ORGANIZATIONS AND ORGANIZATIONAL CHANGE

1. ORGANIZATIONS AND ORGANIZATIONAL CHANGE Chapter 8

2. Organizations and Organizational Change: Overview • Three Theories of Organizations • Organizational Structure • Components of Social Systems

3. Three Theories of Organizations • Organizations: A coordinated group of people who perform tasks to produce goods or services. • 3 Major Schools of thought: • Classical Theory • Neoclassical Theory • Systems Theory

4. Three Theories of Organizations: Classical Theory (1 of 3) • Developed in early 20th century • Describes form and structure of organizations • 4 components: • A system of differentiated activities • People • Cooperation toward a goal • Authority

5. Three Theories of Organizations: Classical Theory (2 of 3) 4 Structural Principles: • Functional Principle: Division into units that perform similar functions. • Scalar Principle: Structured by a chain of command that grows with increasing levels of authority.

6. Three Theories of Organizations: Classical Theory (2 of 3) 4 Structural Principles: • Line/Staff Principle: Line functions directly affect goals; staff function supports line activities. • Span-of-Control Principle: Concept related to number of subordinates a manager is responsible for supervising

7. Three Theories of Organizations: Neoclassical • Developed in the 1950s • Describes psychological or behavioral issues with organizations • Argued for less rigid – more humanistic work

8. Three Theories of Organizations: Systems (1 of 3) • Developed in the 1970s • Describes organizations in terms of interdependent components that form a system • Complex and dynamic view of organizations

9. Three Theories of Organizations: Systems (2 of 3) Organization is composed of 5 parts: • Individuals • Formal organization • Small groups • Status and role • Physical Settings

10. Three Theories of Organizations: Systems (3 of 3) • With all these parts – need means to provide coordination and linkage • Communication • Decision making • Parts and interactions do not exist for themselves, but for a larger goal

11. Organizational Structure • Structure: arrangement of work functions within an organization designed to achieve efficiently and control. • Various types of structures • Organizations seek the optimal match of structure to their environment

12. Organizational Structure: Coordinating Mechanisms Basic elements of organizational structure: • Mutual adjustment • Direct supervision • Standardization of work processes • Standardization of work output • Standardization of skills and knowledge

13. Organizational Structure: 5 Parts of Organizations • Operating core • Strategic apex • Middle line • Techno-structure • Support Staff

14. Organizational Structure: Reorganizing & Downsizing (1 of 2) • Reorganizing: Process of changing the manner in which work is configured in an organization to achieve greater efficiently. • Downsizing: Process of reducing the size of an organization by the elimination of jobs and employees; “right-sizing”.

15. Organizational Structure: Reorganizing & Downsizing (2 of 2) • Job loss usually occurs at middle line, techno-structure and support. • Companies usually become flatter.

16. Social Systems: Roles (1 of 3) • Social System: The human components of a work organization that influence the behavior of individuals and groups. • Roles: Set of expectations about appropriate behavior in a position

17. Social Systems: Roles (2 of 3) Important aspects of roles Impersonal Related to task behavior Difficult to pin down Learned quickly and can produce major behavior changes Roles and jobs are different

18. Social Systems: Roles (3 of 3) Role Episodes Stage 1: Group expectations for a particular position Stage 2: Communication about expectations Stage 3: Perceived expectations about role Stage 4: Actual role behavior

19. Social Systems: Norms Norms: A set of shared group expectations about appropriate behavior. Important Properties of Norms “Oughtness” or “shouldness” – prescription for behavior More obvious for important behaviors Enforced by group Degree that norms are shared and that deviation is acceptable vary

20. Social Systems: Organizational Culture Culture: The language, values, attitudes, beliefs, and customs of an organization. 3 Features of Organizational Culture Organization’s culture can be traced to founders Develops from organizations experience with external environment Develops from need to maintain effective working relationships with employees.

21. Organizational Culture Organizational Culture: A common perception held by the organization’s members; a system of shared meaning. • Innovation and risk taking • Attention to detail • Outcome orientation • People orientation • Team orientation • Aggressiveness

22. Organizational Culture Example (1 of 4) Ben & Jerry's Ben & Jerry’s is founded on and dedicated to a sustainable corporate concept of linked prosperity. Our mission consists of 3 interrelated parts: Social MissionTo operate the company in a way that actively recognizes the central role that business plays in society by initiating innovative ways to improve the quality of life locally, nationally & internationally. Economic MissionTo operate the Company on a sustainable financial basis of profitable growth, increasing value for our stakeholders & expanding opportunities for development and career growth for our employees. Product MissionTo make, distribute & sell the finest quality all natural ice cream & euphoric concoctions with a continued commitment to incorporating wholesome, natural ingredients and promoting business practices that respect the Earth and the Environment. http://www.benjerry.com/

23. Organizational Culture Example (2 of 4) Ben & Jerry's Mission • We have a progressive, nonpartisan social mission that seeks to meet human needs and eliminate injustices in our local, national and international communities by integrating these concerns into our day-to-day business activities. Our focus is on children and families, the environment and sustainable agriculture on family farms. • Capitalism and the wealth it produces do not create opportunity for everyone equally. We recognize that the gap between the rich and the poor is wider than at anytime since the 1920's.We strive to create economic opportunities for those who have been denied them and to advance new models of economic justice that are sustainable and replicable. • By definition, the manufacturing of products creates waste. We strive to minimize our negative impact on the environment.

