contract out specific work to specialists.
management information
Accountsrecevablesand billing
companycore
Security
BenifitAdministration
The network structure This approach provides flexibility and reduces overhead because the size of staff and operations can be reduced. On the other hand, the network structure may result in unpredictability of supply and lack of control because managers are relying on contractual workers to perform important work. DETERMINANTS OF ORGANIZATION DESIGN: h) Strategy i) Organization j) Technology k) Environment l) Power-Control m) Age n) Size SJBIT/MBA Page55
THE SIX KEY ELEMENTS THAT MANAGERS NEED TO ADDRESSS WHEN THEY DESIGN THEIR ORGANISATION STRUCTURE ARE: g) Work Specialization: The degree to which tasks in an organization are sub-divided into separate jobs. Work specialization in other words is division of labor. h) Departmentalization: The basis by which jobs are grouped together is called departmentalization. Popular ways to group activities is by functions performed. i) Chain of Command: It is an unbroken line of authority that extends from the top of the organization to the lowest and clarifies who reports to whom. j) Span of Control: The number of sub-ordinates a manager can efficiently and effectively direct. k) Centralization and Decentralization: The degree to which decision making is concentrated at a single point in an organization. l) Formalization: The degree to which jobs within an organization are standardized. OTHER STRUCTURES FOLLOWED ARE: a) Simple structure: It is characterized by a low degree of departmentalization, wide span of control, authority is centralized in a single person and less formalization. b) The Bureaucracy: High routine tasks achieved through specialization, tasks are grouped into functional departments, centralized authority and narrow span of control and decision making follows chain of command. c) The Pizza structure: Here hierarchy is abolished. Functions dont have separate goals. People work in self-directed teams or work teams. All managers are members of one such team. d) The Spaghetti Organization: It is a new IT system which led to the virtual elimination of paper. Focusing on technology to serve the end users. e) The Fishnet Organization: It is flexible and adaptable. It can form and re-form while retaining its inherent strength. f) Empowered Organization: It is an organization in which individuals have the knowledge, skills, desire and opportunity to succeed in a way that leads to collective organization success. g) Virtual Organization: A small core organization that outsource major business function. h) Boundary less Organization: An organization that seeks to eliminate the chain of command. Have limitless span of control and replace department with empowered teams. Divisional Structure: An organization structure that groups employees around geographical areas, clients or output. Three types of divisional structure are as follows: (a) Product Departmentation/Structure President/ Director Marketing
Marketing Manager SJBIT/MBA
Marketing Manager
Marketing Manager Page56
(Audio Products) Video Products ( Electronic) Products Supervisors
Supervisors
Supervisors
(b) Geographic Departmentation/Structure General Manager (Marketing)
Manager Marketing (Sales) Northern Region
Manager Marketing (Sales) Southern Region
Manager Marketing (Sales) Western Region
Manager Marketing (Sales) Eastern Region
(c) Mixed Departmentation/Structure
CMD (Chairman and Managing Director) Director Financing GM FINANCE (KGF) GM FINANCE (BANGALORE) G M FINANCE (MYSORE) Director Production G M PROD DIVISION BANGALORE COMPLEX ED TRUCK DIVISION Director H R D Director Marketing Director R&D
GM (KGF) GM BANNGALORE COMPLEX GM (MYSORE DIVISION)
REGIONAL GM R & D MANAGERS (KGF) DISTRICT MANAGERS ED, SALES SERVICES GM STORE PARTS GM (R & D) BANGALORE GM (R & D) MYSORE
SJBIT/MBA
Page57
One of the most comprehensive and rational approach for classifying structures was proposed by Mintzberg (1980-1983). According to him an organization can be seen as composed of five basic parts. They are: f) The Strategic Apex: It consists of the top level management in-charge of the overall organizations. It may consist of a top management team or a single individual. g) The Operating Core: This consists of employees who perform the basic work related to the production of goods and service for which the organization is meant. h) The Middle Line: This consists of the people who connect the strategic apex to the operating core. These are intermediate managers who transmit, control and help in implementing the decisions taken by the strategic apex. i) The Techno structure: This consists of staff functionaries and analysts who design systems for regulating and standardizing the formal planning and control of the work. j) The Support Staff: It consists of people who though not directly involved in the work process provide indirect support to it. Services like cafeteria, mailing, transport etc Comparison of Tall and Flat Organizational Structures Tall Organization Structure (Narrow span of control) Needed when: Closer control and monitoring is required. Mistakes are likely to be costly. Tasks/roles are clear; require specialization. Routine technology. Inexperienced subordinates. Placid, stable environment. Dysfunctional consequences: Discourages initiative, centralization. Bottlenecks, distortion communication. Slow promotion. Flat Organizational Structure (Wide span of control) More autonomy and self control is required. Flexibility and innovation is required. Ambiguous tasks and roles; specialization doesnt work. Non-routine technology. Experienced subordinates. Unstable, turbulent environment. encourages Lack of proper control; encourages laissezfaire. of vertical Too much demand on the manager for coordinating. Reduced promotional opportunities.
COMPONENTS OF ORGANISATION DESIGN: For any practicing manager, designing the organization would involve converting his/her understanding of the influences, into tangible organizational structures. An effective structure would be one which can successfully cope with these demands and constraints. But in order to design such an organization, the manager must also be aware of the building blocks of an organization structure. It is necessary therefore, to consider what constitutes the organizational structure. SJBIT/MBA Page58
It is still possible to identify some of the significant and empirically verified components of the organization. Even though, the terms used by the researches have varied, there are sufficient overlaps in their decision to make it possible to integrate the findings under three major components: Complexity, Formalization and Centralization.
A) COMPLEXITY: Complexity refers to the degree of differentiation that exists within the organization. (Robins 1987) . It focuses on the number of specific jobs, roles, hierarchical levels, work centers, etc, in the organization. The greater the differentiation in the organization, the more complex would be the organization. The more complex an organization, the greater is its need for devising more complex mechanisms for control, coordination and communication. When an organization is not very complex, the activities of its members can be controlled and coordinated through simple mechanisms, such as informal communications and a few rules and procedures etc. With increasing complexity, these simple mechanisms become ineffective. To reduce the uncertainty in decision making, more expensive and sophisticated mechanisms are required by the organization. One finds highly complex organizations using a variety of such control and coordination mechanism, e.g, coordination committees, computerized information system, policy manual etc. Organizations can be complex in three ways: a) Horizontally (the degree of differences in the nature of jobs in the organization.) b) Vertically (the number of hierarchical levels, or the depth in the structure.) c) Spatially (the degree of the geographical separation among the work units.) a) HORIZONTAL COMPLEXITY: Horizontal complexity refers to the degree of differentiation between the organizations units/subunits in terms of the nature of work, requirements of skills and knowledge and employee orientations. Other terms used to describe horizontal complexity in research literature are differentiation, division of labor, departmentation and functional specialization. Horizontal complexity is often an organizations way of coping with increase in the quantum and complexity. They tend to break up their total task into specialized jobs and functions, which are then manned by personnel with specific expertise and skills. b) VERTICAL COMPLEXITY: Vertical complexity refers to the hierarchical levels that exist between the top management and the lowest level operations in the organization. Increase in vertical complexity is often the organizations response to increase in the horizontal complexity. When organizational activities become more and more segmented and specialized, it becomes more difficult for the different organizational subunits. To understand the part they play in the achievement of the total organization goal. Somebody is required to integrate and coordinate and ensure that the work is being performed according to the plan. This need for supervision and coordination results is increased vertical complexity.
SJBIT/MBA
Page59
If the number of hierarchical levels is more, the problems involved in managing the organization also increase, there is greater potential for distortion of communication across hierarchies, there is greater demand for coordinating the managerial decisions taken at different levels, and the senior levels of management become more distant from the operating core. On the other hand, the flat organizational structures have their own problems, such as more managerial pressures on the executives, lesser promotional opportunities, etc. And whether an organization should opt for a tall or flat organization would depend on a number of factors. c) SPATIAL COMPLEXITY: Spatial complexity refers to the degree to which the subunits and personnel of an organization are geographically separated. An organization may continue to have the same number of occupational roles and departments (horizontal complexity) and hierarchical levels (vertical complexity), but if it decides to geographically separate its activities, this would introduce additional requirements for control and coordination of these activities. These requirements arise out of increased spatial complexity. Many organizations cope with the spatial complexity by having their own corporate service, wireless system or hotlines. The advent of more efficient telecommunication systems and computer technology has also helped the organizations to overcome the problems of communication and coordination. The use of such corporate mechanisms however does not mean that the complexity induced by spatial separation can be eliminated. Rather, in devising methods to counter spatial complexity, organizations become more and more complex (e.g.. a new department would have to be setup to look after the courier service.) B) FORMALISATION Formalization refers to the degree to which jobs in an organization are standardized. Greater formalization would reduce the employees discretion in dealing with their work. By introducing detailed rules, meticulous work-procedures and clear job descriptions, organizations ensure that any input is handled in a standard manner so as to produce a uniform output. On the other hand, less formalization would mean that the jobs are less programmed and provide sufficient discretion to the employees to exercise choices in dealing with their work. There can be various reasons for an organization to introduce formalization: f) Formalization of jobs reduces the availability of outputs. By protecting the output from human and incidental variations, the organizations can ensure that its quality standards are maintained. As mentioned earlier, in most pharmaceutical companies, the sales presentation made by the medical representatives to the doctors is standardized to the extent of sales talk and even the gestures and intonations. This ensures that the representative is able to effectively communicate maximum information about the products to the doctors within the short appointment time. g) Formalization is one way of dealing with the complexity of management problems. If the work-process involves a number of specialized, but interdependent jobs, the need to coordinate these activities also increases. For example, a typical assembly line consists of a number of specialized operations which are linked with each other serially. By formalizing the activities for each work-centre on the assembly line, the organization achieves coordination among these activities. h) Formalization reduces the need for direct supervision and control. This helps by ensuring more time available to the manager for other planning and problem solving SJBIT/MBA Page60
activities. Once the specific jobs/activities have been standardized the manager need not get directly involved in routine supervisory activities, these can safely delegate down the line. Thus, formalization leads to more efficient use of the managers time. i) By reducing the discretions in doing the job, formalization also reduces the chance of mistakes occurring in the execution of the job. Mistakes, after all, means loss of money. j) Lastly, the greater the discretion in the performance of the job, the greater would be the need for exercising a judgment by the incumbent. Obviously, a job which entails a greater professional judgment would cost the organization much more in terms of the employees salaries, perks, benefits, etc. For example, if the job is to recruit and organize a work-force for maintaining a newly commissioned plant, without any formal guidelines whatsoever, finding the right incumbent might cost the organization a lot of money. On the other hand, if there are comprehensive guidelines for recruitment policies and procedures, this job can be handled by a less experienced person-naturally, at a lesser salary. Comparison of Organizational and Professional Formalization Organizational Formalization Usually achieved through procedures, job-descriptions, etc. Professional Formalization rules, Usually achieved through professional training. years of
Focuses primarily on molding the external Focuses primarily on the internal attitudes behavior of the individual. and orientations of the person. Based on punishments. extrinsic rewards and Based on internalized socialization. values and
Most often used for routine, unskilled Most often used for skilled, non-routine work. work.
Formalization Techniques e) Selection and Recruitment: The hiring practice adopted by the organizations is one of the most widely used method for controlling discretion and formalizing employee behavior. Organizations select their employees on the basis of certain well defined criteria. Besides assuring themselves that the person has the technical skills and qualifications. Organizations also assess the candidate through interviews, group discussions, background investigations, etc. to check how well the person will fit into the organization. The person is screened for his attitude, manners, work and social habits, even dress appearance. f) Role/Job Description: The specification with which the jobs are defined in the organization plays a crucial role in regulating employee behavior. Organizations make a considerable effort to create job descriptions which spell out the dos and donts of any job. These role definitions not SJBIT/MBA Page61
only describe what the job entails, but often also how the activities required for the job are to be performed. g) Rules and Procedures: Rules and procedures constitute a detailed program for guiding, molding and regulating the employee can or cannot do, whereas the procedures explicitly describe the sequence of behaviors an employee must go through to get anything accomplished within the organization. It is important to note that organizations have rules and procedures, not only for organizational work, but also for issues relating to the employees personal life. h) Training: One of the most widely accepted methods adopted by the organizations to instill desired behavior patterns among their employees is through conducting training programs. Many organizations except their freshly inducted employees to go undergo an induction program before allocating specific work assignments. This involves familiarizing them with the companys philosophy, history, procedures, personnel policies, etc. Such an induction program aims at communicating the opportunities as well as the constraints which an employee can expect to encounter while working for the company. IMPLICATIONS OF HIGH FORMALIZATION: The organizations designed on bureaucratic principles are characterized by high degree of formalization. In organizational where formalization is high: a) These devices will increase the profitability of conformance leads to an over concern with strict adherence to regulations which induces timidity, conservatism. b) Displacement of sentiments from goal onto means is fostered by the tremendous symbolic significance of the means (rules). c) This leads us to the primary dysfunctional forms of behavior found amongst bureaucratic persons. Bureaucratic behavior results when a person values the rules more than the goals of the organization. In organizational where formalization is low: a) Their members enjoy high degree of autonomy in using their own judgment in meeting the demands of their work. b) The employees are always encouraged to generate options and chose the one best suited to the needs of the specific situation. c) They have the operational freedom that helps them in adapting to complex, ambiguous and uncertain task and situation. C) CENTRALISATION The third building block of organizational design is the level of centralization (or decentralization) in decision making. Centralization/Decentralization is an important dimension of organizational effectiveness, since it refers directly to how appropriately and swiftly the organization is able to deal with critical issues and arrive at relevant decisions. Hage defined this dimension as the proportion of jobs whose occupants participate in decision making and the number of areas in which this participation takes place. Similarly, Reimann described centralization as reflecting the locus of decision making, with respect to major and specific policies, the degree of information sharing between levels, and the degree of participation in long-range planning.. SJBIT/MBA Page62
In the light of the above definitions, it is important to qualify our understanding of this concept with a few salient points: a) Centralization/Decentralization refers to the distribution of formal authority within the organization. It is quite likely that there are informal coalitions and leaders in the organization who may have influence over the decisions. This, however, cannot be interpreted as affecting the level of centralization in the organization. b) Centralization of decision making may be with a single person, unit or level. This single point, however, should be placed at a higher level in the organization. c) If decision making is delegated down the line, but there are elaborate formalized policies, systems and rules which constrain the discretion of the employees, this cannot be understood as decentralization. On the other hand, many organizations provide discretionary powers to the lower levels, but also develop information-systems to keep the top management aware of the decisions that are taken. If the information-system only helps the top management to monitoring without hindering with the decision making authority of lower levels, it cannot be understood as centralization. Thus, the centralization-decentralization issue needs to be understood in terms of the amount of discretion available with the decision-maker rather than the point at which the decision is being taken. CENRALIZATION AND DECENTRALIZATION It would be simplistic to treat centralization and decentralization either as choice in the organizational design. As we saw in the previous section, there are various shades and levels of centralization (or decentralization). Thus, there is no totally centralized or decentralized organization. Rather in practice, the designing decision focuses on the specific activities and decision areas which need to be centralized or decentralized, and the extent to which this would be appropriate for organizational effectiveness. In order to take such designing decisions, one must be aware of the relative advantages and disadvantages of centralization and decentralizations. Classical organizational theorist, Fayol, argued for a balance between the two, which of course, is a truism. The critical issue is the side towards which the balance should tilt. Many recent writings (e.g, Toffler, 1981; Huber, 1984; Naisbitt and Auberdene, 1985, etc.) point out the need for greater decentralization in the coming times. They argue that with the increasing complexity of demands in the organization, it would no longer be feasible to centralize the decision making process. Organizational decisions would require more heterogeneous inputs, swifter implementation and greater flexibility. SPAN OF CONTROL: It refers to the number of subordinates with report directly to a superior to facilitate vertical coordination and effective supervision of sub ordinates. The concept of span of control is important because it defines the number of levels in the management. In small or flat organization normally span of control varies from 5 to 25 from top management level to junior management level. FACTORS INFLUENCING/ (DETERMINING SPAN OF CONTROL) a) Skills and abilities of the managers and employees. b) Characteristics of the work being done/nature of jobs. c) Training and experience of the work being done/nature of jobs. d) Simplicity of employees tasks. SJBIT/MBA Page63
e) f) g) h) i) j) k) l) Complexity of employees tasks. Physical proximity of subordinates. Degree to which standardized procedures are in place. Sophistication of organizations information system. Strength of organizations culture. Preferred style of the manager. Rate of change of activities and personnel. Clarity of instruction and delegation.
DYNAMIC BALANCE: A sound organization should seek to establish balance between various subsets of the organization. Work system, technology, structure, process, people, organization and environment. All the subsets are in a state of continuous flux and constant change. Therefore achieving balancing amongst them has to be a dynamic process built into the design of the organization. In other words, the organization design must be flexible enough to allow adjustments as and when any or all subsets undergo change. The design of organization must thus seek to establish congruency amongst the following subsets. a) Individual-Organization: Individuals join organization to seek satisfaction of their needs and pursue their own goals. Organizations on the other hand have their own set of goals and tasks to accomplish. There may often be conflict, for example between the need for autonomy that individuals value most and demand of conformity to standardized procedures of the organization. The tightly structured organizations will not be conducive for employees to use discretion, and take high risk decisions. An individual organization environment will have to be created by building in flexibility in the structure and processes so that employees can take initiatives and use their own judgments. The design of the organization should seek to integrate the individual goals with the goals of the organization to be able to obtain commitment from the employees. b) Individual-Work: The work system is conveniently designed to meet the techno economic criteria of efficiency based on the assumption of supremacy and technological imperatives. Human needs are considered to be subservient to the technological requirements. Most individuals however seek the satisfaction of their higher level needs of learning growth and accomplishment and selffulfillment. The design of work must incorporate these concerns to enable employees to give their best to the organization. The design of work based on assembly line concept for example gives rise monotony and boredom resulting in reduced job satisfaction. Frustration sets in as employees attempt to pursue their higher level needs gets thwarted. Finding an optimum fit between the needs, expertise and skills of the employees and the work organization is yet another challenge in most organizations. c) Work-Organization: The design of jobs and work units needs to be derived from the strategic objectives of the organization. Grouping of various activities and tasks should respond to such concerns as cost, quality, speed and employee involvement. There are three basic approaches being adopted by SJBIT/MBA Page64
organizations based on strategic considerations. First is the approach based on classical theory where task is broken up into smaller components, operations are standardized and tight managerial control is exercised. The second approach is process design often called process reengineering. The focus here is on design of work processes asset of related activities leading to creation of value added product or services to customers. The third approach can be called high performance work systems which combine both the process design and the concept and selfmanaging teams with overlapping and interchangeable responsibilities. The choice of work unit design should be consistent with the strategies that an organization pursues and motivational requirements of the employees. d) Organization-Environment: Organizations as open systems are in continuous interaction with the environment such that their survival depends on the extent to which their strategies, structures, processes and culture are aligned with the relevant segments of the environment. As the environment is always in a state of flux, it is imperative on the part of the organization to adjust to the emergent demands by adjusting change in various components of internal systems. With increased pace of change in Information Technology, for example, it is necessary for an organization to restructure it to enable adoption and successful implementation of IT enabled services. Likewise the growing pressure on organization to conform to ethical standards has increased accountability and transparency in organization. These forces have caused a great sense of urgency to effect in the internal system of working of an organization. A) ADVANTAGES OF SPAN OF CONTROL a) Significant reduction in administrative costs. b) More effective and efficient organization communication. c) Faster decisions and closer interaction. d) Recruitment such that all personnel become a better trained, informed and educated. e) Better leadership at all levels. DISADVANTAGES OF SPAN OF CONTROL a) Cost of additional layers of management b) Increased complexity of vertical communication c) Encouragement of overly tight supervision and discouragement of employee autonomy. B) ADVANTAGES OF DIVISION OF LABOUR a) High efficiency b) Low skill requirement c) Less time and cost in training d) High standardization and uniform output DISADVANTAGES OF DIVISION OF LABOUR a) Routine tasks leading to monotony b) High costs of supervision c) Full potential not utilized d) Low job satisfaction e) Lack of identification with total problem/process SJBIT/MBA Page65
f) No learning challenges g) Increased need for co-ordination and control
C) ADVANTAGES OF DEPARTMENTALIZATION a) Skill development b) Economies of scale c) Good co-ordination d) High efficiency DISADVANTAGES OF DEPARTMENTALIZATION a) Lack of communication across departments b) Employees identity with the department will be less c) Slow response to external demands d) Narrow specialization D)RELATIVE ADVANTAGES AND DISADVANTAGES OF CENTRALIZATION AND DECENTRALIZATION: Centralization Advantages: Uniformity of policies, standards and actions. Decentralization Advantages: Greater flexibility and appropriateness responding to local situations. in
Enables closer control and coordination. Maximizes economies duplication. of scale;
Allows top management to focus on policy issues.
eliminates Facilitates intra-unit communication.
Reduces risk-factor in decision making by less Increases morale and commitment. Creates informed or less skilled subordinates. healthy competition among units. Disadvantages: Causes alienation and lack of initiative. Disadvantages: Causes conflicts of goals and interests among units.
E) ADVANTAGES OF FORMALIZATION: a) Formalization of jobs reduces the availability of outputs. b) Formalization is one way of dealing with the complexity of management problems. c) Formalization reduces the need for direct supervision and control. d) Formalization also reduces the chance of mistakes occurring in the execution of the job. SJBIT/MBA Page66
DISADVANTAGES OF FORMALIZATION: a) High formalization leads to an over concern with strict adherence to regulations which induces timidity, conservatism. b) High Formalization leads us to the primary dysfunctional forms of behavior found amongst bureaucratic persons. Bureaucratic behavior results when a person values the rules more than the goals of the organization. c) And in organizations where formalization is low, their members enjoy high degree of autonomy in using their own judgment in meeting the demands of their work. FLEXIBILITY: The design of the organization should be flexible enough to allow for adaptation to changing demands of the environment by realigning various subsystems or components of the organization. No organization exists in a truly static and homogenous environment. Therefore all organizations need to be flexible and adaptive. The design based on narrow individual specialization places constraints on the flexibility in redeployment. Organizations designed around teams consisting of members with broad multiple skills are better placed to optimally utilize the available skill sets in undertaking variety of tasks. Broad framework of rules provides operational freedom to employees enabling them respond to engineers of work arising out of increased uncertainty. Single rigid hierarchical structure places constraints on adopting new technologies and diversifying activities. Innovation that is the ability to generate more effective and efficient ways of operating the key to success of organization in a hyper competitive environment. Structure should encourage innovation through rearrangement of organization resources and adoption of appropriate communication and information system. Structure can provide for decentralization which allows for the placement of decision centers closest to the source of problems. Structure can encourage changes in the organization processes as required. Finally, structures itself should change in response to the environment and needs of the organization.
------------------------------------************************---------------------------------
SJBIT/MBA
Page67
