Welcome

1. Welcome WMG XVII OSD • Introduction to Macro Organizational Behavior • Organization, Organization Theory & Effectiveness • Organizational Structure and Determinants • Organization Design Options • Strategy and Structure • Organizational Conflict, Power and Politics • Organizational Culture • Organizational Change & Transformation

2. 26 Sessions, 13Days • End Term: 40 Marks • Mid Term: 25 Marks • Group Assignment: 15 Marks • Individual Assignment: 10 Marks • Class Participation: 10 Marks • End Term Questions: Mostly application based and/or Analytical

3. Individual Assignment • Cases to be Submitted( 3 to 4 Cases,10 Marks) • Group Project (To be told on Day 2) • Detailed Instructions will be Mailed to Your Group Mail • Class Participation will be evaluated on the basis of regularity, punctuality and discussion in the class • Submit Soft Copiesof individual assignments only

4. Organizational Effectiveness • What is OE? • Why is it Important? • Approaches to Study OE • Goal Attainment Approach • Systems Approach • Strategic Constituencies Approach • Competing Values Approach • Comparing the Approaches

5. What is OE? • Indian Oil Corporation/ONGC? Largest Profits? • Reliance? Shareholder Value? • TATA STEEL? Lowest Cost Steel Producer, 5th Largest Steel Company? Value Based Company? • TVS Group? Highest Productivity? Winner of Deming Award? Strong systems and Processes? • Bennet Coleman? Profitability with Social Responsibility? • L&T? Pioneers in Engineering? • BCCI? For producing a world beating team and richest Board? For managing the constituencies?

6. What is OE? • It is there, but difficult to define • Structure influences OE • No universal agreementon what OE means

7. Early Approaches to OE • Degree to which organization realized its’ Goals Whose Goals? Long Term or Short Term Goals? Actual Goals or Official Goals?

8. OE Criteria (Goal Based)

9. So, What is OE? • No operational definition? True, from Research Perspective But, used operationally Some consensus emerging Multiple Criteria To evaluate different functions Means and Ends

10. Why is it Important?

11. The Goal Attainment Approach • Organizations exist to achieve goals • OE, therefore, must be appraised in terms of accomplishment of ‘Ends’ rather than ‘means’ • It is the ‘bottom line’ that counts • Profit Maximization, Victory in Battle, Winning a Game, Restoring a patient’s good health

12. The Goal Attainment Approach • Organizations have ‘Ultimate Goals’ • These ‘Goals’ are identified and well defined to be understood • Must be few enough to be manageable • There must be ‘consensus’ on these goals • Progress towards these Goals must be measurable Assumptions:

13. The Goal Attainment Approach • Key Decision Makers set the Goals • Measurement criteria put in place • MBO – SMART & Participative Goal Setting Making it Operational:

14. The Goal Attainment Approach • Whose Goals? Top Management? Where does ‘Top Management’ end? Dominant Coalition? • ‘Official’ or ‘Actual’ Goals? • ‘Short Term’ or ‘Long Term’ Goals? • Multiple conflicting Goals? Different Interest Groups? Quality vs Cost? • How to prioritize? What if the structure/hierarchy changes? • Goals around past accomplishments? • Are Goals created mainly to placate the dominant stake holder? Objections:

15. The Goal Attainment Approach • Problem lies with identification and measurement • More relevant if cross section of organization involved in Goal Identification, and not only top management • Including ‘actual goals’ by observing behavior of members • Recognizing that organizations pursue both short term and long term goals • Insisting on SMART goals • Viewing Goals as dynamic Value:

16. The Systems Approach Acquire Input Engage in Transformation Process Generate Output • Goal Attainment only a partial measure of effectiveness • Organization should also be judged on its’ ability to acquire inputs, ability to transform, channel the outputs, maintain balance and stability

17. The Systems Approach Acquire Input Engage in Transformation Process Generate Output • In the ‘Systems Approach’, end goals are not ignored • End Goals are only one element of a complex set • Systems Approach emphasize criteria that will emphasize long term survival • Focuses on ‘means’ rather than ‘ends’

18. The Systems Approach Assumptions: • Organizations are made up of inter-related sub parts • Sub-Parts can affect the whole system • Effectiveness requires awareness and successful interaction with environmental constituencies (Suppliers, Customers, Government) • Survival requires steady replenishment of resources (R/M, Men, Product Lines, Customers)

19. The Systems Approach Mining Lease, Campus Recruitment, Route Licensing Design to Market Time, Product Development Making it Operative: Relations with Environment (for replenishment of resources, favorable receipt of outputs) Flexibility of Response to Changes Factors Efficiency of Input-Output transformation Clarity of Internal Communication ICS Chain Level of Conflict

20. The Systems Approach Making it Operative: Critical System Criteria (i.e.Input, Transformation, Output) can be converted into OE Measures e.g.