24. Organizational Culture Example (3 of 4) Ben & Jerry's Mission • The growing of food is overly reliant on the use of toxic chemicals and other methods that are unsustainable. We support sustainable and safe methods of food production that reduce environmental degradation, maintain the productivity of the land over time, and support the economic viability of family farms and rural communities. • We seek and support nonviolent ways to achieve peace and justice. We believe government resources are more productively used in meeting human needs than in building and maintaining weapons systems. • We strive to show a deep respect for human beings inside and outside our company and for the communities in which they live.

25. Organizational Culture Example (4 of 4) Ben & Jerry's Employment Ben & Jerry’s offers a progressive benefits package that includes the usual stuff plus paid family leave, health club memberships and three free pints of Vermont’s Finest super premium ice cream, frozen yogurt and sorbets every day! Ben & Jerry’s Homemade, Inc. is an equal opportunity employer, dedicated to the policy of non-discrimination in employment on any basis including gender, race, ethnicity, veteran status, religious affiliation, sexual orientation, age, disability or national origin.

26. Organizational Culture Example (1 of 4) http://www.ibm.com/investor/company/index.phtml

27. Organizational Culture Example (2 of 4) IBM is committed to its obligations to society. Some of the programs in support are: IBM Governmental Programs Diversity Environmental Affairs Corporate Responsibility Report IBM Community Relations IBM Accessibility Center

28. Organizational Culture Example (3 of 4) IBM is so much more than just a job. It’s a place where you can dream, innovate and work with other intelligent and motivated people — a truly global company. One where you can find work/life balance and make a difference. Just use the links below to explore some of the reasons you might want to work at IBM.

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

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

31. Organizational Culture: News Clip • Innovation and risk taking • Attention to detail • Outcome orientation • People orientation • Team orientation • Aggressiveness • Stability Microsoft clip– Write down examples from these different aspects of culture

32. Organizational Change • Organizational Development: A system of planned interventions designed to change an organization’s structure and/or processes to achieve a higher level of functioning. • Organizations exist to fulfill some purpose or objective. • Organizations do not change quickly. • Organizations need to change as the environment changes.

33. Organizational Change • Organizational change follows a pattern of punctuated equilibrium. • Individuals find change difficult; thus they often resist change.

34. Organizational Change • Organizational development is the process of assisting organizations in preparing for and managing change. • Often change will occur by altering the organization’s work structure or worker attitudes. • 4 general phases of change • Diagnostic • Intervention • Implementation • Evaluation

35. Organizational Change • There is no single theory or approach but there is a variety of methods to help organizations manage change. • Focus is on long-term solutions. • Generally aimed at the team, unit or organizational level and rarely at the individual. • An applied, practitioner-oriented area of the behavioral sciences.

36. Organizational Change Change Agent – usually the OD consultant who guides OD; involved in diagnosis, identification of courses of action, recommending specific changes, and occasionally implementation. Client – recipient of the change effort; this is usually the organization, but occasionally may be a group of individuals. Intervention– what the change agent does on behalf of the client.

37. Phase 1: Denial • Denial is a psychological defense. • People do not want to believe the change is “real”. • They are essentially in “shock”.

38. Phase 1: Denial They may try to: • Hold onto the past, continue “business as usual”. • Avoid thinking about the change. • Try to stop, or slow down implementation of the change. • Ignore their own feelings; focus outside of themselves.

39. Phase 2: Resistance • Resistance to change is normal • People are being asked to give up their “comfort zone” for the unknown

40. People in Phase 2 may need acceptance of feelings and reassurance of their value as an employee. Phase 2: Resistance Employees may feel: • Afraid • Threatened • Powerless • Angry • Upset • Anxious

41. Phase 3: Exploration • People are coming off the “low point” in the Change Curve. • People begin accepting the change and start to: • Take an interest in the organization again • Clarify goals • Explore how to make the change work

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

43. Phase 4: Commitment • People feel that they “made it through” the change. • People recover their sense of productivity and self- esteem. • Change now becomes the new “business as usual”. Recognize that some members of a group may not make it to this stage and will require additional assistance.

44. Phase 4: Commitment People need to be rewarded for their success Thanks! We couldn’t have made this change without your hard work and support!

45. Empowerment • Empowerment: The process of giving employees in an organization more power and decision-making authority within a context of less managerial oversight. • 4 Dimensions (Spreitzer, 1997): • Meaning • Competence • Self-determination • Impact

46. Model of Planned Organizational Change • To change an organization you need to know: • Variables that can be manipulated by intervention • Outcomes intended by change • Work setting has 4 components: • Organizing arrangements • Social factors • Physical setting • Technology These components influence Individual Development & Organizational Performance

47. Overcoming the Resistance to Change • Psychological ownership: feeling that one is psychologically tied to an object and is possessive of it. • Human needs associated with psychological ownership: • Self-enhancement • Self-continuity • Control and efficiency

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

49. Overcoming the Resistance to Change • Education and communication • Participation • Facilitation and support • Negotiation • Manipulation • Coercion

50. Major Organizational Change Interventions • Features of culture change process: • Strong Leader • A clear vision of what needs to be done • Development of new work procedures • An organization is open to learn.