MODULE 4 Contextual Dimensions & Structural Options: Contextual Factors, types of structure, Influence of: Environment, Strategy, Size & Technology and Power & Politics on Structure, Flat structure Structural dimensions: Centralization -the extent to which functions are dispersed in the organization, either in terms of integration with other functions or geographically Formalization - regarding the extent of policies and procedures in the organization Hierarchy - regarding the extent and configuration of levels in the structure Routinisation - regarding the extent that organizational processes are standardized Specialization - regarding the extent to which activities are refined Training - regarding the extent of activities to equip organization members with knowledge and skills to carry out their roles Contextual Dimensions: Culture - the values and beliefs shared by all (note that culture is often discerned by examining norms or observable behaviors in the workplace) Environment - the nature of external influences and activities in the political, technical, social and economic arenas Goals - unique overall priorities and desired end-states of the organization Size - number of people and resources and their span in the organization Technology - the often unique activities needed to reach organizational goals, including nature of activities, specialization, type of equipment/facilities needed, etc. ORGANISATIONAL STRUCTURE: It is the formal network by which jobs/tasks are divided, grouped and coordinated. It reflects formal relationships among groups and individuals. It provides guide lines for effective employee performance and overall organization success. Structure is a means for attaining the objectives and goals of an institution. Any work on structure must therefore start with objectives and strategy. FIVE APPROACHES TO ORGANIZATION STRUCTURE: Managers must make choices about how to group people together to perform their work. Five common approaches functional, divisional, matrix, team, and networkinghelp managers determine departmental groupings (grouping of positions into departments). The five structures are basic organizational structures, which are then adapted to an organization's needs. All five approaches combine varying elements of mechanistic and organic structures. For example, the organizational design trend today incorporates a minimum of bureaucratic features and displays more features of the organic design with a decentralized authority structure, fewer rules and procedures, and so on. A) FUNCTIONAL STRUCTURE: The functional structure groups positions into work units based on similar activities, skills, expertise, and resources. Production, marketing, finance, and human resources are common groupings within a functional structure. SJBIT/MBA Page68
The functional structure As the simplest approach, a functional structure features well-defined channels of communication and authority/responsibility relationships. Not only can this structure improve productivity by minimizing duplication of personnel and equipment, but it also makes employees comfortable and simplifies training as well. But the functional structure has many downsides that may make it inappropriate for some organizations: They are: d) The functional structure can result in narrowed perspectives because of the separateness of different department work groups. Managers may have a hard time relating to marketing, for example, which is often in an entirely different grouping. As a result, anticipating or reacting to changing consumer needs may be difficult. In addition, reduced cooperation and communication may occur. e) Decisions and communication are slow to take place because of the many layers of hierarchy. Authority is more centralized. f) The functional structure gives managers experience in only one fieldstheir own. Managers do not have the opportunity to see how all the firm's departments work together and understand their interrelationships and interdependence. In the long run, this specialization results in executives with narrow backgrounds and little training handling top management duties. B) DIVISIONAL STRUCTURE: Because managers in large companies may have difficulty keeping track of all their company's products and activities, specialized departments may develop. These departments are divided according to their organizational outputs. Examples include departments created to distinguish among production, customer service, and geographical categories. This grouping of departments is called divisional structure. These departments allow managers to better focus their resources and results. Divisional structure also makes performance easier to monitor. As a result, this structure is flexible and responsive to change.
SJBIT/MBA
Page69
The divisional structure However, divisional structure does have its drawbacks. Because managers are so specialized, they may waste time duplicating each other's activities and resources. In addition, competition among divisions may develop due to limited resources. C) MATRIX STRUCTURE: The matrix structure combines functional specialization with the focus of divisional structure. This structure uses permanent cross-functional teams to integrate functi
The matrix structure SJBIT/MBA Page70
Employees in a matrix structure belong to at least two formal groups at the same timea functional group and a product, program, or project team. They also report to two bosses one within the functional group and the other within the team. This structure not only increases employee motivation, but it also allows technical and general management training across functional areas as well. Advantages include: Better cooperation and problem solving. Increased flexibility. Better customer service. Better performance accountability. Improved strategic management. Predictably, the matrix structure also has potential disadvantages. Disadvantages Include: The two-boss system is susceptible to power struggles, as functional supervisors and team leaders vie with one another to exercise authority. Members of the matrix may suffer task confusion when taking orders from more than one boss. Teams may develop strong team loyalties that cause a loss of focus on larger organization goals. Adding the team leaders, a crucial component, to a matrix structure can result in increased costs. D) Team structure Team structure organizes separate functions into a group based on one overall objective. These cross-functional teams are composed of members from different departments who work together as needed to solve problems and explore opportunities. The intent is to break down functional barriers among departments and create a more effective relationship for solving ongoing problems.
The team structure SJBIT/MBA Page71
The team structure has many potential advantages. Advantages Include: Intradepartmental barriers break down. Decision-making and response times speed up. Employees are motivated. Levels of managers are eliminated. Administrative costs are lowered. Disadvantages Include: Conflicting loyalties among team members. Time-management issues. Increased time spent in meetings. Managers must be aware that how well team members work together often depends on the quality of interpersonal relations, group dynamics, and their team management abilities. E) Network structure The network structure relies on other organizations to perform critical functions on a contractual basis. In other words, managers can contract out specific work to specialists.
management information
Accountsrecevablesand billing
companycore
Security
BenifitAdministration
The network structure This approach provides flexibility and reduces overhead because the size of staff and operations can be reduced. On the other hand, the network structure may result in unpredictability of supply and lack of control because managers are relying on contractual workers to perform important work. MACHINE BUREAUCRACY Machine bureaucracies are probably the most popular, and yet most criticized of all organizational structures. Indeed, the most popular connotation of bureaucracy is that of a giant, inefficient and impersonal system. And yet, without such bureaucracies there would be no railways, transport more than one crore people every day from one place to another, no postal department to deliver crores of letters or mass manufactured consumer goods industries or public utilities. SJBIT/MBA Page72
Machine bureaucracies are characterized by coordination of work through a high degree of standardization of work, which results in low-skilled, highly specialized jobs. This standardization is maintained by laying down extensive formalized rules and procedures for regulating organizational activities and work-flow. The division of labour is sharp, and activities and roles are divided into functional groups. Since the whole organization depends on standardization of behavior, technostructure is the key element of this configuration highly elaborated and differentiated(ex: industrial engineers, quality engineers, financial analysts, cost and works accountants whose sole task is to develop norms of work behavior and activities, and to ensure greater effeciency and reliability on others work. To ensure implementation of rules, procedures and systems, these organizations also develop a very large and elaborate middle management cadre. The middle management is also functionally grouped, so that the formal power and control is centralized at the top. Since the smooth functioning of machine bureaucracies is always threatened by changes, they tend to seek stable environments to function, as well as to stabilize the environments in which they operate. The Indian Railways: Worlds Largest Machine Bureaucracy The Indian railway is the largest railroad network in the world, with its tracks covering a stretch of 62,000 km. It transports almost one crore people every day, and carries almost about 30 million tons of freight every year and all this at a ridiculous low rate. To provide such a large volume of service, the organization employees about 1.62 million people, making it the single largest employer in the world. The supervisory and managerial cadres of the railways comprises of about 27000 people, who manage its 11 functional department and 9 operational zones. Over the years, while some operational decentralization has taken place, the functional hierarchy of commands and centralization is maintained. For instance, the railway does its own collection and accounts of cash received, brings it to a central organization before depositing in the bank. Similarly, the disbursement of salaries is still predominantly done though cash, with the cashier going to the outline station and handling over the salaries to the employees in their hand. The complexity of the structure can be gauged from the fact that there are about 700 job categories in the organization, which is spread over its 58 division. Apart from the 1000s of railway station across the country, the railways has about 60 technical maintenance work shops, 5 central training institutes, about 150 odd training centers and schools and a centralized R&D facility. In addition to all this, there are also many misc department such as stationary, printing, rubber technology, mining , engineering, chemical etc . That is why, one often finds them maintaining a large support staff cafeteria, transport, townships, hospitals, legal councils, etc. which helps them in influencing and stabilizing their environment. It is for this reason also, that this organization tend to integrate vertically. It is not surprising that these organization tend to grow very large. In a way, the size is an asset for them, since it gives them sufficient resources not to get influenced by miner fluctuation in the environment. On the other hand , this stability also encourages them to further bureaucratise themselves in order to control their work activities. It is these characteristics which make these organizational configurations deal for producing goods and service on a large scale in a reliable manner. As long as the environmental demands remain simple and predictable, machine bureaucracies are probably the best instruments of doing things economically and efficiently. By substituting rules and procedures for decisions, they work on low requirements of operational and managerial skills, thereby saving costs. Their large sizes and volumes help them in achieving economies of SJBIT/MBA Page73
scale. On the other hand, by fractionalizing and segmenting the jobs, they also create monotony and inter-functional conflicts. Strengths and Weakness of Machine Bureaucracies Strengths: a) Achieves efficiency through specialization b) Encourages development of functional expertise c) Low cost of operational and managerial expertise d) Centralize strategic decisions giving a focus to organization e) Large size and standardization promotes stability Weakness: Promote narrow functional specialization and potential functional rivalry Experience difficulties in inter-functional coordination and decision making High costs of coordination and support Limit internal development of general managers Find difficult to innovate and adequately respond to environmental changes PROFESSIONAL BUREAUCRACY These are complex tasks, requiring sophisticated skills, yet they have to be performed on a routine basis and on a mass scale. To achieve this end, organizations develop a structural configuration which Mintzberg termed it as professional bureaucracy. These configurations are similar to machine bureaucracy because their work processes and activities are highly standardizes and routinized. But this is where the similarity ends. While the machine bureaucracy coordinates through the standardization of work, the professional bureaucracy achieves the same aim by standardizing the skills. That is, instead of exercising control and coordination through enforcing rules and procedures, these organizations achieve reliability of performance by employing trained professionals to mangege their operating core because it largely involves complex skills and cannot be broken into smaller low-skilled tasks. Hospitals, universities, and institutions of higher learning(IITs and IIMs), consultancy agencies, chartered accountancy firms, research organizations, etc are typical examples of professional bureaucracies. Strengths and Weakness of Professional Bureaucracies Strengths: a) Can accomplish complex, but known, tasks efficiently on a large scale. b) Provides conducive work environment for professional c) Is a democratic structure which can successfully tap specialized expertise for organized purpose. Weakness: a) Would find it difficult to innovate. b) Norms of profession supersede internal authority in organization functioning c) Internal politics and rivalry among professionals may lead to loosing synergy and focus
SJBIT/MBA
Page74
ADHOCRACY Adhocracies are characterized by a high amount of complexity, non-standardisation and fluidity of processes. Given the innovative nature of work, any kind of standardization is difficult. To manage the complexity of job requirements, these organizations employ highly specialized and trained experts, and work with low levels of formalization in a highly organic manner. They cannot rely on standardized skills for achieving coordination. Coordination is achieved through mutual adjustment. Mintzberg distinguished between two kinds of adhocracies: The operating adhocracies and the administrative adhocracies. Operating adhocracies: (they take up projects on behalf of clients and the treat clients problem as unique requiring a creative solution. They create an organic as whole, in which managers, staff and operating experts work together as a project team in highly fluid relationships. Administrative adhocracies: (They take up projects on its own behalf).Here the innovative work is carried out by a team comprising of managers and staff experts, while the operating component, which executes the ideas, works separately in a standardized manner. Strengths and Weakness of Adhocratic Structures Strengths: a) Encourage innovation and initiative b) Are flexible and responsible to changing environments c) Discourage empire building through cutting across functional role/boundries d) Provide a good training groung for strategic managers Weakness: a) Are inefficient in utilization of resources b) Increase stress through inherent role ambiguity c) Encourage people tto use political means for achieving their ends d) Weak control structure and low personal accountability ENVIRONMENT: Environment is everything outside an organizations boundary. Its concern is about specific environment that are more relevant to the organization. Management desires to reduce uncertainty created by this specific environment. ORGANISATION ENVIRONMENT What is Environment? Miles (1980) said about the organizational environment as Just take the universe, subtract from it the subset that represents the organization, and the remainder is environment. One needs greater analytical rigor for understanding the organizational environment. The above definition describes the general environment, which includes a wide array of factors, ranging from the state of economy to such influences as the state of technology, cultural factors, etc.
SJBIT/MBA
Page75
ENVIRONMENTAL IMPACT ON ORGANIZATIONS: In spite of the complications which one faces in trying to define what exactly would constitute an organizations environment, different kinds of environments do have a more or less discernable, even predictable, influence on the organization(its structure, control systems, culture etc.) Organizations have a tendency to mould themselves to adapt to the environment. There are three important frameworks which environmental forces influences and mould the organization. A] Burns and Stalker: The Mechanistic and Organic Organizations Their findings state that organizations operating in stable environment are very different from those which have to face a changing dynamic environment. They coined two terms, mechanistic and organic system of management. A comparison of the characteristics of Mechanistic and Organic Organizations: Points Of Difference Nature Of Environment Task of Definition Organic Relatively dynamic, complex and uncertain Tasks are loosely defined in context of overall organizational goal, need redefinition through continuous interaction among members Vertical, primarily to Lateral, primarily to share communicate decisions and information and solve give instructions problems Position based Expertise based Hierarchical and impersonal Reciprocal; through (through rules, procedures etc) interpersonal negotiations and contracts Autocratic, programmed, Participative, noncomputational programmed, judgmental High Low High Low Mechanistic Relatively stable, simple and predictable Tasks are segmented from each other and isolated from the overall organizational goals; rigidly defined into specialties
Communication
Authority Control Mechanisms
Decision-making Formalization Centralization
Burns and Stalkers classification describes a polarity and not a dichotomy. Their descriptions of the mechanistic and organic structures corresponded to two ideal types. Most organizations actually face environment which are either relatively stable or relatively changing and therefore contain characteristics which are of both the types. It has also highlighted that the basic tenet of managerial wisdom that there is no ideal organizational form to suit all environmental contexts. B] Lawrence and Lorsch: Differentiation Integration Theory Another significant study to demonstrate the relationship between environmental characteristics and effective organizational structures was conducted by P.R Lawrence and J.W Lorsch(1967). Lawrence an Lorsch sought to identify the influence of uncertainty in an organizational external environment on its internal environment. They expected that successful and effective organizations would be able to better match their internal environments with the demands of the SJBIT/MBA Page76
external environment. The level of environmental uncertainty was assessed by looking into such factors as how fast the environment is changing, how much information the management has about the environment, how quickly an how frequently does the organization gets a feedback fro the environment on its actions and so on. To assess the internal organizational environment, Lawrence and Lorsch postulated two dimensions, differentiation and integration. They defined differentiation as both the degree of horizontal complexity, as well as the diversity of attitude, perceptions and interpersonal orientations among the organizational members. Thus, highly differentiated organizations will be characterized by more number of functional departments, more jobs requiring specialized skills, high task segmentation and so on. The other dimension, integration described the degree the manner in which different organizational units and departments collaborate to achieve unity of efforts. A well integrated organization would show a high degree of consistency and coordination in the efforts of various units. Lawrence and Lorsch found a striking relationship between the environmental uncertainty and the way in which organizations manage their internal environment. Their findings were: a) The greater the environmental uncertainty, the greater is the differentiation within the organization. b) These differences in the interests and orientations of the organizational members and units also create difficulties in achieving collaboration and consensus among them. This creates a need for integration. c) Organizations can have a variety of integrative mechanisms. Hierarchy, rules, and procedure are the most basic means of achieving unity of efforts. d) Lawrence and Lorsch also found that as the need for integration becomes more important for an organization, more managerial manpower is required to look after integration function. C] Duncan: A Model for Right Organizational Structure In 1979, Robert Duncan published an article in Organization Dynamics, proposing a comprehensive framework for understanding the design options one has for coping with different types of environments. He viewed organizational structure as an informing-processing device, which links the elements of organization by providing the channels of communication through which information flows. Viewed in this manner, an effective organization structure would be which is able to cope with the information-processing demands of in the environment.
SJBIT/MBA
Page77
Four Task Environments and their Organizational Structures (Based Robbins, 1987) 3. Moderately high 4. High Perceived Uncertainty perceived uncertainty D : Low Complexity : Low Y Complexity Formalization : Low N Formalization : Low Decentralization A Centralization M E.g.: Small entrepreneurial E.g.: Advertising firms, C I Firms. R&D units, Task Forces. H C A N 1. Low Perceived 2. Moderately low perceived G uncertainty uncertainty E S T Complexity A Complexity Formalization Formalization B Centralization Decentralization L E E.g.: mass production E.g.: Multi product firms, Manufacturing Hospitals Companies, Bureaucracies Simple Complexity Complex
STRATEGIES FOR MANAGING ENVIRONMENT There are numerous other strategies which the organizations use for certainty reduction. While some of these do get translated into structural changes, many of these dont. In fact, organizations often evolve these strategies for managing their environment so as to avoid making structural changes. Let us consider some of the most popular options: Domain Choice: Organizations can, and often do, change their domain of operations to change their operating environment. In doing so, they also avoid facing the uncertainties inherent in the previous domain. Many organizations move into markets where there is lesser competition, select products/technologies for which raw material is easily available, or go into the areas which invite less stringent government regulations, and so on. For example, Asian paints strategy, in its initial years, to cater primarily to the rural segment of the market had the obvious advantage of avoiding competition from the multinationals, which were the major players in the paint market at that time. SJBIT/MBA Page78
Recruiting: Recruiting the kind of people is a popular and effective method employed by organization to counter the environment uncertainty. Obviously, an organization which competent and skilled persons manning its key positions would have an advantage in dealing with the environment. For example the Essar Group, in its drive to professionalize itself, inducted for its key positions, persons who had vast experience of managing core-sector projects. Organizations, however, do not always recruit people only for their professional competence. Hiring employees from the competitors organization, for example, has the additional benefits of access to strategic information (which may, in fact, be more important than the hired persons competence.) Likewise, it is quite common to come across employment advertisements for senior financial and administrative posts, inviting applications from people retired from government service or financial institutions. Vertical Integration: This strategy refers to extending organizational control over the input and/or output ends of the environment by incorporating them into organizational boundaries. If the company decides to start manufacturing its own raw materials, instead of relying on the suppliers for the inputs, it is known as backward integration. Likewise, if the organization decides to control the output end it is known as forward integration. Buffering: Vertical integration requires high investments, and it may not always be possible for the organization to use such a costly method for controlling environmental fluctuations. An alternative is to create buffers at the input and output ends to take care of the variations in the demand and supplies. Buffers protect the basic operating functions, e.g., production, from getting affected by environmental changes. For example, organizations maintain high inventories or raw material and spare parts, so that market fluctuations in their availability do not hamper with the core manufacturing process. Smoothening: This is yet another strategy which helps the organization to level out the impact of environmental fluctuations. The example of Business Today, given at the beginning of this chapter, is one such instance of smoothening. By offering a heavy discount on the annual subscription over the newsstand price, the magazine attracted a large number of annual subscribers, and thus, smoothened the demand. Smoothening is often an effectively used to counter an environment where fluctuations in demand are predictable, but extreme. That is, the organization has to deal with overload at one time and under-utilization at another. By offering attractive incentives to the customer, the organization manages to even out the load between extremes to manageable limits. Advertising: Advertising is an effective and popular way of copying with, and even influencing, the environment. Effective advertising aim at luring the customers to buy the product/service and thus, helps in creating brand loyalty, reducing competitive pressure, and thereby stabilizing demand. For example, the success of Pan Parag (which increased its sales from a mere Rs. 43 lacs in 1984-85 to more than Rs. 70 crore in 1989-90), is largely attributed to its Rs. 2 crore annual expenditure on advertising. Contracting: It is possible for the organization to control the organization to control key elements of the environment by entering into a contract with them. Long-term fixed contracts, either for purchase of supplies or for sale of outputs, protect the organizations from the vagaries of the SJBIT/MBA Page79
environment. Similarly, many organizations, in the business of soaps, confectionaries, paper napkins, etc. enter into long-term contracts with different hotels as suppliers. Mergers/Acquisitions/Strategic Alliances: These strategies, which can be generally termed as coalescing (Robbins, 1987), are becoming more and more popular in our country, particularly so since the change in the government policies have lessened the monopoly restrictions. Similarly, the strategic alliance between Godrej Soaps Limited and Proctor & Gamble India Ltd in January 1993 was aimed at to give both companies a competitive advantage. Lobbying: By attempting to get a favorable environment, (in terms of concessions, financial support, quick clearances, etc.), organizations are able to exercise a certain amount of control of over the environmental uncertainties. While individual companies are known to have varying amount of political/government connections, a fair degree of lobbying effort is above-board and quite normal. In many industrial sectors, organizations join together to form federations, consortiums and associations as a means of influencing the environmental elements which they have to face together. STRATEGY Strategy is an integrated functional plan in response to a problem perceived to be thrust upon the company by the environment, or in response to initiation of the corporation to change the impact of the company which the company wishes to have on the environment. Strategy-Structure Link: The strategic choice of an organization not only determines its response to the environment, but also has a significant influence on the happenings within the organization. According to Drucker structure is a means for attaining the objectives and goals of an institution. Any work on structure must therefore start with objective and strategy. In a study by chandler he found that as organization grows from single product company to multiple company products companys structure also changes in a consistent manner. Small companys initially have low complexity and less formalization and as it grows large companys have high complexity and high formalization. Chandler concluded by telling strategy is a point towards the ends, then structure provides the means to achieve those ends. There should be a synchronization between the means and the ends. Strategic Choices: The organization behavior studies which have dealt with specific structural reforms carried out by organizations to meet the environmental pressures. The viewed successful strategy implementation as a process of establishing internal mechanisms (roles, systems, structure, managerial process etc.) Thus strategic decision making process is essentially an adaptive process aiming at maintaining an effective alignment with the environment. Miles and Snow identified three basic problems which the organization must identify, confront and solve inorder to successfully adapt to the environment. These are: a) Entrepreneurial problem(organization domain, product or services) b) Engineering problem(selection of an appropriate technology) SJBIT/MBA Page80
c) Administrative problem(rationalizing and stabilizing of the activity) Miles and Snow described a framework for classifying organization according to their strategic choices. They identified four essential strategic types of organization. They are: a) Defenders: They aim at achieving stability in their market environment. They end up creating a stable domain by learning how to seal off a portion of the market. How to produce and distribute good. How to achieve strict control of the organization b) Prospector: They function in a perceived operating environment which is dynamic and uncertain. They are antithesis of the defender. They involveou in locating and exploiting new product. How to avoid long-term commitment. How to facilitate rather than control. c) Analyser: While the defender and prospector represent the two ends of the strategic continuum, analyzers fall somewhere in between representing a unique blend of two. They try to minimize the risks(a defenders stance) while maximizing the opportunistic for profits( a prospectur characteristic). They involve in locating and exploiting new product. How to be efficient in stable portion of the domain. How to differentiate the organization structure and processes to accommodate both stable and dynamic areas of operation. d) Reactor: A fourth strategic pattern, which inevitabaly contributes to organizational failure. It is when the top management has not clearly articulated the organization strategy. The management has not fully shaped the organization structure and process to fit the chosen strategy. Conclusion: It is not enough to think about the strategy implementation as only a matter of strategy and structure. The wisdom is if you first get the strategy right, the right organization follows.
TECHNOLOGY Technology refers to the manner in manner in which organizational input is transformed into output. It deals with the information, equipment, techniques and processes required to achieve this transformation. Whether the organization is a manufacturing firm, advertising agency, hospital, bank or a trading house, it will use some sort of technology to transform its inputs (skills, machines, material, or money) into viable products or services as its outputs. An automobile company, for example, uses technology to convert the raw materials into vehicles, just like a bank uses techniques and processes to convert money, ideas, human labour and skills to provide banking services.