21. The Systems Approach Making it Operative:

22. The Systems Approach Problems: • Measurement – Measuring ‘Ends’ is easier • Do ‘Means’ really matter? • Focus is on ‘Means’ to OE rather than OE itself Value to Managers: • Less prone to look into immediate future • Awareness of interdependency in an organization • Where the ‘Ends’ are vague

23. The Strategic Constituencies Approach • An effective is one that satisfies the demands of constituencies in the environment from whom it requires support for survival • PSU, Private Sector, NGO, Public Utility, Media

24. The Strategic Constituencies Approach Assumptions: • Political Arena • Vested Interests • Control of Resources OE = How successful an Organization has been in satisfying the critical constituencies, upon whom future depends • Identify Critical Constituencies • Assess their preference pattern • Satisfy those demands

25. The Strategic Constituencies Approach Making it Operative: • Dominant Coalition • Combine and Synthesize the list to arrive at critical constituencies • Relative Power of Each • Identify expectations • Preference Order (Common Interests, Eliminate Incompatible, Assigning Relative Weights to Constituencies) Problems: • Changing Environment • Strategic and Almost Strategic? • Dominant Coalition – Different Critical Constituencies • How to ‘Measure’?

26. Competing Values The criteria you value and use in assessing OE, depends on who you are, and whose interest you represent • An integrating Approach (1983) • Identify all Key Variables of OE • Determine how the variables related • No “best criterion” to measure OE • OE is a “subjective concept” • Goals or criterion that an evaluator chooses, depends upon his own values, interests and preferences • The preferences can be diverse • But they can be consolidated and organized • There are common elements underlying comprehensive list of OE Criteria • Elements are combined in such a way as to create basic sets of competing values

27. Competing Values • Three sets of competing Values • Flexibility vs Control • People (Internal) vs Organization (External) • Means vs Ends • 30 Criteria • Search for common themes • Three-D Space • Three sets of values combine to form 8 Cells • Combine 8 Cells into distinct models • 4 Diverse Models or definitions of Organizational Effectiveness

28. OE Criteria (Goal Based)

29. 8 Cells Flexibility Means People Organization Ends Control

31. Flexibility Open Systems Model Human Relations Model Ends: Skilled Work Force Means: Flexibility Means: Cohesive Work Force Ends: Acquisition of Resources Organization People Means: Availability of Information Ends: Efficiency & Productivity Means: Planning Ends: Stability Rational Goal Model Internal Processes Model Control

32. Open Systems Model Human Resources Model Rational Goal Model Internal Process Model

33. COMPETING VALUES Flexibility Open Systems Model Human Relations Model Participation, Conflict Resolution & Consensus Building Adaptation & Innovation People Organization Defining Responsibility, Measurement & Documentation Productivity & Profit Rational Goal Model Internal Process Model Control

34. Making it Operational: • Dominant Constituencies delineate the strategic constituencies • Importance of constituencies on 8 set of values • Amoebagrams: help management focus on the set of values where the strategic constituencies agree/disagree Strategic Constituencies and Organization's Life Cycle Stage OE: The degree to which an organization meets its’ goals (short term and long term), the selection of which reflects the strategic constituencies, the self interest of the evaluator and the life stage of the organization

35. Flexibility Open Systems Model Human Relations Model Ends: Skilled Work Force Means: Flexibility Means: Cohesive Work Force Ends: Acquisition of Resources Organization People Means: Availability of Information Ends: Efficiency & Productivity Means: Planning Ends: Stability Rational Goal Model Internal Processes Model Control

36. HowOzs Function How Ozs affect the environment they work in Organization Theory How Ozs are affected by the environment they work in

37. 5 Vital Questions

38. Determinants of OS Strategy Technology Environment Power Control Applications Managing Environment Managing Change Managing Conflict Managing Culture Managing Evolution Organization Structure Organization Effectiveness Organization Designs Design Options Bureaucracy* Adhocracy*

40. Environment Environment System Environment Environment

41. Output Finished Products Customers Inputs Material Capital Labor Technical Processing Core Government Revenue FIs Labour Suppliers

42. Formalization and Control Rules Stable structure Emphasis on efficiency Elaboration of structure Complex structure Decentralization Diversified Markets Maturity Decline Decline Stage High employee turnover Increased conflict Centralization Growth Collective Stage Informal communication and structure High commitment Formation Entrepreneurial Stage Ambiguous goals High creativity

43. Read chapters 1 and 3 from the book completely Definitions, Characteristics of a open system There may be a quiz in the next class.