TECHNOLOGY AND STRUCTURE: a) Effectiveness of an organization depends on the fit between technology and structure. b) Technology are in general are of four types: Routine, engineering, craft and non-routine. c) More routine the technology, the more highly structured the organization should be. d) Technological based organization design, need to go through, job level research to formulate the functions and job design. SJBIT/MBA Page81
e) Routine technology is positively associated with low complexity. Nature of Technological Influences: Thompson and Perrow provided a broad framework for understanding the nature of technological influence. A) Technological Complexity: (Woodward Study) Joan Woodwards was a pioneering work on technological determinism of the structure. She studied 100 marketing organizations in England. Her focus was to relate organization structure(extent of formalization, span of control) with organization effectiveness. Initially she didnt find any big difference. But when she grouped these organizations according to their production technologies the relationship between structure and effectiveness became apparent. She found that organizations employing different production technologies required different structures in order to be effective.. That is, organization effectiveness turned out to be function of technology-structure fit. She classified technology in terms of levels of complexity. (Small unit, mass production and continuous process technologies.) B) Technological Interdependence: (Thompsons contribution) Thompson viewed technology as fulfilling the function of linking theorganizational sub-units. Based on his work, he suggested that different technologies are characterized by different structural arrangements. Because it helps in determining appropriate strategies for uncertainty reduction. To fully understand his contribution it is necessary to acquaint with his concepts of interdependence and co-ordination. Interdependence refers to the manner in which the organizational sub-units are arranged, so that they can effectively contribute to the organizational task. Three types of interdependence are as follows: a) Pooling: Here the coordination would be achieved by standardization b) Sequential: Here the output of each happens to be the input of the other sub-unit. And the coordination is achieved through proper planning. c) Reciprocal: Here the output of the sub-units become inputs for each other. Generally in complex organizations. And the coordination is achieved through mental adjustment. Also he proposed three kinds of technologies, which were differentiated by the nature of organization task and interdependence among its units. a) Mediating Technology: This technology links the input and output ends of the organization. Ex: Depositors----Bank-----------Borrower. b) Long-linked technology: This technology is characterized by a fixed sequence of repetitive steps. Ex: Mass production assembly line. The tasks and operations in this technology are sequentially interdependent. Here output becomes the input to other unit. Purchase-production-quality control-marketing department. c) Intensive Technology: This technology is designed to meet the requirement of complex tasks, in which a variety of problems cant be predicted accurately beforehand, i.e, the problem arises during the process of activities. Each of such problems requires a unique combination of knowledge, skills and technique. Ex: major construction projects, R&D units, hospitals etc. SJBIT/MBA Page82
C) Technological Uncertainity: Perrow came out with a framework which described how technological uncertainity or lack of it determined the organization structure. According to Perrow, two aspects of technology which have a bearing on the organization structure are: a) The task variability( the number of problem or exception encountered in performing the task). b) The problem analyzability( the type of search for solution which is required when an excetion does occur). Managerial options for Technological change: a) Combine tasks(skills variety and task variety) b) For making natural work units( Task identity and task significance) c) Establishing client relationship (Skills variety, autonomy, feedback fron job) d) Expanding job vertically (Autonomy) e) Opening feedback channels (feedback from the job) ORGANIZATION POWER AND POLITICS Significance of Power and Politics in Organizations Power inequality and the political struggle and conflicts surfacing in organizations is very common and at the same time inevitable. The hierarchical and authority-based nature of the organizations need to optimize, leading to struggle for resources, etc. makes them ideal grounds for exercising legitimate and illegitimate influences. The power relationships among the organizational members, further encourage them to adapt political means for achieving personal and organizational goals. Power, after all, refers to ones ability to influence flows of available energy and resources towards certain goals as opposed to other goals. In this sense, both political skills and power serve similar functions. Both refer to the ability to influence, and both can be equally legitimate or illegitimate goals. The difference, probably, lies in the means of influence: exercising power would involve the use of legitimate means (ones position, expertise, reward and punishment, etc.), whatever are the ends, while political skills refer to the use of legitimate means (withholding information, integrating game-playing, etc.) to achieve ends, which may be quite legitimate. Undoubtedly, politics in organizations has dysfunctional consequences; it wastes organizational energies, is used to resist necessary changes (or to bring about those changes which are not required), creates unnecessary stress, hampers with goal achievement, and so on. But it would be equally unrealistic to ignore the positive contributions which power-politics makes to the organization. Mintzberg (1989) argued that politics has atleast four functional uses in organizations: a) Politics ensures that the stronger members of the organization are brought into positions of leadership (specially, since bureaucratic structures and autocratic superiors tend to suppress strong subordinates.) It allows those with more initiative and competence to prove their worth by getting ahead and to start taking organizational responsibilities matching with their potential.
SJBIT/MBA
Page83
b) In organizational decision making, tendency of those in authority is to present a one-sided case on many issues. Politics ensures that all sides of the issue come to surface and can be debated. Thus, politics can provide an alternative way to a more democratic functioning. c) Most organizational changes are resisted by the established systems of authority (the vested interests), for whom the change is threatening. Politics turns out to be necessary for removing these blocks to the required changes. d) Political skills of the skills of the executive are also necessary to make it easier arrive at and implement decisions. Effective executives do need to rely much on their skills of persuasion, negotiations, making trade-offs, building networks, etc., to achieve perfectly legitimate organizational goals. The structural determinants of organizational power are as follows: a) Hierarchical Position: The most common base of power is the position. This position gives him formal authority to influence his sub-ordinates behavior by legitimately demanding compliance and by sanctioning rewards and punishments for performance. The higher the position the more power one is likely to exercise. b) Non-Routineness: If a job is of routine nature, it is more likely to be controlled through standardization of work procedures. This would decrease the degree of freedom which the occupant can exercise. A non-routine job, on the other hand allows the person performing the job a higher degree of autonomy and flexibility. In a organization, if the nature of the job is non-routine it justifies a variety of behaviors which the person can indulge in. c) Centrality of Workflow: Centrality refers to how critical the job is for the organization to achieve its strategic goals. The jobs which are central to the organization, even the routine ones, are likely to have more influence on organization decision making. d) Control Over Inputs: If a job, by virtue of its position in the structure, has control over resources, which are required for others functioning, will have power over others, more so, if the resources are scarce and critical to others. e) Uniqueness: In the organization, jobs which require specialized skills invariably carry greater power. Actually almost all jobs require specialized competence and skills. However, many of them can be substituted. Ex: car drivers and taxi operators( unless of course they force the management to enter into an agreement). f) Proximity of Power: If the jobs allows one to be in the proximity of the place where crucial organizational decisions are taken, it gives one greater opportunities to influence these decisions. Of course, this influence is more often informal in nature than formal. Power Imbalances/Sources of organizational conflicts: Power imbalance stimulates when the less powerful put in efforts to enhance their power, leadin to organizational conflicts. Like organizational power, organizational conflicts also have their roots in organization structure. SJBIT/MBA Page84
Walton and Dutton, identified a number of structural factors which contribute to organizational / departmental conflicts. They are: A) Horizontal Differentiation: The differentiation that is caused when people are put in different groups and functions. They never interact at times. They develop task based internal differences. These differences are because of the degree of structure, the orientation among members towards the environment, their planning and interpersonal orientation. Therefore, the integrating mechanisms in the organization need to be taken care. B) Interdependence among units: It two units interact there are chances of conflicts if the interaction is not proper /healthy. This interdependence can be in three ways. a) Mutually dependent: The problem they experience is related to overlapping of issues such as task overload, sharing of common resources, dealing with common clients. b) Assymetrical dependence: When one unit is dependent on the other for assistance, coordination, information, inputs etc. Since, the units are arranged in a sequential manner, incase of failure they may blame each other. c) Dependence on common resources: Dependence on a common pool of organization resources such as physical space, equipment, personal, operating or capital funds and services. C) Performance and reward criteria: Differences in performance and evaluation criteria also arise because of the variety of goal characteristics among the sub-units. Some have more long-term goals(R&D and HRD), while others have short-term targets( production, marketing) and certain goals can be measured( machine down time etc) while others are immeasurable( industrial harmony) and some are based on hard data( capacity utilization, inventory levels) while others rely on soft data (customer satisfaction) and so on. So such different goals cant be measured on a common criteria and it paves for conflicts. D) Incongruent Relationship: Through the control and coordination mechanisms, organization aims at structuring and regulating relationships among their members and sub-units. When they fail incongruency occurs. The common sources of these congruencies are: a) Certain roles and functions are ambiguous. b) Certain definition of relationships are contradictory in nature. c) More complex organizations, greater the chances of communication diistorions. d) Many specialists groups.
FLAT STRUCTURE: One factor that determines the number of hierarchical layers in the organization is the span of control. Organizations with the same number of levels can have different number of levels, it will result in tall organization, whereas if the span is wide, the organization will have a flat structure. Flat organization structure have their own problems, such as more managerial pressures on the executives, lesser promotional opportunities etc. The features of a flat organization are stated below: a) Flat Organizational Structure b) (Wide span of control) SJBIT/MBA Page85
c) d) e) f) g) h) i) j) k) More autonomy and self control is required. Flexibility and innovation is required. Ambiguous tasks and roles; specialization doesnt work. Non-routine technology. Experienced subordinates. Unstable, turbulent environment. Lack of proper control; encourages laissez-faire. Too much demand on the manager for coordinating. Reduced promotional opportunities.
------------------------------------------*******************-------------------------------------
SJBIT/MBA
Page86
MODULE 5 Foundations of Organizational Development: Conceptual frame work of OD, History of OD, First order and second order Change, Values, assumptions and believes in OD, Characteristics of OD, Participation and Empowerment, Teams and teamwork, Parallel learning structures, A normative re-educative strategy of changing, Applied Behavioral science, Action research. INTRODUCTION: An organization is a system consisting of four interacting subsystems-structure, technology, people and task. Structure refers to the formal interactions within the organization as evidenced in the organizational chart. Task refers to the set of activities to be performed. In other words, the behavioral specification associated with a job. Technology relates to the level of sophistication determining the workflow and performance of jobs in an organization. Higher technology, most often, means higher job knowledge and skills of employees. Organizations may be classified as to their level of technology: high, medium, low or obsolete. People variable refers to the human input in the organization i.e., individuals (in terms of their physical and mental skills, personality etc.) working in the organization. Organization as a system can be changed and developed to achieve its goals in the best possible way. The goals of an organization generally are: survival, stability, profitability, growth and service to society. From one organization to another, the goal or goals may differ depending upon at what stage of development the organization is. Organization can achieve its goal if it is able to respond to changes within the external and internal environment. The external environment is in terms of forces in the social, political, economic and cultural factors. Competition from similar organizations, changing needs of the public, knowledge explosion, and rapid growth of technology .Organization has to take into cognizance its internal environment as well, which includes existing structure, technology, needs and expectations of its people and the changing scenario of labor force. All constitute threat to organizational effectiveness or development. DEFINITION OF OD: Organization development (OD) is planned approach to respond effectively to changes in its external and internal environment. According to Koontz OD may be defined as a systematic, integrated and planned approach to improve the effectiveness of the enterprise. It is designed to solve problems that adversely affect the operational efficiency at all levels. It is based on scientific awareness of human behavior and organization dynamics. According to Richard, "Organization development is an effort which is, Planned, organization wide, managed from the top, to increase organization effectiveness and health, through planned interventions in the organization's processes using behavioral science knowledge." Another way of understanding OD is to know what it is not: 'OD is not a micro approach to change: Management development. For ex: It is aimed at changing individual behavior. Whereas OD is used on the macro goal of developing an organization-wide improvement.
SJBIT/MBA
Page87
OD is more than any single technique: Whereas OD consultants use many differing techniques. Such as total quality management or job enrichment. No single technique represents the OD discipline. OD does not include random or ad hoc changes: OD is based "on a incremental appraisal and diagnosis of problems leading to specific types of change, efforts. OD is aimed at more than raising morale or attitude: OD is aimed at Overall organizational effectiveness. This may include participant satisfaction an aspect of the change effort but includes other effectiveness parameters. These definitions clarify the distinctive features of OD and suggest why it is such a powerful change strategy. The participative, collaborative, problem-focused nature of OD marshals the experience and expertise of organization members as they work on their most important problems and opportunity in ways designed to lead to successful outcomes. Organization Development is an effort which is planned, organization-wide, and managed from the top, to increase organization effectiveness and health through planned interventions in the organization's processes,' using behavioral-science knowledge. Organization Development is a body of knowledge and practice that enhances organizational performance and individual development, viewing the organization as a complex system of systems that exist within a larger system, each of which has its own attributes and degrees of alignment. Organization Development is an organizational Process for understanding and improving any and all substantive process an organization may develop for performing any task and pursuing any objectives Organization development is a set of behavioral Science based theories, values, strategies and techniques aimed at the planned change of organizational work setting for the purpose of enhancing individual development and improving organizational performance, through organizational structure, process, strategy, people and culture. Essentially there are two schools of thought in OD: a) Programmed Procedure School b) System Process School The Programmed Procedure school: It is an older approach. According to it, OD is the effective implementation of the organizations policies, procedures and programmers. It is concerned with personnel activities that contribute to the overall growth and development of the organization, such as-recruitment, training, career development, Compensation, welfare and benefits, labor relations etc. Personnel development is primarily concerned with OD activities. At present, it is being widely recognized that personnel functions contribute only partly to OD. They at best serve the organizational control or maintenance function. The system process school: This school considers organization development in the context of both its internal and external environment. Components of this approach view organization as a system, which can be changed and developed to best, achieve its goals and objectives. Insights drawn from recent developments in behavioral sciences have contributed to the system-process school. An emerging role for OD is system based and focuses on total organization effectiveness and hence goes beyond the traditional personnel programmers. The emphasis is much more on work groups within and across departments rather than individuals as such. While personnel programmers demand conformity for prescribed policies and procedures, the system process school encourages openness, and collaborative ways of solving problems so that the outcomes SJBIT/MBA Page88
are advantageous to both the individual and the organization. It is likely that the objectives of both the schools are contradictory to certain extent. Programmed Procedure School System Process School Internal Internal & External Personnel oriented Department oriented Individual Group Sectional Holistic Prescriptive Open System internal Interdisciplinary OVERVIEW OF THE FIELD OF ORGANISATION DEVELOPMENT Organization development is an organizational improvement strategy. In the late 1950s and early 1960s, it emerged out of insights from group dynamics and from the theory and practice of planned change. Today the field offers an integrated framework capable of solving most of the important problems confronting the human side of organization. Organization development is about how people and organization function and how to get them to function better. The field is based on knowledge from behavior science disciplines such as psychology, social psychology, sociology, anthropology, systems theory, organizational behavior, organization theory, and management. OD practitioners are consultants trained in the theory and practice of organization development, with knowledge from the underlying behavioral sciences. OD programs are long-term, planned, sustained efforts. Such efforts begin when a leader who identifies an undesirable situation and seeks to change it. OD deals with the gamut of peoples problem and work systems problems in organizations, it may be poor morale, low productivity, poor quality, interpersonal conflict, intergroup conflict, unclear or inappropriate goals, inappropriate leadership styles, poor team performance, inappropriate organization structure, poorly designed tasks, inadequate response to environmental demands, poor customer relations, inadequate alignment among the organisations strategy, structure, culture, and processes, and the like. In short, where individuals, team, and organizations are not realizing their potential, OD can improve the situation. OBJECTIVES OF OD The objectives of OD may be stated as follows: a) To improve organizational performance as measured by profitability, market share, innovativeness etc. b) Better adaptability of the organization to its environment. c) Willingness of the members to face organizational problems and contribute creative solutions to these problems d) To improvement in internal behavior patterns such as interpersonal relations, inter-group relations, level of trust and support among role members, understanding ones own self and others, openness and meaningful communication and involvement in planning for organizational development. CHARACTERISTIC /FEATURES OF OD Some of the basic characteristics of OD programs: Planned Change: It is a planned strategy to bring about organizational Change. This change effort aims at specific objectives and is based on the diagnosis of problem areas. SJBIT/MBA Page89
Collaborative in nature: OD typically involves a collaborative approach to change, which includes the involvement and participation of those organization members most affected by the changes. Performance oriented: OD programs include an emphasis on ways to improve and enhance performance and quality (TQM). Humanistic in nature : OD relies on a set of humanistic values about people and organizations that aims at gaining more effective organizations by opening up new opportunities for increased use of human potential systems. OD represents a systems approach concerned with the interrelationship of various divisions, departments, groups and individuals and interdependent subsystems of the total organization. Focal Area: The main focus of interest is the organization at large and not individuals. An OD practitioner (either manager or consultant) is a person in an organization responsible for changing existing patterns to obtain more effective organizational performance. Organization development practitioners have come to realize that conventional training techniques are no longer sufficient for affecting the type of behavioral changes needed to create adaptive organizations. New techniques have been developed to provide participants with the competence and motivation to alter ineffective patterns of behavior. There are many OD techniques, and any individual practitioner may rely on one or a combination of approaches. Regardless of the method selected, the objectives are to work from an overall organization perspective, through increasing the ability of the "whole" to respond to a changing environment. Organizations have objectives such as making profit, surviving, and growing, but individual members also have desires to achieve, unsatisfied needs to fulfill career goals to accomplish within the organization. OD then, is a "process for Change, which can benefit both the organization and the individual. In today's business environment managers must continuously monitor change and adapt their systems to survive by staying competitive in a turbulent arena. THE EMERGENCE OF OD Organization development is one of the primary means of creating more adaptive organizations. Warren Bennis, a leading OD practitioner has suggested three factors underlying the emergence of OD. a) The need of new organizational forms: Organizations tend to adopt a form that is more appropriate to a particular time, and the current rate of change requires more adaptive forms. b) The focus on cultural change: Because each organization forms a culture-a system of beliefs and values the only way to change is to alter this organizational culture. c) The increase in social awareness: Because of the changing social climate, tomorrow's employee will no longer accept autocratic styles of management, therefore, greater social awareness is required in the organization. Todays managers exist in shifting organizational structures and can be the central force in initiating change and establishing the means for adoption. Most organizations strive to be creative, efficient, and highly competitive, maintaining a leading edge in their respective fields rather than following trends set by others. Effective managers are vital to the continuing self-renewal and ultimate survival of the organization. The Consultant manager must recognize when changes are occurring in the external environment and possess the necessary competence to bring about change when it is needed. The manager must also be aware of the internal system and recognize that the major element in planned change is the organizational culture: the feelings, norms, and behaviors of its members.
SJBIT/MBA
Page90
The roots of OD lie in the famous Hawthorne experiments carried out at the Western Electric Company by Elton Mayon and his associates: These experiments highlighted the importance of employee attitudes and expectations, informal work groups, norms and values and participation in decision making influences employee performance .Though there are divergent opinions and attitudes about the nature and practice of OD, among its practitioners, a general consensus may be noticed among them as to what the basic characteristics of OD are. In any OD effort the totality of the organization is to be taken into account. Organization being an integrated system of sub-systems, changes in anyone subsystem tends to have consequences for the other sub-systems. The approach should be holistic either for identifying the need for change within or for planning and implementing a change, and until the intended change is absorbed in the total system, optimal collaboration, synergism or efficiency cannot be obtained. The theoretical body of knowledge underlying the concept and practice of OD is eclectic. Recent developments in the area of behavioral sciences, especially psychology, sociology, anthropology etc., have influenced the OD thought and practice. THE EVOLUTION OF OD: Organization development has evolved over the past 40 years from the application of behavioral science knowledge and techniques to solving organizational problems. What has become OD stand in the late 1940s at MIT and is deeply rooted in the pioneering work of applied social scientists such as Kurt Lewin, and also strongly influenced by the work of psychologists such as Carl Rogers and Abraham Maslow. The term organization Development is widely attributed to Robert Blake and Jane Mouton (the originators of the Managerial Grid) Herren Shepard (a leading OD pioneer), however, Richard Beckhard (an OD consultant) claims this distinction as well. Regardless of who first coined the term, it emerged about 1957 and is generally conceded to have evolved from two basic sources, they being-the application of laboratory methods by National Training Laboratories (NTL) and the survey research methods ignited by the Survey Research Center. Both methods were pioneered by Kurt Lewin in about 1945.Laboratory Training methods -In the late 1940s and early 1950s laboratory training methods were developed and applied by a group of behavioral scientists at Bethel, Maine. Douglas McGregor (Theory X and Theory Y), began applying laboratory training methods to industry, at General Ills in 1956 and at Union Carbide in 1957. At union Carbide, McGregor and John Paul (an internal consultant) formed the First internal OD consulting group, and about the same time Herbert Shepard and Robert Blake were initiating a series of applied behavioral Science interventions at Esso, using mainly laboratory-training technique to improve work team processes. These early railing sessions provided the basis for what Blake and Mouton later developed as an instrumented training system they called the Managerial Grid. The success of these programs led to a dissemination of such efforts to various corporations. THE EXTENT OF OD APPLICATIONS From these early beginnings OD has experienced a rapid growth. A growing number of organizations worldwide uses OD techniques. Most major corporations have formed internal OD consulting groups. The OD network, an organization of OD practitioners, has been in existence for only a little over two decades and has grown to a membership of more than 2,000 members. The first doctoral program for training OD specialists, called the Organizational Behavior Group, was started by Shepard in 1960 at what is now the Department of Organization and Administration at Case Western Reserve University. Organization development is an exciting and a rapidly growing field. OD efforts have grown into a multitude of differing approaches and SJBIT/MBA Page91
are now applied in a number of organizations around the world by expanding number OD practitioners. Therefore, Organization Development is the attempt to influence the members of an organization to expand their candidness with each other about their views of the organization and their experience in it, and to take greater responsibility for their own actions as organization members. The assumption behind OD is that when people pursue both of these objectives simultaneously, they are likely to discover new ways of working together that they experience as more effective for achieving their own and their shared (organizational) goals. And that when this does not happen, such activity helps them to understand why and to make meaningful choices about what to do in light of this understanding." Organization Development is about planning and managing change at the individual, group and organizational levels to enable organizations to become more effective and humane. CHANGE: Change is to cause transformation. Change is to alter or modify existing things to the needful state. The moving from an existing state to the desired state is change. It Seeks to change attitudes, values, and management practices in an effort to improve organizational performance. Ultimate goal of OD is to structure the organizational environment such that managers and employees can use their skills and abilities to the fullest. Purpose: effectiveness Target: organization Basis: behavioral science knowledge Process: planned change Technique: variety of interventions
SJBIT/MBA
Page92
The BURKE-Litwin Model of Organisational change BURKE-Litwin Model of individual and organisational performance, developed by Warner Burke and George Litwin. This model shows how to create first-order and second- order change (which the author calls transactional change and transformational change) . In first-order change, some features of the organizations change and goes by many different labels: transactional, evolutionary, adaptive, incremental, or continuous change. In second-order change, the nature of the organization is fundamentally and substantially altered. And second-order change goes by many different labels: transformational revolutionary, radical, or discontinuous change. OD programs are directed towards both first and second order change, with an increasing emphasis on second-order transformational change.
The Transactional Factors Involved in First- order Change
Management Practices Structure

Work unit climate Systems (Policies & procedures)
Motivation Task Requirements and Individual Skills/Abilities Individual & organisational performance The Transformational Factors Involved in Second-Order Change External Environment Individual Needs & values
Leadership
SJBIT/MBA
Page93
Mission & strategy Organisational culture
Individual and organisational Performance On the other hand, if we want to cause second order (transformational) change, we must change mission and strategy, leadership styles, and organization culture, as shown in the figure. Interventions directed toward these factors transform the organization and cause a permanent change in organization culture, which produces changes in individual and organisational performance VALUES, ASSUMPTIONS AND BELIEFS IN OD: Values: Values are standards or ideas which most people have about the worth of good qualities, such as kindness, freedom, mercy, respect and love. Assumptions: Assumptions are supposing a thing without proof. Beliefs: Beliefs are habits of placing trust or confidence. A belief is a proposition about how the world works that the individual accepts as true it is cognitive fact for the person. A set of values, assumptions, and beliefs constitute an integral part of organization development. Most of these beliefs were formulated early in the development of the fields, and they continue to evolve as the field itself evolves. Values are also beliefs and are defined as Beliefs about what is desirable and considered as good (eg, freedom of speech) and what is an undesirable and considered as bad (eg., dishonesty). Assumptions are beliefs that are regarded as a valuable and obviously correct that are taken for granted and are rarely examined or questioned. OD values tend to be humanistic, optimistic, and democratic. Humanistic values proclaim the importance of the individuals respect the whole person, treat people with respect and dignity, assume that everyone has intrinsic worth, views all people as having the potential for growth and development. Optimistic values posit that people are basically good, that progress is possible and desirable in human affairs, and that rationality, reason, and goodwill are the tools for making progress. Democratic values assert the sanctity of the individual, the right of people to be free from arbitrary misuse of power, the importance of fair and equitable treatment for all, and the need for justice through the rule of law and due process. The basic value underlying all organization development theory and practice is that of choice. Through focused attention and through the collection and feedback of relevant data to relevant people, more choices become available and hence better decisions are made. Implications of OD Values and Assumptions: Implications for dealing with Individuals: a) The first assumption is that most individuals have drives toward personal growth and development if provided an environment that is both supportive and challenging. Most people want to develop their potential. SJBIT/MBA Page94
b) The second assumption is that most people desire to make, and are capable of making a greater contribution to attaining organization goals than most organizational environments permits c) A tremendous amount of constructive energy can be tapped if organizations realize and act on these assumptions. Implications for dealing with Groups: a) What happens in the work group at both formal and informal levels, greatly influences feelings of satisfaction and competence. b) Most people wish to be accepted and to interact cooperatively with at least one small reference group, the family, club and so on. c) Most people are capable of making greater contributions to a groups effectiveness and development. d) The formal leader cannot perform all the leadership and maintenance functions required for a group to optimize its effectiveness. e) Many attitudinal and motivational problems in an organizations require interactive and transactional solutions. TEAMS AND TEAM WORK A fundamental belief in organization development is that work teams are the building blocks of organizations. A second fundamental belief is that team must manage their culture, processes, and systems and relationships if they are to be effective. Teams and teamwork are part of the foundation of organization development. Teams and teamwork are among the hottest things happening in organizations todaygurus extol the virtues of teams, the noun team has become a verb, teaming and team related acronyms abound-SDTs(self directed teams),QCs (quality circles), HPOs (high performance organizations), HPWS (high performance work system),STS (socio-technical systems),to name just a few. Teams at Motorola produced its best selling cellular phones; Teams Taurus developed Fords best selling automobile. Team Saturn produced the Saturn automobiles, Team at 3M generated the hundreds of innovations that keep 3M ahead of its competitors. Cross functional design-built teams developed the Boeing 777. Teams and teamwork are evidence and is abundantly clear that effective teams produce results far beyond the performance of unrelated individuals. Teams are important for number of reasons: First, most individual behavior is rooted in the socio-cultural norms and values of the work team. If the team, as a team, changes those norms and values, the effect on individual behavior is immediate and lasting. Second, many task are so complex they cannot be performed by individuals, people must work together to accomplish them. Third, teams create synergy. That is the sum of the effort of team members is far greater than the sum of the individual efforts of people working alone. Synergy is a principal reason teams are so important. Fourth, teams satisfy peoples needs for social interaction, status, recognition, and respect teams nurture human nature. In this section, we examine the potential of teams and team work, and explore ways to realize that potential. SJBIT/MBA Page95
Team building activities are now a way of life for many organizations. Team periodically hold team-building meetings, people are trained in group dynamics and group problem solving skills and individuals are trained as group leaders and group facilitators. Organization using autonomous work groups or self-directed teams devotes considerable time and effort to ensure that team members possess the skills to be effective in groups. The net effect is that they achieve synergy and that teamwork becomes more satisfying for team members. Why some teams are successful while others are not. Laresen and Fasto studied a number of high performance teams that are successful, including heart transplant surgical teams, the crew of the USS Kitty Hawk and others determine the characteristics that make them successful. The eight characteristics: A clear elevating goal, a result driven structure, competent team member, unified commitment, a collaborative climate, standard of excellence, external support and recognition and principled leadership. All these are required for superior team performance. PARALLEL LEARNING STRUCTURES Dale Zand introduced the concept in 1974 under the label collateral. Organization defined it as a supplemental organization co-existing with the usual form of organization. The purpose of collateral organization is to deal with ill-structured problems which the formal organization is unable to resolve. Parallel learning structure is specially created organisational structure for planning and guiding change programs. Parallel learning structures are mechanism to facilitate innovation in large bureaucratic organizations where forces of inertia, hierarchical communication patterns, and standard way of addressing problems inhibit learning, innovation and change. In essence, parallel structures are a vehicle for learning how to change the system, and then leading the change process. In its most basic form, a parallel learning structures consists of a steering committee and a number of working groups that study what changes are needed, make recommendations for improvement, and monitor the change efforts. It should have representations from all parts of the organization. Additional refinements include work groups, action groups, idea groups or implementation groups. The charge to members of the parallel learning structure is to think and behave in ways that are different from the normal roles and rules of the organization. The key thing about parallel structures is that they create a bounded space and time for thinking, talking, deciding and acting differently than normally takes place at work. The most important and difficult task for the public creating the parallel learning structure is to create a different culture within it. It is not the supplemental structure that is important, what is more important is that which promotes learning and adaptation. High performance organization often use parallel learning structure to co-ordinate self-directed teams. At Ford Motors Co, a steering committee and working groups were used to co-ordinate the employee involvement teams. Parallel learning structure are often the best way to initiate change in large bureaucratic organization especially when the change involves a fundamental shift in the organization methods of work and a culture.
SJBIT/MBA
Page96
A NORMATIVE-REEDUCATIVE STRATERGY OF CHANGING OD involves change, and it rests on a particular strategy for change that has implications for practitioners and organization members alike. Chin and Benne describe three types of strategies for changing. The first type is empirical rational strategies, based on the assumptions that people are rational, will follow their rational self interested, and will change if and when they come to realize change is advantageous to them. The second group of strategies in normative-reeductative strategies, based on the assumptions that norms form the basis for behavior, and change come through reduction in which old norms are discarded and supplemented by new ones. The third set of strategies is the power-coercive strategies, based on the assumptions that change is compliance of those who have less power with the desires of those who have more power. Evaluated against these three change strategies, OD clearly falls within the normative-reductive category, although often OD represents a combination of the normative-reeducative and empirical-rational strategies. A second group of strategies we call normative-reductive. These strategies build upon assumptions about human motivation are different from those underlying the first. The rationality and intelligence of men are not denied. Patterns of action and practice are supported by socio-cultural norms and by commitments on the part of individuals to these norms. Sociocultural norms are supported by the attitude and value systems of individuals to these norms. Socio-cultural norms are supported by the attitude and value systems of individuals normative outlooks which undergird their commitments. Change is a pattern of practice or action, according to this view, will occur only as the persons involved are brought to change their normative orientations to old patterns and develop commitments to new ones. And change in normative orientations involve change in attitudes, values, skills. On the other hand, if you believed in normative-reductive strategy of changing you would do additional things. While you do not disregard peoples intelligence, rationality, and self-interest. You also believe that many behaviors are rooted in socio-cultural norms, values, and beliefs that must be changed if people are to accept and use the vaccine. Some of these beliefs might be that all new drugs are dangerous until they have been on the market for ten years. APPLIED BEHAVIOURAL SCIENCE This foundation of OD relates to the primary knowledge base of the field, behavioral science knowledge. OD is applicable of behavioral science knowledge, practices, and skills in ongoing systems in collaboration with system members. Although human behavior in organizations is far from an exact science, law full patterns of event produce effectiveness and ineffectiveness. OD practitioners know about these patterns through research and theory. Then how behavioral science knowledge becomes applied behavioral science knowledge?
SJBIT/MBA
Page97
Organiza ationDes signandDevelop pment10 0MBAHR3 341

Compo osition Of Applied A Beha avioral Scie ence Screen ned against the t criteria of o what is i applicable e to this situa ation? i.e wh hat helps me solve this proble em.
Pract tice Resea arch
Practice Theory P Problem
App plied Behavioral ence Scie

Behav vioral scien nce Scree ened against t the criteria of Resea arch what t works? what fits? Wha at is Behavioral science Theory
relev vant? What helps h me solv ve the problem? oth a result of applied beh havioral scie ence and a fo orm of appli ied behavioral science, OD is bo perhaps more m accurat tely it is a pr rogram of ap pplying beha avioral scien nce to organi ization, The two bottom inpu uts behaviora al science the eory and beh havioral scie ence research h represent contribut tions from pu ure science or o basic scie ence. The two top inputs practice research and practice theory t represent contribu utions from applied science.
Contribu utions of Be ehavioral Sc cience Theory: a) The T importan nce of social norms. b) The T importan nce of the existing total field f of force es. c) The T relevance e of role theo ory in accou unting for sta ability and ch hange. d) The T importan nce of individ dual goal set tting for incr reasing prod ductivity and d performanc ce. e) The T effects of f reward and d punishmen nt. Contribu utions of Be ehavioral Sc cience Resea arch: a) It t studies the causes /cond ditions and consequence c es of induced d competition on behavio or w within groups s and betwee en groups b) Results R on the e effects of cooperative c and competi itive group goal g structures on behavi ior w within groups s c) Studies on the e variables relevant r for organization o n health e effect of or rganization and a manager rial climate on leadershi ip style d) Studies on the fferent comm munication networks, n ca auses and con nsequences of o conformit ty e) Studies on dif
MBA SJBIT/M
Pag ge98
PARTICIPATION AND EMPOWERMENT: One of the most important foundations of OD is participation and Empowerment. Participation in OD programs is not restricted to elites or the top people, it is extended broadly throughout the organization. Increased participation and Empowerment have always been the central goals and fundamental values of the fields. To Empower is to give someone power, which is done by giving individuals the authority to make decisions, to contribute their ideas, to exert influence and to be responsible. Participation is especially an effective form of empowerment. Participation enhances empowerment and empowerment in turn enhances performance and individual well-being. According to Robert Quinn and Gretcher Spreitzer they had 2 different views of empowerment. Mechanistic View: Is a top-down delegation of decision making with clear boundaries and strict accountability that increases managerial control. Organic View: Is bottom-up and less controlling. Organic view is about risk-taking, growth and change. Empowerment means trusting people and tolerating their imperfections. These authors believe that organic view, with the emphasis on risk-taking, personal initiative and growth is more useful perspective. Both views contain valid ideas. The organic approach unleashes talent and energy in people that are best channeled by providing clear guidelines and boundaries. Empowerment is not something that management does to employees, but rather a mind-set that employees have about their roles in the organization. Employees must choose to be empowered. They must see themselves as having freedom and discretion, they must feel personally connected to the organization, confident about their abilities and capable of having an impact on system in which they are embedded. Empowerment is an important ingredient in high performance organization. ACTION RESEARCH: Action research" is a term for describing a spectrum of activities that focus on research, planning, theorizing, learning, and development. It describes a continuous process of research and learning in the researcher's long-term relationship with a problem. An action researcher is a person with a scientific attitude, an understanding of qualitative research principles, an understanding of the dynamics of change, and a commitment to studying problems that are relevant in real settings. This process is as much an act of scientific research as an act of engagement with people experiencing the problem. Action Research is a process which serves as a model for most OD interventions. French and Bell describe Action Research as a "process of systematically collecting research data about an ongoing system relative to some objective, goal, or need of that system, feeding these data back into the system, taking actions by altering selected variables within the system based both on the data and on hypotheses, and evaluating the results of actions by collecting more data." Action research is known by many other names, including participatory research, collaborative inquiry, emancipatory research, action learning, and contextual action research, but all are variations on a theme. Put simply, action research is learning by doing - a group of people identify a problem, doing something to resolve it, see how successful their efforts were, and if not satisfied, try again. SJBIT/MBA Page99
Action research aims to contribute both to the practical concerns of people in an immediate problematic situation and to further the goals of social science simultaneously. Thus, there is a dual commitment in action research to study a system and concurrently to collaborate with members of the system in changing it in what is together regarded as a desirable direction. Accomplishing this twin goal requires the active collaboration of researcher and client, and thus it stresses the importance of co-learning as a primary aspect of the research process. Evolution of Action Research: Origins in late 1940s Kurt Lewin is generally considered the father of action research. A German social and experimental psychologist, and one of the founders of the Gestalt school, he was concerned with social problems, and focused on participative group processes for addressing conflict, crises, and change, generally within organizations. Initially, he was associated with the Center for Group Dynamics at MIT in Boston, but soon went on to establish his own National Training Laboratories. Lewin first coined the term action research in his 1946 paper Action Research and Minority Problems, characterizing Action Research as a comparative research on the conditions and effects of various forms of social action and research leading to social action, using a process of a spiral of steps, each of which is composed of a circle of planning, action, and fact-finding about the result of the action. Eric Trist, another major contributor to the field from that immediate post-war era, was a social psychiatrist whose group at the Tavistock Institute of Human Relations in London engaged in applied social research, initially for the civil repatriation of German prisoners of war. He and his colleagues tended to focus more on large-scale, multi-organizational problems. Both Lewin and Trist applied their research to systemic change in and between organizations. They emphasized direct professional-client collaboration and affirmed the role of group relations as basis for problem-solving. Both were avid proponents of the principle that decisions are best implemented by those who help make them. The Action Research Process Stephen Kemmis has developed a simple model of the cyclical nature of the typical action research process. Each cycle has four steps: plan, act, observe, and reflect.
SJBIT/MBA
Page100
Gerald Susman (1983) gives a somewhat more elaborate listing. He distinguishes five phases to be conducted within each research cycle. Initially, a problem is identified and data is collected for a more detailed diagnosis. This is followed by a collective postulation of several possible solutions, from which a single plan of action emerges and is implemented. Data on the results of the intervention are collected and analyzed, and the findings are interpreted in light of how successful the action has been. At this point, the problem is re-assessed and the process begins another cycle. This process continues until the problem is resolved.
SJBIT/MBA
Page101
Organiza ationDes signandDevelop pment10 0MBAHR3 341
Action Research R Mo odel The step ps in Action Research are: a a) Entry: E This phase cons sists of ma arketing, i.e. finding needs for ch hange withi in an or rganization. It is also th he time to qu uickly grasp p the nature of the organ nization, ide entify th he appropria ate decision maker, m and build b a trusting relationsh hip. b) Start-up S and d contracting g: In this st tep, we iden ntify critical success fac ctors and the e real is ssues and lin nk into the organization n's culture and a processes, and clar rify roles fo or the co onsultant(s) and employ yees. This is i also the time t to dea al with resis stance within n the or rganization. A formal or r informal co ontract will define d the ch hange proces ss. c) Assessment A and a diagnos sis: Here we e collect dat ta in order to t find the opportunities o s and pr roblems in the t organizat tion. This is also the tim me for the con nsultant to make m a diagn nosis, in n order to rec commend ap ppropriate in nterventions. d) Feedback: F Everyone E wh ho contribute ed informati ion should have h an opp portunity to learn ab bout the fin ndings of the e assessmen nt process (p provided the ere is no ap pparent breac ch of an nyone's confidentiality.) ) This provi ides an oppo ortunity for the organiz zation's peop ple to become invo olved in the e change pr rocess, to learn about how differ rent parts of the or rganization affect each h other, an nd to partic cipate in se electing app propriate ch hange in nterventions. e) Action A plann ning: In this s step we wi ill distill rec commendatio ons from the e assessmen nt and fe eedback, con nsider alternative actions s and focus our o intervention(s) on ac ctivities that have th he most leve erage to effe ect positive change c in th he organizati ion. An imp plementation n plan MBA SJBIT/M Page e102
will be developed that is based on the assessment data, is logically organized, resultsoriented, measurable and rewarded. We must plan for a participative decision-making process for the intervention. Intervention: Now, and only now, do we actually carry out the change process. It is important to follow the action plan, yet remain flexible enough to modify the process as the organization changes and as new information emerges. Evaluation: Successful OD must have made meaningful changes in the performance and efficiency of the people and their organization. We need to have an evaluation procedure to verify this success, identify needs for new or continuing OD activities, and improve the OD process itself to help make future interventions more successful. Adoption: After steps have been made to change the organization and plans have been formulated, we follow-up by implementing processes to ensure that this remains an ongoing activity within the organization, that commitments for action have been obtained, and that they will be carried out. Separation: We must recognize when it is more productive for the client and consultant to undertake other activities, and when continued consultation is counterproductive. We also should plan for future contacts, to monitor the success of this change and possibly to plan for future change activities.
f)
g)
h)
i)
Principles of Action Research What gives action research its unique flavor is the set of principles that guide the research. Winter (1989) provides a comprehensive overview of six key principles. 1) Reflexive critique An account of a situation, such as notes, transcripts or official documents, will make implicit claims to be authoritative, i.e., it implies that it is factual and true. Truth in a social setting, however, is relative to the teller. The principle of reflective critique ensures people reflect on issues and processes and make explicit the interpretations, biases, assumptions and concerns upon which judgments are made. In this way, practical accounts can give rise to theoretical considerations. 2) Dialectical critique In Reality, particularly social reality, is consensually validated, which is to say it is shared through language. Phenomena are conceptualized in dialogue, therefore a dialectical critique is required to understand the set of relationships both between the phenomenon and its context, and between the elements constituting the phenomenon. The key elements to focus attention on are those constituent elements that are unstable, or in opposition to one another. These are the ones that are most likely to create changes. 3) Collaborative Resource Participants in an action research project are co-researchers. The principle of collaborative resource presupposes that each persons ideas are equally significant as potential resources for creating interpretive categories of analysis, negotiated among the participants. It strives to avoid the skewing of credibility stemming from the prior status of an idea-holder. It especially makes possible the insights gleaned from noting the contradictions both between many viewpoints and within a single viewpoint
SJBIT/MBA
Page103
4) Risk The change process potentially threatens all previously established ways of doing things, thus creating psychic fears among the practitioners. One of the more prominent fears comes from the risk to ego stemming from open discussion of ones interpretations, ideas, and judgments. Initiators of action research will use this principle to allay others fears and invite participation by pointing out that they, too, will be subject to the same process, and that whatever the outcome, learning will take place. 5) Plural Structure The nature of the research embodies a multiplicity of views, commentaries and critiques, leading to multiple possible actions and interpretations. This plural structure of inquiry requires a plural text for reporting. This means that there will be many accounts made explicit, with commentaries on their contradictions, and a range of options for action presented. A report, therefore, acts as a support for ongoing discussion among collaborators, rather than a final conclusion of fact. 6) Theory, Practice, Transformation For action researchers, theory informs practice, practice refines theory, in a continuous transformation. In any setting, peoples actions are based on implicitly held assumptions, theories and hypotheses, and with every observed result, theoretical knowledge is enhanced. The two are intertwined aspects of a single change process. It is up to the researchers to make explicit the theoretical justifications for the actions, and to question the bases of those justifications. The ensuing practical applications that follow are subjected to further analysis, in a transformative cycle that continuously alternates emphasis between theory and practice. Uses of Action Research Action research is used in real situations, rather than in contrived, experimental studies, since its primary focus is on solving real problems. It can, however, be used by social scientists for preliminary or pilot research, especially when the situation is too ambiguous to frame a precise research question. Mostly, though, in accordance with its principles, it is chosen when circumstances require flexibility, the involvement of the people in the research, or change must take place quickly or holistically. It is often the case that those who apply this approach are practitioners who wish to improve understanding of their practice, social change activists trying to mount an action campaign, or, more likely, academics who have been invited into an organization (or other domain) by decision-makers aware of a problem requiring action research, but lacking the requisite methodological knowledge to deal with it. Types of Action Research By the mid-1970s, the field had evolved, revealing 4 main streams that had emerged: traditional, contextual (action learning), radical, and educational action research. a) Traditional Action Research Traditional Action Research stemmed from Lewins work within organizations and encompasses the concepts and practices of Field Theory, Group Dynamics, T-Groups, and the Clinical Model. The growing importance of labor-management relations led to the application of action research in the areas of Organization Development, Quality of Working Life (QWL), Socio-technical SJBIT/MBA Page104
systems (e.g., Information Systems), and Organizational Democracy. This traditional approach tends toward the conservative, generally maintaining the status quo with regards to organizational power structures. b) Contextual Action Research (Action Learning) Contextual Action Research, also sometimes referred to as Action Learning, is an approach derived from Trists work on relations between organizations. It is contextual, insofar as it entails reconstituting the structural relations among actors in a social environment; domainbased, in that it tries to involve all affected parties and stakeholders; holographic, as each participant understands the working of the whole; and it stresses that participants act as project designers and co-researchers. The concept of organizational ecology, and the use of search conferences come out of contextual action research, which is more of a liberal philosophy, with social transformation occurring by consensus and normative instrumentalism. c) Radical Action Research The Radical stream, which has its roots in Marxian dialectical materialism and the praxis orientations of Antonio Gramsci, has a strong focus on emancipation and the overcoming of power imbalances. Participatory Action Research, often found in liberationist movements and international development circles, and Feminist Action Research both strive for social transformation via an advocacy process to strengthen peripheral groups in society. d) Educational Action Research A fourth stream, that of Educational Action Research, has its foundations in the writings of John Dewey, the great American educational philosopher of the 1920s and 30s, who believed that professional educators should become involved in community problem-solving. Its practitioners, not surprisingly, operate mainly out of educational institutions, and focus on development of curriculum, professional development, and applying learning in a social context. It is often the case that university-based action researchers work with primary and secondary school teachers and students on community projects. Action Research Tools Action Research is more of a holistic approach to problem-solving, rather than a single method for collecting and analyzing data. Thus, it allows for several different research tools to be used as the project is conducted. These various methods, which are generally common to the qualitative research paradigm, include-keeping a research journal, document collection and analysis, participant observation recordings, questionnaire. Role of the Action Researcher Upon invitation into a domain, the outside researchers role is to implement the Action Research method in such a manner as to produce a mutually agreeable outcome for all participants, with the process being maintained by them afterwards. To accomplish this, it may necessitate the adoption of many different roles at various stages of the process, including those of Planner Catalyze Teacher Listener SJBIT/MBA Leader Facilitator Designer Observer Page105
Synthesizer Reporter
The main role, however, is to nurture local leaders to the point where they can take responsibility for the process. This point is reached they understand the methods and are able to carry on when the initiating researcher leaves. In many Action Research situations, the hired researchers role is primarily to take the time to facilitate dialogue and foster reflective analysis among the participants, provide them with periodic reports, and write a final report when the researchers involvement has ended. The Action Research Model Earlier in the chapter we described OD as a process of diagnosing, taking action, re-diagnosing, and taking new actions. This process assumes a distinct form in OD called action research. Action research is essentially a mixture of three ingredients: the highly participative nature of OD, the consultant role of collaborator and co- learner, and the interactive process of diagnosis and action. The action research model as applied in OD consists of 1. A preliminary diagnosis 2. Data gathering from client group 3. Data feed back to the client group 4. Exploration of the data by the client group 5. Action planning by the client group 6. Action taking by the client group 7. Evaluation and assessment of the results of the actions by the client group. With an OD practitioners acting as facilitator throughout the process. The action research model is powerful; seeking the ideas and energies of large number of people produces superior results. Participation by client group members ensures better information, better decision making and action taking, and increased commitment to the action programs. Actions research yields both change and new knowledge. Change occurs based on the actions taken, and new knowledge comes from examining the results of the actions. The client group learns what works, what does not work and why.
--------------------------------------------********************---------------------------------------
SJBIT/MBA
Page106
MODULE 6 Managing the OD Process: Components of OD Process, Diagnosis, Action & Program Management; Diagnosis: Diagnosing the System, its subunits and Processes, Diagnosis using the Six-box Organizational Model. Third Wave Consulting: The Action Component: nature of OD intervention, analyzing discrepancies: The Program Management Component: Phases of OD Programs, model for managing change, Creating parallel learning structures. All OD programs have three basic components: Diagnosis, Action and Program management. The diagnostic component represents a continuous collection of data about the total system, its subunits, its processes and its culture. The action component consists of all activities and interventions designed to improve the organizations functioning. The program management component encompasses all activities designed to ensure success of the program. The first step is to diagnose the state of the system, focusing on the clients major concerns. What are its strengths? What are its problem areas? What are its unrealized opportunities? Or is there any discrepancy between the vision of the desired future and the current situation? The diagnosis identifies strengths, opportunities and problem areas. Action plans are developed in step 2 to correct problems, seize opportunities, and maintain areas of strength. These action plans are OD interventions specifically tailored to address issues at the individual, group, intergroup or organizational levels as well as issues related to selected processes. Step 3 consists of fact- finding about the results of the actions. Did the action have the desired effects? Is the problem solved or the opportunity achieved? If the answer is yes, organization members move on to new and different problems and opportunities. If the answer is no, the members initiate new plans and interventions to resolve the issue. During the entire sequence, managing the OD process itself requires attention. Energy and effort are directed to ensuring that the program is supported by the organization members, that the program is relevant to the organizations priorities, and that the program is making discernible progress. Managing the OD program is a continuous activity. DIAGNOISING THE SYSTEM, ITS SUBUNITS, AND PROCESS: OD is at heart an action program based on valid information about the status quo, current problems and opportunities, and effects of actions as they relate to achieving goals. An OD program thus starts with diagnosis and employs data colleting and data analysis throughout. Diagnostic activities: Activities designed to provide an accurate account of things as they really are- are needed for two reasons. The first is to know the state of things or what is the second is to know the effects or consequences of actions. The importance of diagnostic activities is emphasized by Beckhard as follows; The development of strategy for systematic improvement of an organization demands and examination of the present state of things. Such an analysis usually looks at two broad areas. One is a diagnosis of the various subsystems that make up the total organization. These subsystems may be natural teams such as top management, the production department or research group or they may be levels such as top management, middle management, or the work force. The second area of diagnosis is the organization processes that are occurring. These include decision-making processes, communications patterns as styles, relationship between interfacing groups, the management of conflict, the setting of goals, and planning methods.
SJBIT/MBA
Page107
Common methods of Diagnosis: Diagnosing organization subsystems: Questionnaire surveys are most popular with large organizations. Interviews both group and individual are useful for getting detailed information. For small simple and relatively homogenous subsystems typical methods include, individual interviews, followed by a group meeting to review the interview data, questionnaires, observation of staff meetings and other day to day operations and a formal group meeting for self-diagnosis. For interface or intergroup subsystems confrontation meetings between both groups are often the method for data gathering and planning and corrective actions. Diagnosing organizational process: Observations, especially in meetings, questionnaire for large organizations, interviews, and discussions with group members and analysis of videotaped sessions is especially useful for communication patterns, styles and flows. Interviews, third-party observation meetings are common methods that can be useful for conflict resolution and management. Questionnaire, interviews and observation are ways to asses goal-setting ability of individuals and groups within the organization. Continued diagnosis is thus necessary in any planned change effort. Such diverse activities as getting rich, managing your time, and losing weight, for example all begin with an audit of what is the status quo and then require continual monitoring of the changing status quo over time. By comparing what is and what should be reveals the gap between actual and desired conditions. Action plans are then developed to close the gap, and the effects (consequences) of these actions are continuously monitored to measure the progress toward the goal. Diagnosis is therefore basic to all goal seeking entities. DIAGNOSING USING THE SIX BOX MODEL: Another diagnostic tool is Marvin Weisbords six box model, a diagnostic framework published in 1976, and still widely used by OD practitioners. This model tells practitioners where to look and what to look in diagnosing organizational problems. As shown in the figure below, Weisbord identifies six critical areas purposes, structures, rewards, helpful mechanisms, relationships and leadership where things must be right if the organization is to be successful.
SJBIT/MBA
Page108
Assume an organization has problems with one of its products. These problems will have their causes in dysfunctional process located in one or more of the six boxes. The problems could be caused by ill-advised structures, poor leadership, unclear purposes or purposes at variance with the product, lack of helpful mechanism and so on. The six-box model is a simple but powerful diagnostic tool. According to Weisbord, the consultant must attend to both the formal and informal aspects of each box, the formal system defines the official ways things are supposed to happen, the informal system is the ways things really happen. For example, the formal reporting relationships and organization of tasks and people prescribed in the structure box may not reflect the real structural arrangements and processes called for by that formal arrangements are inappropriate, but the informal system works around the deficiencies by developing methods to correct them. By the same token, one may also find that the formal system is correctly designed, but the informal system is not following those correct procedures and consequently performance suffers. The formal/informal distinction, that is, whats supposed to happen versus what is really happening, is a powerful element of OD practice theory and one of the secrets to understanding organizational dynamics. Weisbord recommends a thorough diagnosis looking at multiple boxes before choosing interventions.
SJBIT/MBA
Page109
THIRD WAVE CONSULTING: About ten years after the six box model appeared, Weisbord wrote an article titled,Toward Third-Wave Managing and Consulting, in which he reconsiders diagnosis and intervention. Third Wave refer to the assertion by futurist Alvin Toffler that the world has progressed through the agricultural revolution (the first wave) and industrial revolution (the second wave), and is poised on the brink of an information and technological revolution (the third wave), in which the hallmark will be rampant change in virtually all institutions of society, Weisbord belives this requires new paradigms for managing and consulting. Here he no longer likes a problem-centered, sickness model of organizational diagnosis in which the diagnosis leads to a list of problems, and interventions are designed to cure the problems. Instead, he prefers to focus on wellness to help people achieve their desired futures and to create workplaces that have meaning and community. Operationally, this means moving from a view of the consultant as an expert on diagnosis and intervention, to a view of the consultant as a stage manager of events to help people do what they are trying to do. Weisbord identifies four useful practices for the third wave consultant: (1) Assess the potential for action (look for situations with committed leadership, good business opportunities, and energized people; (2) Get the whole system in the room; Examples of the whole system are-Managers of all the functional areas in a business, representatives of the top management, across section employees from all levels, and supplier and customer representatives, directors of all of the social service agencies in a community. (3) Focus on the future; (4) Structure tasks that people can do for themselves. This optimistic, goal-oriented view for helping people in organizations is a valuable perspective on diagnosis, which means build a database, look at it together, interpret what they find, and draw conclusions for actions. THE ACTION COMPONENT, OD INTERVENTIONS: OD interventions are sets of structured activities in which selected organizational units engage in a sequence of tasks that will lead to organizational improvements. Interventions are actions taken to produce desired changes. Typically, one of four conditions gives rise to the need for OD interventions. First, the organization has a problem, something is broken. Corrective actions interventions are implements to fix the problem. Second , the organization sees an unrealized opportunity, something it wants beyond its reach. Enabling actions interventions are developed to seize the opportunity. Third, features of the organization are out of alignment: parts of the organization are working at cross purposes. Alignment activities interventions are developed to get things back in sync. Fourth, the vision guiding the organization changes: yesterdays vision is no longer good enough. Actions to build necessary structures, processes and culture to support the new visioninterventions-are developed to make the new vision a reality. In summary, interventions are planned sets of actions to change situations the organization members want to change. The range of OD interventions is quite extensive. Interventions have been developed to solve most problems related to the human side of organizations.
SJBIT/MBA
Page110
THE NATURE OF OD INTERVENTIONS: To intervene in the client system is to interpose activities so that the intervention activities are done in addition to the normal activities or are done instead of the normal activities. A well designed OD program unfolds according to a game plan, called the overall OD strategy. This strategy may be planned in advance or may emerge as events dictate. Most OD interventions minimize this artificial separation in several ways; The strategy is based on answers to question such as: What are the overall change/improvement goals of the program? What parts of the organization are most ready and receptive to the OD program? What are the key leverage points (individuals and groups in the organization), What are the main pressing problems of the organization? Answers to these questions leads the practitioner to develop a game plan for where to intervene in the system, what to do, how to sequence interventions and so forth. First, many intervention activities have two goals: an educational goal and an accomplishing-atask goal. Second, OD problem solving interventions tend to focus on real problems central to the organizations needs rather than hypothetical problems that may or may not fit in members needs. Third, OD interventions use several learning models. Let us examine these three points in greater detail. The dual aspects of OD interventions can be clarified with an illustration. Let us say that the top executives of an organization spend three days in a workshop in which they do the following things: [1] Explore the need for a long-range strategic plan for the organization: [2] Learn how to formulate such a strategy by analyzing other strategies, determining the strategic variables, being shown a sequence of steps for preparing a comprehensive plan, and so forth. [3] Actually make a three-year strategic plan for the organization. This intervention combines the dual features of learning and action; the executives learned about strategic planning, and they generated a strategy. In some OD interventions, the learning aspect predominates, and in others, the action aspect predominates: but both aspects are present in most interventions.
ANALYZING DISCREPANCIES: A use full model for thinking about diagnosis and intervention could be termed discrepancy analysis- examining the discrepancies or gaps between what is happening and what should be happening, and the discrepancies between where one is and where one wants to be. Discrepancies, therefore, define both problems and goals. Discrepancies require study (diagnosis & planning) and action to eliminate the gaps. We believe that a good part of OD is problem solving, hence, discrepancy analysis. Action research describes an iterative problem and opportunities (goals) or the study of the discrepancies between where one is and where one wants to be. Organization development provides technologies for study and closing gaps. Goals also represent gaps-gaps between where we are and where we want to be. Goal setting is the process of imposing a gap; goal accomplishment is made possible by taking actions to close this gap. Organization development is more than just
SJBIT/MBA
Page111
problem solving and goal seeking but a large part of any OD program is devoted to these two critical activities. Discrepancy is a fruitful way to conceptualize problems and goals. THE PROGRAM MANAGEMENT COMPONENT: Just as OD practitioners apply behavioral science principles and practices to improve organisational functioning and individual development, they apply these same principles and practices as they manage OD programs. They attend equally to task and process. They consider systems ramifications of the program, involve organization members in planning and execution, use an action research model, create feedback loops to ensure relevance and timeless, and so forth. Managing the OD program effectively means the difference between success and failure. The aim of program management component is to provide guidelines to help ensure success in managing OD programs. Specifically, we examine the phase in OD programs; several change management models, and a procedure for creating parallel learning structures. PHASES OF OD PROGRAMS: OD programs follow logical progression of events- a series of phases that unfolds over time. An important part of managing an OD program well is to execute each phase well. Warner Burke describes the following phases of OD programs: a) Entry b) Contracting c) Diagnosis d) Feedback e) Planning change f) Intervention g) Evaluation a) Entry represents the initial contract between consultant and clients; exploring the situation that led the client to seek a consultant; and determining whether the problem or opportunity, the client, and the consultant constitute a good match. b) Contracting involves establishing mutual expectations; reaching agreement on expenditures of time, money, resources, and energy; and generally clarifying what each party expects to get from the other and give to the other. c) Diagnosis is the fact-finding phase, which produces a pitcher of the situation through interviews, observations, questionnaires, examination of organization documents and information, and the like. Burke observes that the diagnostic phase has two steps gathering information and analyzing it. d) Feedback represents returning the analyzed information to the client system; the clients exploring the information for understanding, clarification and accuracy; and the clients owning the data, their pitcher of the situation, and their problems and opportunities. e) Planning change involves the clients deciding what action steps to take based on the information they have just learned. f) Interventions involve coming out with structured activities in which organizational units engage themselves in a task or sequence of tasks with the goals of the organizational improvement and organization development.
SJBIT/MBA
Page112
g) Evaluation is done in order to find out if the efforts or programs have led to desirable results and if it is not so evaluation helps to rework and restructure the program inorder to arrive at the desired result. A MODEL FOR MANAGING CHANGE: Change is a continuous process. Change is moving from the existing state of affairs to the desired state of affairs. Another way to think about managing OD programs is to ask the questions: what are the key ingredients in successful change efforts? Cumming and Worley identify five sets of activities required for effective change management: a) Motivating change b) Creating vision c) Developing political support d) Managing the transition e) Sustaining momentum a) Motivating change The first step is getting people to want to change, to believe change is necessary, and to commit to abandoning the status quo for an uncertain future. It includes creating readiness for change and overcome resistance to change. The next set of activities, overcoming resistance to change, is achieved through three methods: Dealing empathetically with feelings of loss and anxiety, providing extensive communication about the change effort and how it is proceeding, and encouraging participation by organization members in planning and executing the change. b) Creating vision Creating a vision provides a picture of future and shows how individuals and groups will fit into that future. Creating a vision includes Mission, valued outcomes, value conditions and goals. c) Developing political support Developing political support is critical in successful change efforts. Powerful individuals and groups must be convinced that the change is good for them or at least will not significantly harm them, or else they will resist and even sabotage the effort. Developing political support includes assessing change agent power, identifying key stakeholders, and influencing stake holders. d) Managing the transition Inorder to ensure better results and accurate performance, it is equally important to manage the changes or transition effectively. It includes activity planning, commitment planning, and management structures e) Sustaining momentum To maintain consistency in the performance and to stabilize things you need to balance between all the resources in the system and at times need to be proactive as well to maintain and sustain momentum. It also includes providing resources for change, building support system for change agents, developing new competencies and skills, and reinforcing new behaviors.
SJBIT/MBA
Page113
PARALLEL LEARNING STRUCTURES: Dale Zand introduced the concept in 1974 under the label collateral. Organization defined it as a supplemental organization co-existing with the usual form of organization. The purpose of collateral organization is to deal with ill-structured problems which the formal organization is unable to resolve. Parallel learning structure is specially created organisational structure for planning and guiding change programs. Parallel learning structures are mechanism to facilitate innovation in large bureaucratic organizations where forces of inertia, hierarchical communication patterns, and standard way of addressing problems inhibit learning, innovation and change. In essence, parallel structures are a vehicle for learning how to change the system, and then leading the change process. In its most basic form, a parallel learning structures consists of a steering committee and a number of working groups that study what changes are needed, make recommendations for improvement, and monitor the change efforts. It should have representations from all parts of the organization. Additional refinements include work groups, action groups, idea groups or implementation groups. The charge to members of the parallel learning structure is to think and behave in ways that are different from the normal roles and rules of the organization. The key thing about parallel structures is that they create a bounded space and time for thinking, talking, deciding and acting differently than normally takes place at work. The most important and difficult task for the public creating the parallel learning structure is to create a different culture within it. It is not the supplemental structure that is important, what is more important is that which promotes learning and adaptation. High performance organizations often use parallel learning structure to co-ordinate self-directed teams. At Ford Motors Co, a steering committee and working groups were used to co-ordinate the employee involvement teams. Parallel learning structure are often the best way to initiate change in large bureaucratic organization especially when the change involves a fundamental shift in the organization methods of work and a culture.
---------------------------------------**************************---------------------------------------
SJBIT/MBA
Page114
MODULE 7 OD interventions: Definition, factors to be considered, choosing and sequencing intervention activities, classification of OD interventions, results of OD, typology of interventions based on target groups. Human process interventions (individual, group and inter-group human relations): Individual based: coaching, counseling, training, Behavioral modeling, delegating, leading, morale boosting, mentoring, motivation, etc. Group based: conflict management, dialoging, group facilitation, group learning, self-directed work teams, large scale interventions, team building, and virtual teams. Inter-group based: Organization mirroring, third party peacemaking interventions, partnering Techno structural (Structures, technologies, positions etc.) & Strategic interventions: Techno structural: Balanced scorecard; business process reengineering; downsizing and outsourcing; INTRODUCTION: Knowing the OD intervention and the rational for their use shows how change takes place in OD programs because interventions are the vehicles for causing change. OD interventions are set of structured activities in which selected organisational units (target groups or individuals) engage in a task or sequence of task with the goals of organisational improvement and individual development. Intervention constitutes the action thrust of organization development. The OD practitioner, a professional versed in the theory and practice of OD, brings four sets of attributes to the organizational setting: a set of values; a set of assumptions about people, organization and interpersonal relationships; a set of goals for the practitioner and the organization and its members and a set of structured activities that are the means for achieving the values assumptions and goals. These activities are what we mean by the word interventions. THINKING ABOUT OD INTERVENTIONS First, behind every program is an overall game plan or intervention strategy. This plan integrates the problem or opportunity to be addressed, the desired outcomes of the program, and the sequencing and timing of the various interventions. Interventions strategies are based on diagnosis and the goals desired by the client system. Second, some ways to structure activities to promote learning and change are better. And some are worse. Third set of considerations concerns choosing and sequencing intervention activities. Michael Beer suggests the following guidelines: a) Maximize diagnostic data: In general, interventions that will provide data needed to make subsequent intervention decisions should come first. This is particularly true when change agents do not know much about the situation. Violation of this rule can lead to choosing inappropriate interventions. b) Maximize effectiveness: Interventions should be sequenced to that early interventions enhance the effectiveness of subsequent interventions. For example, interventions that develop readiness, motivation, knowledge, or skills required by other interventions should come first. Violation of this rule (leapfrogging) can result in interventions that do not achieve their objectives, regression, and the need to start a new sequence of interventions.
SJBIT/MBA
Page115
c) Maximize efficiency: Interventions should be sequenced to conserve organizational resources such as time, energy, and money. Violation of this rule will result in overlapping interventions or in interventions that are not needed by certain people or parts of the organisation. d) Maximize speed: Interventions should be sequenced to maximize the speed with which ultimate organisational improvement is attained. Violation of this rule occurs when progress is slower than is necessary to conform to all the other rules. e) Maximize relevance: Interventions that management sees as most relevant to immediate problems should come first. In general, this means interventions that will have an impact on the organizations performance or task come before interventions that will have an impact on individuals or culture. Violation of this rule will result in loss of motivation to continue with OD. f) Minimize psychological and organisational strain: A sequence of interventions should be chosen that is least likely to create dysfunctional effects such as anxiety, insecurity, distrust, dashed expectations, psychological performance. Violating this rule will lower peoples sense of competence and confidence and their commitment to organisational improvement. Fourth, different interventions have different dynamics; they do different things because they are based on different casual mechanisms. CLASSIFYING OD INTERVENTION The inventory of OD interventions is quite extensive. We will explore several classification schemes here to help you understand how interventions clump together in terms of the objectives of the intervention and the targets of the intervention. Becoming familiar with how interventions relate to one another is use full for planning the overall OD strategy. The following are the major families of OD interventions: a) Diagnostic Activities: Fact-finding activities designed to ascertain the state of the system, the status of the problem, the way things are. Available methods range from projective devices such as build a collage that represents your place in this organization to the more traditional data collection methods of interviews, questionnaires, surveys, meeting, and examining organisational records. b) Team-Building Activities: Activities designed to enhance the effective operations of system teams. These activities focus on task issues, such as the way things are done, the skills and resources needed to accomplish tasks, the quality of relationship among the team members or between members and the leader, and how well the team gets its job done. In addition, one must consider different kinds of teams, such as formal work teams, temporary task force teams, newly constituted teams, and cross-functional teams. c) Intergroup Activities: Activities designed to improve the effectiveness of interdependent groups- groups that must work together to produce a common output. They focus on joint activities and the output of the groups considered as a single system rather than as two subsystems. When two groups are involved, the activities are designated intergroup or interface activities when more than two groups are involved, the activities are called organisational mirroring. d) Survey Feedback Activities: Activities that rely on questionnaire surveys to generate information that is then used to identify problems and opportunities. Groups analyze the data regarding their performance and design action plan to correct problems. e) Education and Training Activities: Activities designed to improve individuals skills, abilities and knowledge. Several activities are available and several approaches possible. For eg: SJBIT/MBA Page116
the individual can be educated in isolation from his or her own work group (say, in T-group comprised of strangers), or one can be educated in relation to the work group (say, when a work team learns how better to manage interpersonal conflict). f) Techno structural or Structural Activities: Activities designed to improve the effectiveness of organizational structures and job designs. The activities may take the form of experimenting with new organization structures and evaluating their effectiveness in terms of specific goals or devising new ways to bring technical resources to bear on problems. g) Process Consultation Activities: Activities that help the client to perceive, understand, and act upon process events which occur in the clients environment. These activities perhaps more accurately describes an approach, a consulting mode in which the client gains insight into the human processes in organizations and learns skills in diagnosing and managing them. h) Grid Organization Development Activities: Activities developed by Robert Blake and Jane Mouton, which constitute a six phase change model involving the tool organization. Internal resources are developed to conduct most of the programs, which may take from three to five years to complete. The model starts with upgrading individual managers skills and leadership abilities, moves to team improvement activities, then to intergroup relation activities. i) Third Party Peacemaking Activities: Activities conducted by a skilled consultant ( the third party) designed to help two members of an organization manage their interpersonal conflict. These activities are based on confrontation tactics and an understanding of the processes involved in conflict and conflict resolution. j) Coaching and Counseling Activities: Activities that entail the consultant or other organization members working with individuals to help a) Define learning goals b) Learning as how others see their behavior c) Learn new behaviors to help them better achieve their goals. k) Life and Career- Planning Activities: Activities that enable individuals to focus on their life and career objectives and how to go about achieving them. Structured activities include producing life and career inventories, discussing goals and objectives and assessing capabilities needed additional training and areas of strength and deficiency. l) Planning and Goal-Setting Activities: Activities that include theory and experience in planning and goal setting, problem-solving models, planning paradigms, ideal organization versus real organization discrepancy models and the like. The goal is to improve these skills at the levels of the individual, group and total organization. m) Strategic Management Activities: Activities that help key policymakers to reflect systematically on the organizations basic mission and goals and environmental demands, threats and opportunities and engage in long range action planning of both a reactive and proactive nature. These activities direct attention in two important directions outside the organization to a consideration of the environment and away from the present to the future. n) Organisational Transformation Activities: Activities that involve large scale system changes activities designed to fundamentally change the nature of the organization. Almost everything about the organization is changed- structure, management philosophy, reward systems the design of work, mission, values, and culture. Total quality programs are transformational so are program to create high performance organizations or high- performance work systems. Socio-technical systems theory and open systems planning provide the basis for such activities. SJBIT/MBA Page117
Typology of OD Interventions Based on Target Groups: Life and career planning activities Coaching and counseling-group (sensitivity training) Education and training to increase skills, knowledge in the area of technical task needs, relationship skills, process skills, decision making , problem solving, planning, goal setting skills Grid OD phase 1 Work redesign Gestalt OD Behavior modeling Process consultation Third party peacemaking Role negotiation technique Gestalt OD Team building Task directing Process directed Gestalt OD Grid OD phase 2 Interdependency exercise Appreciative inquiry Responsibility charting Process consultation Role negotiation Role analysis technique startup team building activities Education in decision making, problem solving, planning, goal setting in group settings Team MBO Appreciations and concerns exercise Sociotechnical system (STS) Visioning Quality of work life (QWL) program Quality circles Force-field analysis Self managed teams Intergroup activities Process directed - Task directed Organisational mirroring Partnering Process consultation Third party peacemaking at group level Page118
Individuals
Dyads/Triads
Team and group
Intergroups Relations
SJBIT/MBA
Grid OD phase 3 Survey feedback Sociotechnical systems(STS) Parallel learning structures MBO(participation forms) Cultural analysis Confrontation meetings Visioning Stratergic planning/stratergic management activities Peal time strategic change Grid OD phase 4,5,6 Interdependency exercise Survey feedback Appreciative inquiry Search conferences Quality of work life (qwl) programs Total quality management(TQM) Physical settings Large-scale systems change
Total organisation
INDIVIDUAL BASED INTERVENTIONS A) BEHAVIOR MODELING: Behavior modeling is a training technique designed to improve interpersonal competence. It is an effective tool for improving interpersonal skills because problems with interpersonal relations are common in organizations. For the persons to engage successfully in a behavior, they must perceive a link between the behavior and certain outcomes, must desire those outcomes which are positive, must believe they can do it (called self-efficacy). Behavior modeling works, it teaches the skills and behaviors needed to deal with interpersonal problems. B) COACHING AND MENTORING: Coaching and Counseling Activities: Activities that entail the consultant or other organization members working with individuals to help a) Define learning goals b) Learning as how others see their behavior c) Learn new behaviors to help them better achieve their goals. d) Coaching usually focuses on job performance. Mentoring: Is usually much broader and focuses on general career and personal development. The mentor role is usually filled by someone other than the immediate superior and usually by a person of higher rank from outside the employees department. Mentoring can be accomplished on a person to person basis, or the mentor can meet with a small group of four to six. With the group approach the group has the potential to evolve into a great learning team whose members can coach each other. It is a relationship between an experienced person and a less experienced SJBIT/MBA Page119
person for the purpose of helping one with less experience. The mentor provides wisdom, guidance and counseling and mentees advance their lives, career and education. The different ways of mentoring are: a) Informal mentoring b) Structured mentoring c) Peer mentoring d) Community based mentoring e) Online mentoring C) TRAINING: Training is an important subsystem of HRD: A current / potential employee requires training: a) To increase / enhance skills b) To acquire knowledge c) To be adaptable & versatile at the job. Training is necessary to bridge the gap between job requirements & employees specifications: a) Inadequate job performance b) Decline in productivity c) Changes due to job redesigning d) Technological breakthrough Training Advantages: a) Process of learning a sequence of programmed behavior b) Involves changes in skills, attitudes, knowledge or social behavior c) Improves job behavior d) Creates awareness e) Short term f) Very specific and job related D) DELEGATING: A person authorized to act as a representative for another. Delegation is one of the most important management skills. These logical rules and techniques will help you to delegate well (and will help you to help your manager when you are being delegated a task or new responsibility - delegation is a two-way process!). Good delegation saves you time, develops you people, grooms a successor, and motivates. Poor delegation will cause you frustration, de motivates and confuses the other person, and fails to achieve the task or purpose itself. So it's a management skill that's worth improving. Here are the simple steps to follow if you want to get delegation right, with different levels of delegation freedom that you can offer. This delegation skills guide deals with general delegation principles and process, which is applicable to individuals and teams, or to specially formed groups of people for individual projects (including 'virtual teams'). Delegation is a very helpful aid for succession planning, personal development - and seeking and encouraging promotion. It's how we grow in the job - delegation enables us to gain experience to take on higher responsibilities. SJBIT/MBA Page120
Effective delegation is actually crucial for effective succession. For the successor, and for the manager too: the main task of a manager in a growing thriving organization is ultimately to develop a successor. When this happens everyone can move on to higher things. When it fails to happen the succession and progression becomes dependent on bringing in new people from outside. Delegation can be used to develop your people people and yourself - delegation is not just a management technique for freeing up the boss's time. Of course there is a right way to do it. These delegation tips and techniques are useful for bosses - and for anyone seeking or being given delegated responsibilities. As a giver of delegated tasks you must ensure delegation happens properly. Just as significantly, as the recipient of delegated tasks you have the opportunity to 'manage upwards' and suggest improvements to the delegation process and understanding - especially if your boss could use the help. Managing the way you receive and agree to do delegated tasks is one of the central skills of 'managing upwards', and also will help improve individual contribution towards the organization for a positive outcome. E) MORALE BOOSTING: Managers important jobs is to keep spirits up in the workplace. With stress levels in organizations and companys at an all times high, this isnt always easy to do. Inorder to boost morale of employees you can come out with strategies. By sponsoring a movie, meetings outside the office, allowing to come an hour late on any particular date, taking picture and adding them to the humid corner and by not pressurizing them to do a task will always boost the employees morale and will contribute in an effective manner. GROUP BASED INTERVENTIONS A) CONFLICT MANAGEMENT: Sources of Organizational Conflicts People like to be powerful, to have control and mastery over their life and work. Adler (1927), in fact, proposed power as a basic human motive. An ideal condition of organizational life would be, if every job-occupant feels equally and adequately empowered to manage his work. However, it is generally accepted that organizations do not (and probably cannot) distribute power equally across different hierarchical levels. The structural arrangements in organizations inadvertently end up by giving some departments or jobs more power than they rationally require, while leaving others with lesser influence than they deserve. These power imbalances stimulate the less powerful to put in efforts to enhance their power, leading to organizational conflicts. Like organizational power, organizational conflicts also have their roots in organizational structure. A number of structural factors, which contribute to organizational or interdepartmental conflicts are differentiation, interdependence among subunits, performance and reward criteria and incongruent relationships.
Managing Organizational Conflicts: Like power politics, conflict is also a largely negatively understood term. Most often, it is interpreted as a hindrance in the teamwork, which is supposed to be essential for achieving a SJBIT/MBA Page121
common organizational goal. Correspondingly, management of conflicts is often equated with elimination or avoidance of conflicts. Responsible managers, it is assumed, must ensure that conflicts do not arise and harmony prevails. This popular view (shared by the managers) was further strengthened in a study by Singh & Parthasarathy (1985). Based on the responses of 242 executives, they should conclude that the avoidance of conflicts and compromising when a conflict situation arises appeared to be the most prevalent styles of conflict management among Indian Executives. Managing Organizational Conflicts: A Contingency Perspective The best way of managing conflicts is through: Collaboration: It is a problem solving approach and therefore encourages more creative and innovative activities in the organization. Three of the most common methods for managing conflicts through encouraging collaboration are as follows: a) Creating super ordinate goals b) Joint problem solving c) Increased interactions Power-play: Power-play or power politics is the archetypal anthithesis of collaborative strategy. Whereas collaboration is a win win strategy, which aims at establishing acceptable rules of interaction, power-play aims at a win/lose situation by circumventing or distorting the established rules. Power-play is an organizational reality, which often fulfills useful aims. Gerloff and Cummins identified a list of power tactics used by executives and sub-units in the organization. They are: a) Withholding information b) Blocking-off information coming c) Delaying agreements and decisions d) Emphasizing perfectionism e) Protecting ones territory Bargaining: Bargaining is a middle-ground between the collaborative and political strategies of conflict management. It incorporates elements from both strategies-the problem solving stance of the collaborative approach, as well as the tactical moves and counter moves of the power-play. It is one of the most commonly used conflict management strategy. Based on the studies of bargaining behavior Thomas, Lawler, Walton identified the following four critical features of this approach: a) Selective sharing of information b) Continuous revaluations of ones position c) Variations in pressure tactics d) Trade-offs Structural and Procedural Strategies: It involves reasonable manipulation of organizational elements which would help in resolving organizational conflicts. Some of the conflict management strategies which involve rearrangement of organizational elements are as follows: a) Reducing interdependence among units b) Top-down interventions c) Enlarging resources d) Combining conflicting units
SJBIT/MBA
Page122
B) TEAM BUILDING: Team building interventions are typically directed toward four main areas: diagnosis, task accomplishments including problem solving, decision making, role clarification, goal setting, etc, team relationships meaning building and maintaining effective interpersonal relationships including boss-subordinate relationships and peer relationship, and team organization processes. In other words, according to Richard Beckhard the four major reasons or purposes involved in having teams meet other than for the sharing of information. They are, to set goals and priorities, to analyze or allocate the way work is performed, to examine the way a group is working its process such as norms, decision making, communications) and to examine the relationships among people doing the work. Activities designed to enhance the effective operations of system teams. These activities focus on task issues, such as the way things are done, the skills and resources needed to accomplish tasks, the quality of relationship among the team members or between members and the leader, and how well the team gets its job done. In addition, one must consider different kinds of teams, such as formal work teams, temporary task force teams, newly constituted teams, and cross-functional teams. Techniques and exercises used in team building interventions are: Role analysis technique, interdependency exercise, nole negotiation technique, appreciation and concerns exercise, responsibility charting, visioning, force-field analysis(understanding a problematic situation and taking corrective actions). Purpose of team building interventions: a) To get the right people together b) To avoid a large block of uninterrupted time c) To work on high-priority problems or opportunities d) To structure and enhance the likelihood of realistic solutions e) To ensure action plans are enthusiastically implemented TEAM BUILDING INTERVENTIONS: Gestalt Approach to team building: A form of team building that focuses more on individual than the group is the gestalt therapy. The major advocate of this orientation is Stanley. M. Herman. It is based on the belief that persons function as a whole total organisms. And each person possesses positive and negative characteristics. The goals of the gestalt therapy is awareness, integration, maturation, authenticity, self-regulation and behavioral change. Basically, one must come to terms with oneself, must accept responsibility for ones actions, must experience and must stop blocking off awareness, authenticity and the like by dysfunctional behaviors. Staley applies a gestalt orientation to organization development, especially in working with leader sub-ordinate relations and team building. The primary thrust is to make individual stronger, more authentic and more in touch with the individuals own feelings, building a better team. Also, it is to provide instruction on making the organization culture safer, more pleasant and easy for the individual. Techniques and exercises used in Team Building a) Role analysis technique. b) Interdependency exercises c) A role negotiation technique d) The appreciation and concerns exercise e) Responsibility charting f) Visioning SJBIT/MBA Page123
g)Force-field analysis Probably the oldest intervention in the OD practitioners kit bag is the force-field analysis. I is a device for understanding a problematic situation and planning corrective actions. This technique rests on several assumptions: The present state of things and the desired state of things. The current condition is a resultant in a field of opposing forces. A desired future state of affairs the desired condition can be achieved dislodging the current equilibrium moving it to the desired state and stabilizing the equilibrium at that point. This technique was proposed by Kurt Lewin in 1947. It was to apply the device to social problems, social eqilibria and social change. It involves the following steps: Decide upon a problematic situation you are interested in improving Carefullly and completely describe the desired situation Identify the forces and factors operating in the current force field Examine the forces. Which ones arestrong and which ones are weak? Startegies for moving the equilibrium from the current condition to the desired condition Implement the action plans Describe what action must be taken to stabilize the equilibrium at the desired condition and implement those actions LARGE-SCALE INTERVENTION: By Large-scale systems change we mean organizational change that is massive in terms of the number of organizational units involved, the number of people affected, the number of organizational subsystems altered, and the depth of the cultural change involved. For example eight to four and shifting to a more participative leadership style might involve every unit of the organization, affect the responsibilities of every employee at every level, and would require changes in such aspects as work flow, reporting relationships, job descriptions and titles, compensation, and training programs. Organizational transformation, or second-order change, usually requires a multiplicity of interventions and takes place over a fairly long period of time. For example, the five year organizational transformation process at British airways, as reported by Goodstein and Burke. a) b) c) d) e) f) g) h) i) j) k) l) Replacement of the top management team. Redefining the nature of the business from transportation to service. Diagonal task forces to plan changes. A reduction in hierarchical levels. Team building, including role clarification and negotiation. Process consultation. Modifying the budget process. Top management commitment and involvement. Personal staff trained to be internal consultants. Peer support groups Performance-based compensation and profit sharing. Experimental training programs for senior and middle managers including feedback on managerial behavior. m) Open communications.
SJBIT/MBA
Page124
n) Continuous data-based feedback on work group and organizational climate and management practices. o) A new appraisal system emphasizing both behavior and performance. p) Continuous use of task forces. SELF-MANAGED TEAMS: a) It involves providing teams with a grouping of tasks that comprises a major unit of the total work to be performed. b) It involves training group members in multiple skills, including team-effectiveness skills. c) Delegating to the team many aspects of how the work gets done. d) Providing a great deal of information and feedback for self-regulation of quality and productivity. e) Solving the problem of dislocation of first line supervisors. f) It reconceptualises the role of managers with emphasis on coaching, expediting and coordinating. GROUP FACILITATION: Facilitation serves the need of any group who are meeting with a common purpose whether decision making, problem solving, and exchanging of ideas. It helps a group to accomplish its goals. It concerns itself with all the tasks needed to run a productive and impartial learning. It doesnt lead the group nor does it try to distract or entertain. VIRTUAL TEAMS: Are teams of people who primarily interact electronically and who may meet face-to-face occasionally. They are geographically dispersed team. They work across time, space and organization boundaries. GROUP LEARNING: It helps achieving multi-faceted objectives related to problem solving, decision making and other complex life skills. It is ideal vehicle for cultivating creative thinking and other processes. It is versatile in nature. It improves communication and interpersonal skills. DIALOGUING: It is interactive communication to understand a subject. Its objective is to take part in a conversation or discussion to resolve a problem, exchange of opinions on a particular subject or it is any discussion intended to produce an agreement. Dialoguing helps in better understanding and better communication among members and furthers increases the employee contribution towards the organization.
INTER GROUP BASED TEAM BUILDING INTERVENTIONS The focus of this team building group of OD interventions is on improving intergroup relation. The goals of these activities are to increase communications and interactions between work related groups, to reduce amount of dysfunctional competition.
SJBIT/MBA
Page125
THIRD PARTY PEACEMAKING INTERVENTIONS: When tension, conflicts or competition exist among groups, some predictable things happen each group sees the other as an enemy rather than as a neutral object each group describes the other in terms of negative stereotypes, interaction and communication between the two groups decrease, cutting off feedback and data input between them. Several strategies for reducing intergroup conflict have been identified in the literature. They include a common enemy (an outside object or group that both groups dislike, which brings the group closer together). Increasing the interaction and communication among the groups (increased interaction under favorable conditions tends to be associated with increased positive feelings and sentiments) finding a super ordinate goal (a goal that both group desire to achieve but that neither can achieve without the help of the other) rotating the members of the groups and instituting some form of training. Waltons Approach to Third Party Peacemaking Third party interventions into conflicts situations having the potential to control (contain) the conflict or resolve it. R.E.Walton has presented a statement of theory and practice for third party peacemaking interventions that is both important in its own right and important for its role in organization development. A basic feature of third-party intervention is confrontation. The two principals must be willing to confront the fact that conflict exists and that it has consequences for the effectiveness of the two parties involved. The third party must know how when and where to utilize confrontation tactics that expose the conflict for examination. The third party must be able to diagnose conflict situations, and Walton presents a diagnostic model of interpersonal conflict based on four basic elements the conflict issues, the precipitating circumstances, the conflict relevant acts of the principals, and the consequences of the conflict. In addition, conflict is a cyclical process, and the cycles may be benevolent, malevolent, or self-maintaining. Intervention tactics for the third party consist of structuring confrontation and dialogue between the principals. Walton lists the ingredients of productive confrontation. (our intervention is shown in brackets) a) Mutual positive motivation [both parties are disposed to attempt to resolve the conflict] b) Balance in the situational power of the two principals [power parity is most conductive to success] c) Synchronization of their confrontation efforts [initiatives and readiness to confront should occur in concert between the two parties] d) Appropriate pacing of the differentiation and integration phases of a dialogue [ time must be allowed for working through of negative feelings and clarification of ambivalent or positive feelings] e) Conditions favoring openness in dialogue [norms supporting openness and reassurance for openness should be structures for the parties] f) Reliable communicative signs [making certain each can understand the other] g) Optimum tension in the situation [there should be moderate stress on the parties]
SJBIT/MBA
Page126
The third party will intervene directly and indirectly in facilitating dialogue between the principals and resolves existing problems and differences in the organization. Confrontation means the clashing of forces or ideas and in other words a meeting faces to face. Entire management of an organization meeting in order to take a reading of their own health is confrontation. The different steps involved are: Climate setting, information gathering, information sharing, priority setting, group action planning, immediate follow up and progress review. ORGANISATION MIRROR INTERVENTIONS It is a set of activities in which a particular organizational group, the host group, gets feedback from representatives from several other organizational groups about how it is perceived and regarded. This intervention is designed to improve the relationships between groups and increase the intergroup work effectiveness It is different from the intergroup team-building intervention in that: Three or more groups are involved. Representatives of other work related groups typically participate rather than the full membership. The focus is to assist the host unit that requested the meeting. Process: Host group asks key representatives from interface group (customer-supplier groups) to meet and provide feedback. Pre- and post interviews by consultant to ID magnitude of issue(s), preparing participants and answers to their questions. At the actual session: Opening remarks by manger of host group to set tone. Guests use fishbowl discussion to maintain natural flow, hosts listen. (A fishbowl is a group seating and talking configuration in which there is an inner circle of chairs for people who talk and an outside circle of observers and non interactions.) Hosts fishbowl discusses, ask for clarification from guests. Subgroups of guests and hosts form to ID most important changes host group needs to make. Reconvene in large group to hear summaries of each sub group and form master task list. Action planning, tasks, responsible parties, completion dates established and agreed, concluding mirroring session Follow-up meeting to assess and review progress PARTNERING In situation in which two or more organizations are likely to incur unnecessary conflict and cost overruns such as the owner-contractor relationship in a large constructing project, an intervention called partnering can be productive for both parties. Partnering is a variation of team building, intergroup team building and strategic planning having the objective of forming an effective problem-finding/problem-solving management team composed of personnel from both parties, thus creating a single culture with one set of goals and objectives for the project. Partnering has been used in private sector. In a partnering project, intervention includes these steps or events: a) They select the consultants. SJBIT/MBA Page127
b) Participants include key managers and consultants. c) The workshop focuses on team building, action research, and planning-including advanced conflict resolution methods, developing a shared vision, and strategic planning with a common set of goals and objectives. d) At the workshop mutual commitment to teamwork, equitable problem solving and open communications are made. e) A follow-up workshop has to be done. Partnership tended to report better results. As a result, partnering has been used on several other large government projects involving Navy, NASA and other contractors. TECHNOSTRUCTURAL AND STRATEGIC INTERVENTIONS: Techno-structural interventions are change efforts which are aimed at improving organization effectiveness through changes in the tasks, structural, technological and goal process in the organization. This class of interventions includes changes in the overall work of the organization as to how the work is divided into units, who reports to whom, methods of control, the spatial arrangements of equipment and people, workflow arrangements and changes in communication and authority. BALANCE SCORE CARD: The balance scorecard is a strategic performance management tool. It helps to align specific activities with an organizations strategy and vision. It was developed by Robert Kalpan and Dr. David Norton. It is designed to help communicate and measure goals and performance. Instead of such a short-sighted, after-the-fact view of company performance, we need a more comprehensive view with an equal emphasis on outcome measures (the financial measures or lagging indicators), measures that will tell us how well the company is doing now (current indicators) and measures of how it might do in the future (leading indicators) What is the balanced scorecard? The balanced scorecard is a way of: a) Balancing long-term and short-term actions b) Balancing different measures of success c) Financial d) Customer e) Internal Operations f) Human Resource Systems & Development (learning and growth) g) A way of tying strategy to measures to action h) Measuring organizational, business unit or department success Four Kinds of Measures Under the balanced scorecard system, financial measures are the outcome, but do not give a good indication of what is or will be going on in the organization. Measures of customer satisfaction, growth and retention is the current indicator of company performance, and internal operations(efficiency, speed, reducing non-value added work, minimizing quality problems) and human resource systems and development are leading indicators of company performance. Finding the causes(drivers) of success Once the company mission, strategy and measures have been defined and agreed upon, the next step is to understand fully the drivers(causes) behind movement (up and down) of your balanced SJBIT/MBA Page128
scorecard. Without the specific knowledge of what drivers will affect your scorecard, your organization just might spend much time, money and effort and achieve very little. These drivers fall into four categories: a) Environmental - those factors outside the influence of your organization, such as governmental regulations, the economic cycle, local, national and global politics, etc. b) Organizational - systems inside the organization such as company strategy, human resource systems, policies, procedures, organizational structure, pay, etc. c) Group or departmental - work processes, group relationships, work responsibilities, work assignments d) Individual - personality, management style, skills, behaviors. Creating SMART targets After a full understanding the relationships among the drivers and between the drivers and measures is reached, the next step is to create a SMART target or objective. A SMART target is: Specific Measurable Agreed upon Realistic & Time-bound The equation I look at the successful implementation of the Balanced Scorecard (BSC) as an equation: Success = Measurement X Technique X Control X Focused Persistence X Consensus In conclusion Keeping in mind these factors when implementing the balanced scorecard will substantially increase your chances of success. RE-ENGINEERING: The fundamental rethinking radical design of business processes to achieve dramatic improvements in critical contemporary measures of performance such as cost, quality, service and speed. Authors Hammer and Champy define reengineering as the fundamental rethinking and radical redesign of the business process to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service, and speed. According to Hammer and Champy, reengineering focuses on visualizing and streamlining any or all business processes in the organization, which they define as a collection of activities that take one or more kinds of input and create an output that is of value to the customer. Reengineering seeks to make such processes more efficiently by combining, eliminating or restructuring activities without regard to present hierarchical or control procedures. Reengineering raises a major ethical issue for OD and human resources management and development professionals if it results in large layoffs. Reengineering seeks to enhance: Delivery of a product without compromising its quality by improving utilization of materials, labour and equipment. Reengineering focuses on making improvements in all dimension of service organization- Hum an dimension work process dimension and ethnological dimension. SJBIT/MBA Page129
Hammer- States that Reengineering strives to break away from the old rules about how we organize and conduct business. It involves recognizing and rejecting some of them and finding imaginative new ways to accomplish work. Why re-engineering: BPR, PR, OR Reengineering is focused on BREAKTHROUGH IMPROVEMENTS to dramatically improve the quality and speed of work and to reduce its cost by fundamentally changing the process by which work gets done. When to re-engineer: The normal symptoms that signal Re-Engineering It takes too long for an organization to move its products from conception to the market place as compared to its competitors. The budgeting process may be too complex. The services provided by the organization are not compatible with its customers needs. Principles of re-engineering: a) Strategic redesign of process (business process) b) Involvement of right teams of people. c) Wise use of information technology d) Changed management style e) Continuous improvement of processes. Strategic business processes: order processing logistics, manufacturing systems, Procurement and supplies cash flow management a/c. PRINCIPLES OF RE ENGINEERING- BY HAMMER-THE RULES ARE: Rule 1: Organizes around outcomes, not tasks: Combine operations into a single job. New job to involve all the steps in a process for well defined outcome. Organizing around outcomes resulting in greater speed, productivity and customer responsiveness. Rule 2: Have those who use the output of the process perform the process.-work to be carried out where it is. Rule 3: Merge information processing work into the real work that produces the information: Persons who collect information be responsible for processing to reduce errors-by avoiding eternal source for process. Rule 4: Treat geographically dispersed resources as though they work centralized. Centralized databases telecommunication networks to link separate units with economy of scale while maintaining individuals flexibility and responsiveness to customers. Rule 5: Link parallel activities instead of integrating their results. To avoid high costs and delays. Parallel activities should be linked continuously and coordinated during the process. Rule 6: Put the decision point where the work is performed and build control into process decision making should be made part of the work performed controls are to be made part of the process. SJBIT/MBA Page130
Rule 7: Capture information once at the source and to avoid erroneous data entries and costly re-entries. Major steps a company should embark to redesign process are: According to hammer, a) Develop business vision and process objectives: - Priorities objectives and set targets for future arrive ideal of process involves identifying. b) Identify processes to be redesigns:- Involves identifying critical or bottleneck processes and envisaging steps to avert shortcoming in them. c) Understand and measure existing processes:- This involves identifying current problems and setting a base lines. d) Identify information technology levels:- This involves brining those involved in the process to bargain storming session to identify new approaches. e) Designing and build a proto type of the process:- This includes organizational and technical aspects. The Three Rs of Reengineering:Jansen- Every reengineering effort involves three phases. a) Rethink:- Examine organizations current objectives and how examine critical success factors- those areas where the organization I having an edge over competitors and whether they contribute towards customer satisfaction. b) Redesign:- Analysis to the way products and services are produced. How well they are structured who accomplishes what tasks? Results of procedure. To determine which element should be redesigned to make jobs more satisfying and more customer focused. c) Retool:- A thorough evaluation of current use of advanced technologies, especially electronic data processing systems, towards improving quality of services and customer satisfaction. DOWNSIZING AND OUTSOURCING: Downsizing is reducing the number of employees on the operational payroll. Some users distinguish from a layoff with downsizing intended to be a permanent downscaling and a layoff intended to be a temporary downscaling in which employees may later be hired. Business organizations uses several techniques in downsizing including providing incentives to take early retirement and transfer to subsidiary companys but the most common technique is to simply terminate the employment of a certain number of people. Outsourcing refers to the process of sub-contracting to a third-party. It is contracting with another company a person to do a particular function.
SJBIT/MBA
Page131
MODULE 8 The Future and OD: The changing environment, Fundamental strengths of OD, Implications of OD for the client, ethical standards in OD, ODs future, OD Consultants role, issues in consultant-client relationship, Power, Politics & OD, Research on OD THEN CHANGING ENVIRONMENT a) The environment in which organizations operate is increasingly turbulent in an era of global, national and regional commercial competitiveness. b) Alliance, consortia, mergers and acquisitions are all common. c) Furthermore dislocation of people through downsizing and restructuring is rampant. d) The new paradigm proclaims that the most innovative and successful organizations will be those that derive their strength and vitality from adaptable committed team players at all levels and from all specialties not from the omniscience of the hierarchy. e) Increasingly organizations will be flatter with smaller central staffs and with more delegation to small groups and units. f) Companies are increasingly emphasizing on introducing planned interventions which would ultimately lead to achieving strategic goals. g) OD will be a major player in assisting organizations to shift to and sustain this new paradigm and to help invent even more effective paradigms in the future. h) The future of OD is bright but only if the field continues to evolve. FUNDAMENTAL STRENGTHS OF OD a) The central strength of OD are the processes of organisational improvement. These processes include careful tuning in to the perceptions and feelings of people, creating safe conditions for surfacing perceptions and feelings involving people in diagnosing the strengths and weaknesses of their organizations and making action plans for improvement, focusing on team and other interdependent configurations redesigning work so that it is more meaningful and motivating, explicitly training people toward a participative open team leadership model and using qualified third parties. These and other characteristics of OD have created a powerful and durable process for organisational improvement. b) The second fundamental strength has to do with the political, government milieu. OD is highly compatible with democratic governmental structures and processes that are well established in many parts of the world and merging elsewhere. Indeed approaches promote and help sustain democratic processes. c) Third, OD practice has been expanding in the last two or three decades to create a blending of attention to people oriented processes with attention to the design of the human-technical system d) Fourth almost everywhere organisations are recognizing the need for assistance in getting the right people together to talk constructively about important organisational and transorganisational matters and for developing processes for making things better. In light of these pressing needs, the od field clearly has an enormous and vital role to play in the foreseeable future.
SJBIT/MBA
Page132
IMPLICATIONS OF OD FOR THE CLIENT An OD effort has some fundamental implications for the chief executive officer and top managers of an organization and we believe that these implications need to be shared and understood at the outset. a) To enlarge the database for making management decisions in particular, the expertise, perceptions and sentiments of team members throughout the organization are more extensively considered then heretofore. b) To expand the influence processes. The OD process tends to further a process of mutual influence managers and subordinates alike tend to be influential in ways they have not experienced previously. c) To capitalize on the strengths of the informal system and to make the formal and the informal system more congruent. A great deal of information that has previously been suppressed within individuals or within the informal system ( eg: appreciations, frustrations, hurts, opinions about hoe to do things more effectively, fears) begins to be surfaced and dealt with. Energies spent suppressing matters can now be rechanneled into cooperative effort. d) To become more responsive. Management must now respond to data hat have been submerged and must begin to move in the direction of personal, team, and organizational effectiveness suggested by the data. e) To legitimatize conflict as an area of collaborative management. Rather than using winlose, smoothing, or withdrawal modes of conflict resolution, the mode gradually becomes one of confronting the underlying basic for the conflict and working the problem through to a successful resolution. f) To examine its own leadership style and ways of managing. We do not think an OD effort can be viable long if the top management team (the CEO plus subordinate team or the top team of an essentially autonomous unit) does not actively participate in the effort. The top team inevitably is a powerful determinant of organizational culture. OD is not a televised game being played for viewing by top management members of top management are the key players. g) To legitimatize and encourage the collaborative management of team, inter team, and organization cultures. This broad intervention goal is largely the essence of OD. The world, for O.D. consultants, is getting smaller. This global shrinkage is not due to changes in the planet's geophysical properties, nor is it related to anything O.D., as a professional field, has done. Rather, O.D.'s world is getting smaller because the clients make it so. Even small companies are establishing multinational operations, partnerships, and other such linkages. When the client goes global, the O.D. consultant must follow. Naturally, operating at the multinational level requires a greatly expanded skill and knowledge set. The global O.D. consultant must possess detailed understanding of the vast diversity of cultures (both between and within the nations), knowledge of the nations' economic models and variables, the quality of SJBIT/MBA Page133
the commercial infrastructures, and the specific laws which dictate how businesses must operate. It is also important to note that simple knowledge of all these factors is not enough. The global consultant must be able to use the knowledge in the design and implementation of any interventions. ETHICAL STANDARDS IN OD Ethical Guidelines for O.D. Professionals A) Responsibility to Self a) Act with integrity; be authentic and true to self b) Strive continually for self-knowledge and personal growth c) Recognize personal needs and desires and, when they conflict with other responsibilities, seek all-win resolutions of those conflicts. d) Assert own economic and financial interests in ways that are fair and equitable to me as well as to my clients and their stakeholders. B) Responsibility for Professional Development and Competence a) Accept responsibility for the consequences of any acts and make reasonable efforts to ensure that services are properly used; terminate services if they are not properly used and do what I can see that any abuses are corrected. b) Strive to achieve and maintain a professional level of competence for both self and profession by developing the full range of own competence and by establishing collegial and cooperative relations with other O.D. professionals. c) Recognize own personal needs and desires and deal with them responsibly in the performance of professional roles. d) Practice within the limits of competence, culture, and experience in providing services and using techniques. e) Practice in cultures different from own only with consultation from people native to or knowledgeable about those specific cultures. C) Responsibility to Clients and Significant Others a) Serve the long-term well-being, interests and development of the client system and all its stakeholders, even when the work being done has a short-term focus. b) Conduct any professional activity, program or relationship in ways that are honest, responsible, and appropriately open. c) Establish mutual agreement on a contract covering services and remuneration. d) Deal with conflicts constructively and avoid conflicts of interest as much as possible. e) Define and protect the confidentiality of client-professional relationships. f) Make public statements of all kinds accurately, including promotion and advertising, and give service as advertised. D) Responsibility to the Profession a) Contribute to continuing professional development for self, other practitioners, and the profession. b) Promote the sharing of O.D. knowledge and skill. c) Work with other O.D. professionals in ways that exemplary what our profession says we stand for. SJBIT/MBA Page134
d) Work actively for ethical practice by individuals and organizations engaged in O.D. activities and, in case of questionable practice, use appropriate channels for dealing with it. e) Act in ways that bring credit to the O.D. profession and with due regard for colleagues in other professions. E) Social Responsibility a) Act with sensitivity to the fact that recommendations and actions may alter the lives and well-being of people within client systems and the larger systems of which they are subsystems. b) Act with awareness of the cultural filters which affect view of the world, respect cultures different from own, and be sensitive to cross-cultural and multicultural differences and their implications. c) Promote justice and serve the well-being of all life on Earth. ODS FUTURE OD has a great role to play. Because of its versatility and its usefulness.How large a role OD will play in the constantly changing organizational, political, and economic milieu of the future will depend upon a number of interrelated conditions. Most of the conditions we see are generally favorable to OD, but countertrends and/or uncertainties will have to be addressed. Leadership and values For OD to flourish top management and OD consultants must place high value on strong individual team and organisational performance coupled with people oriented values. as O Toole says management can choose to try to create organisation that have both profitability and humanistic/developmental objectives whether or not the two are necessarily correlated. In an almost schizophrenic situation in the United States some top managements are highly attentive and committed to this duality of objectives and others are concerned only with the bottom line or the price of stock. OD training We would argue that the future will hold a need for availability of T-group training as a training intervention not as an organisational intervention particularly for both aspiring OD practitioners and managers. And we should not overlook the utility of T-group training for any or all organisational members including first line supervisors. Accreditation and peer review of OD skill competency has languished. Therefore, it is very important. Interdisciplinary nature of OD ODs future to a significant extent is related to other disciplines. It has been built from theory, research, and practice in social psychology, adult education, community development, general systems theory, family group therapy, anthropology, philosophy, counseling, psychiatry, general management, social work, HRM and other fields. Surely much can be learned from such fields as international diplomacy, dispute meditation, arbitration, architecture and religion. Historically some reciprocal influence has passed between these fields and OD. Diffusion of technique OD technique and approaches have been widely disseminated in society, at least on the It is also a compliment to the professionals of the field, including OD trainers, researchers and writers.
SJBIT/MBA
Page135
However atleast two problems may be lurking around the edges of this wide dissemination of technique. One problem is that techniques may be used without sufficient understanding of their theoretical research and historical foundations. The consequences may be misapplication and in turn, unnecessary cynicism and resistance on the part of client. The other problem is the possibility of a gradual diffusion of the OD field across other specialties, with the resultant loss of some of its integration of values, theory, research, history and practice. Another partial solution may involve widespread understanding of the processes, so that participants themselves act as a check on misdirected or ill-considered efforts. The less mystery and the more openness and understanding about OD, the better. Integrative practice OD practitioners need to be as knowledgeable as possible about such structural interventions and these integrations. At the same time, we believe that experts in the technological aspects of these fields also need to be knowledgeable about OD. And ideal arrangement may be for OD professionals to join with such experts on consulting teams. This collaboration is happening, although just how extensively we do not know. Obviously it requires that such teams pay considerable attention to their own team building and teamwork. In short OD field is closer to the refinement of such a paradigm, but the journey must continue. Mergers, acquisition and alliance As the tempo of business transactions worldwide increases, the phenomena of acquisitions, mergers and alliances will also become more evident, interventions that have grown out of the OD field can be highly relevant in helping two or more organisational cultures meld and in ameliorating the potential dislocation and pain that can occur when organisation are combined. Such interventions will require a high degree of interpersonal, political and cultural skill of the consultant or consulting team even more so when than one country and or language is involved. Rediscovering and recording history The history of OD is indispensable for retaining and improving effective OD interventions and approaches. Some portions of OD history are in danger of being lost forever, although some are likely to be reinvented from time to time. We are convinced that hundreds of interventions devised by OD consultants have been tremendously successful in particular applications and used perhaps two or three times again but never recorded and published. Focusing on the broad fundamental participant action research process is of overriding importance but nevertheless intervention techniques are extremely important for the OD professionals tool kit. The search for community Finally we believe that the search for community will be increasingly high on the agendas of organisation and OD efforts in the future either explicitly or implicitly. No one should be surprised to see that OD interventions take people toward a sense of community because the values underlying OD stem largely from what people have said over and over again in private interviews and safe group settings as to what they want from their organisations and from other people. And desire for a sense of community is evident in organisations as diverse as manufacturing firms, insurance companies, schools, churches, government units, the military, private clubs and charitable institutions. High performance and community High organisational performance can be congruent with and supportive of a sense of community and vice versa. Obviously it requires vision, time, empathy, skill, commitment and hard work to achieve either or both. An assessment of where a group or various units of an organisation are on SJBIT/MBA Page136
each of the dimensions in the preceding list and then moving on to ask where do you want to be? We believe future OD efforts increasingly will be aimed at both high organisational performance and a sense of community in many ways the pioneers and major thinkers in the field have been saying this same thing all along. THE NATURE OF THE CONSULTANTS EXPERTISE: Partly because of the unfamiliarity with organization development methods, clients frequently try to put the consultant in the role of the expert on substantive content, such as on personnel policy or business strategy. We believe it is possible, and desirable, for the OD consultant to be an expert in the sense of being competent to present a range of options open to the client, but any extensive reliance on the traditional mode of consulting, that is, giving substantive advice, will tend to negate the OD consultants effectiveness. The OD consultant needs resist the temptation of playing the content expert and will need to clarify his or her role with the client when it becomes an issue. However, we think the OD consultant should be prepared to describe in broad outline what the organization might look like if it were to go very far with an OD effort. Further, as we will discuss later, central to his or her role, the OD consultant must be an expert process. The expert role creates a kind of dependency that typically does not lead to internal skill development. The second reason is that the expert role almost inevitably requires the consultant to defend his or her recommendations. A third reason for largely avoiding the expert role has to do with trust. A fourth reason has to do with expectations. If the consultant goes very far in the direction of being an expert on substance in contrast to process, the client is likely to expect more and more substantive recommendations, thus negating the OD consultants central mission which is to help with process. THE CONSULTANT AS A MODEL: Another important issue is whether change agents are willing and able to practice what they preach. In the area of feelings, for example, the consultant may bee advocating a more open system in which feelings are considered legitimate and their expression important to effective problem solving and at the same time suppressing his or her own feelings about what is happening in the client system. As another example of modeling behavior, the OD consultant needs to give out clear messagethat is, the consultants words and apparent feelings need to be congruent. The consultant also needs to check on meaning, to suggest optional methods of solving problems, to encourage and support, to give feedback in constructive ways and to accept feedback, to help formulate issues, and to provide a spirit of inquiry. It is not that the OD consultant must be a paragon of virtue; rather we are suggesting that to maximize ones effectiveness, one must continuously practice and develop the effective behaviors one wishes to instill in the client system. ISSUES IN CONSULTANT-CLIENT RELATIONSHIP: A number of interrelated issues can arise in consultant-client relationships in OD activities, and they need to be managed appropriately if adverse effects are to be avoided. These issues tend to center on the following important areas: a) Entry and contracting: b) Defining the client system: SJBIT/MBA Page137
c) Trust: A good deal of the interaction in early contacts between client consultant is implicitly related to developing a relationship of mutual trust. Confidentiality must be maintained if trust is to be maintained. Even unintentional errors can be disastrous to the consultant-client relationship. d) The nature of the consultants expertise: e) Diagnosis and appropriate interventions: f) The depth of interventions on being absorbed by the culture: A major aspect of selecting appropriate interventions is the matter of depth of intervention. In Roger Harrisons depth of intervention can be assessed using the concepts of accessibility and individuality. By accessing Harrison means the degree to which the data are more or less public versus being hidden or private and the ease with which the intervention skills can be learned. Individuality means the closeness to the persons perceptions of self and the degree to which the effects of the intervention are in the individual in contrast to the organization. It requires a careful diagnosis to determine whether these interventions are appropriate and relevant. If they are inappropriate they may be destructive, unacceptable to the client and the system. To minimize these risks, Harrison suggests two criteria for determining the appropriate depth of intervention. First to intervene at a level no deeper than that required to produce enduring solutions to the problems at hand, and second to intervene at a level no deeper than that at which the energy and resources of the client can be committed to problem solving and to change. g) The consultant as a model: h) The consultant team as a microcosm: The consultantkey client viewed as a team, or consultants working as a team, can profitably be viewed as a microcosm of the organization they are trying to create. In the first place the consultant team must set an example of an effective unit in order to enhance its credibility. Secondly the practitioners need the effectiveness that comes from continuous growth and renewal process. And third, the quality of the interrelationship. i) Action research and the OD process: j) Client dependency and terminating the relationship: k) Ethical standards in OD, Implications of OD for the client. POWER, POLITICS, AND ORGANISATIONAL DEVELOPMENT Power and politics, indisputable facts of organizational life, must be understood if one is to be effective in organizations. The OD practitioner needs both knowledge and skill in the arenas of organizational power and politics. As Warner burke observes: OD signifies change, and for change to occur in an organization, power must be exercised. Power is the intentional influence over the beliefs, emotions and behaviors of people. Potential power is the capacity to do so, but kinetic power is the act of doing so one person experts power over another to the degree that he is able to exact compliance as desired. The Nature of OD in Relation to Power and Politics. OD was founded on the belief that using behavioral science methods to increase collaborative problem solving would increase both organizational effectiveness and individual well being. This belief gave rise to the field and is a guiding premise behind its technology. To increase collaborative problems solving is to increase the positive face of power and decrease the negative face of power. Thus from its inception OD addressed issues of power and politics by proposing SJBIT/MBA Page138
that collaboration, co-operation, and joint problems solving are better ways to get things done in organizations than relying solely on bargaining and politics. The nature of OD in relation to power and politics can be examined from several perspective-its strategy of change, its interventions its values and the role of the OD practitioner. Virtually all OD interventions promote problem solving, not politics, as a preferred way to get things accomplished. OD interventions increase problem solving, collaboration, cooperation, fact-finding, and effective pursuit of goals while decreasing reliance on the negative faces of power and politics.
RESEARCH ON ORGANIZATION DEVELOPMENT: There have been significant research developments in OD. More rigorous research designs have been employed to evaluate interventions, both positive and negative outcomes have been observed. There is clear evidence that better understanding of measurement errors is being obtained. Advances in measurement techniques and valid measurement instruments have also contributed to better research on OD. Positive developments include: Better theories, improved study designs, improved measurement, better statistical methods, and good use of meta-analytical techniques. There was a shift away from research on social factors such as interpersonal relations, management, values, norms, and so on, toward research on organizing arrangements such as organization structure, strategies, administrative systems, and so on. This shift represents a move toward examining organization-level issues, that is, a look at how systems change as result of OD efforts. Porras and Robertson related or mapped various interventions to organization variables. Ex: team building should impact social factors, parallel learning structures and quality circles should impact organization arrangements. The research studies of different interventions were examined to see whether they changed the work setting which changed the work setting, which changed individual cognitions, which changed on the job behaviors, which led to the outcomes of organizational performance and individual development. The results were complicated and mixed, but moderately supportive, especially for such an ambitious undertaking. And interventions related to organizing arrangements and social factors appeared to have a positive impact on organizational performance. This example and many others demonstrate that significant advances are being made in research on OD.
------------------------------------------*******************--------------------------------------------
SJBIT/MBA
Page139
SJBIT/MBA
Page140

Mba-III-Organizations Design & Organization Development (10mbahr341) - Notes

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Mba-III-Organizations Design & Organization Development (10mbahr341) - Notes

Uploaded by

Copyright:

Available Formats

OrganizationDesignandDevelopment10MBAHR341

HUMAN RESOURCE AREA ORGANIZATION DESIGN & DEVELOPMENT

Different aspects on this type of departmentalization: Positive Aspects

Duplication of functions Page5

Limited view of organizational goals

More efficient flow of work activities

Can only be used with certain types of products

Different aspects on this type of departmentalization: Positive Aspects

Customers' needs and problems can be met by specialists

Duplication of functions Limited view of organizational goals

Relative Advantages and Disadvantages of Centralization and Decentralization

Maximizes economies eliminates duplication.

scale; Facilitates intra-unit communication.

local Loss of economies of scales; duplication of efforts.

IMPORTANCE OF SOUND ORGANISATION SJBIT/MBA Page14

PCE PFM PFE

Stability Cohesive work force Skilled work force

The matrix structure SJBIT/MBA Page53

The team structure SJBIT/MBA Page54

Marketing Manager SJBIT/MBA

Marketing Manager Page56

(b) Geographic Departmentation/Structure General Manager (Marketing)

Manager Marketing (Sales) Northern Region

Manager Marketing (Sales) Southern Region

Manager Marketing (Sales) Western Region

Manager Marketing (Sales) Eastern Region

(c) Mixed Departmentation/Structure

GM (KGF) GM BANNGALORE COMPLEX GM (MYSORE DIVISION)

Enables closer control and coordination. Maximizes economies duplication. of scale;

Allows top management to focus on policy issues.

eliminates Facilitates intra-unit communication.

The matrix structure SJBIT/MBA Page70

The team structure SJBIT/MBA Page71

Authority Control Mechanisms

Decision-making Formalization Centralization

The Transactional Factors Involved in First- order Change

Management Practices Structure

Organiza ationDes signandDevelop pment10 0MBAHR3 341

Pract tice Resea arch

Practice Theory P Problem

App plied Behavioral ence Scie

Organiza ationDes signandDevelop pment10 0MBAHR3 341

Team and group

You might also like