od till session 8

8/10/2019 OD Till Session 8

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Introduction toorganizations and

organization theory

What is an organisation?

Social entities that are goal directed,designed as deliberately structured andco-ordinated activity systems and linked

to the external environment (Daft,2002).

ENVIRONMENT

ORGANIZATION

OTHER ORGANIZATIONS

PROCESSES

DECISIONMAKING

COMMUNICA-TION

POWER &POLITICS

CONFLICTMANAGEMENT

CULTURE

STRUCTURE

TECHNOLOGY

STRATEGY

EFFECTIVENESS

INTER-ORGANIZATIONALRELATIONSHIPS

ORGANIZATION DESIGN

CHANGE

OrganisationaldevelopmentOrganisationaltheoryMacrofocus

Personnel andIndustrialrelations

Organisationalbehaviour

Micro focus

AppliedTheoretical

DIFFERENT FACETS OF OB

Levels of analysis

Individual - Micro (ID) Personality, attitudes, values, perception,

motivation, stress Group Micro (IGP)

Group dynamics, teams, social influence,social loafing

Organisation Macro (OD) Structure, culture, lifecycle, strategy & goals,

environment

Assessing organisationaleffectiveness


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Effectiveness

Degree to which anorganization realizes itsgoals.

Efficiency

Amount of resources used toproduce a unit of output.

Traditional Effectiveness Approaches

Goal Approach System Resource Approach Internal Process Approach

Problems with Goal Approach

Multiple goals are set that conflict Whose goals receive priority? When should goals change? Individuals set goals not organizations;

process is political Goals are set and pursued through

complex processes of bargaining amongpowerful coalitions of individuals inorganizations

Four Models of Effectiveness Values

Human Relations Emphasis

Primary Goal: human resourcedevelopment

Subgoals: cohesion, morale, training

Internal Process Emphasis

Primary Goal: stability, equilibrium

Subgoals: information management,communication

Rational Goal Emphasis

Primary Goal: productivity, efficiency,profit

Subgoals: planning, goalsetting

Open Systems Emphasis

Primary Goal: growth,resource acquisition

Subgoals: flexibility, readiness,external evaluation

Flexibility

Control

Internal External

STRUCTURE

FOCUS

Adapted from Robert E. Quinn and John Rohrbaugh, A Spatial Model of Effectiveness Criteria: Toward a Competing ValuesApproach to Organizational Analysis, Management Science 29 (1983): 3 63-377; and Robert E. Quinn and Kim Cameron,Organizational Life Cycles and Shifting Criteria of Effectiveness: Some Preliminary Evidence, Management Science 29(1983): 33-51.

ORGANIZATIONB

ORGANIZATION A

Effectiveness Valuesfor Two Organizations

Human RelationsEmphasis

Internal ProcessEmphasis

Rational GoalEmphasis

Open SystemsEmphasis

STRUCTURE

FOCUS

FLEXIBILITY

CONTROL

INTERNAL EXTERNAL


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Top Management Role in OrganizationDirection, Design, and Effectiveness

CEO, TopManagement

Team

External Environment

OpportunitiesThreats

UncertaintyResource Availability

Internal SituationStrengths

WeaknessesDistinctive Competence

Leadership StylePast Performance

Strategic Direction

OrganizationDesign

EffectivenessOutcomes

Definemission,officialgoals

Selectoperationalgoals,competitivestrategies

ResourcesEfficiencyGoal attainmentCompeting values

Structural Form learning vs.efficiency

Information andcontrol systems

Productiontechnology

Human resourcepolicies,incentives

Organizationalculture

Interorganizationallinkages

Source: Adapted from ArieY. Lewin and Carroll U. Stephens, Individual Properties of the CEO as Determinants of Organization Design,unpublished manuscript, Duke University, 1990; and Arie Y. Lewin and Carroll U. Stephens, CEO Attributes as Determinants ofOrganization Design: An integrated Model, Organization Studies 15, no. 2 (1994): 183-212

External environment

Organization

Specific EnvironmentIndustry-Competitors

SubstituteProducts

BargainingPower ofSuppliers

BargainingPower ofBuyers

PotentialEntrants

CurrentRivalry

GeneralEnvironment

Technological

Political-Legal

Sociocultural

Demographic

Economic

An Organizations External EnvironmentMonitoring, Forecasting and

Assessing The external environmental analysis process

should be conducted on a continuous basis.

Monitoring - Detecting meaning through ongoingobservations of environmental changes and trends

Forecasting- Developing projections of anticipatedoutcomes based on monitored changes and trends

Assessing - Determining the timing and importance ofenvironmental changes and trends for firms' strategiesand their management

Relationship Between EnvironmentalCharacteristics and Organizational

Actions

Environmentaldomain

(ten sectors)

Highcomplexity

Establishment of favorable linkages:ownership, strategic alliances, cooptations,

interlocking directorates, executive recruitment,advertising, and public relations

Organic structure and systems with lowformalization, decentralization,

and low standardization

Many departments and boundary rolesGreater differentiation and more

integrators for internal coordinationHighuncertainty

High rateof change

Scarcity of valued

resources

Resourcedependence Control of the environmental domain:

change of domain, political activity,regulation, trade associations, and

illegitimate activities

Environment Organization

Technology and organisations


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Differences Between Manufacturing andService Technologies

Manufacturing Technology1 . Tan gi ble p ro du ct2. Products can be inventoried for later

consumption3. Capital asset intensive4. Little direct customer interaction5. Human element may be less

important6 . Quali ty isdirectly measured7. Longer response time is acceptable8. Site of facility is moderately

important

Service Technology

1 . I nt an gi bl e p ro du ct2. Production and consumption takeplace simultaneously

3. Labor and knowledge intensive4. Customer interaction generally high5. Human element very important6. Quality isperceived and difficult to

measure7. Rapid response time is usually

necessary8. Site of facility is extremely important

Service: Airlines, Hotels,Consultants,

Healthcare, Law firms

Product and Service:Fast-food outlets, Cosmetics,

Real estate, Stockbrokers,Retail stores

Product:Soft drink companies,

Steel companies, Auto manufacturers,

Food processing plantsSources: BasedonF. F. Reichheldand W. E. Sasser, Jr.,ZeroDefections: QualityComes toServices, Harvard Business

Review 68 (September-October 1990):105-11; andDav id E.Bowen, CarenSiehl, andBenjamin Schneider, AFramework for AnalyzingCustomer Service Orientations inManufacturing,

Academy of Management Review 14 (1989):75-95.

Design forJoint Optimization

Work roles, tasks, workflow

Goals and values

Skills and abilities

Design forJoint Optimization

Work roles, tasks, workflow

Goals and values

Skills and abilities

Sociotechnical Systems Model

The Social SystemIndividual and teambehaviors

Organizational/teamculture

Management practices

Leadership style

Degree of communicationand openness

Individual needs anddesires

The Social SystemIndividual and teambehaviors

Organizational/teamculture

Management practices

Leadership style

Degree of communicationand openness

Individual needs anddesires

The Technical SystemType of productiontechnology (small batch,mass production, FMS, etc.)

Level of interdependence(pooled, sequential,reciprocal)

Physical work setting

Complexity of productionprocess (variety andanalyzability)

Nature of raw materials

Time pressure

The Technical SystemType of productiontechnology (small batch,

mass production, FMS, etc.)

Level of interdependence(pooled, sequential,reciprocal)

Physical work setting

Complexity of productionprocess (variety andanalyzability)

Nature of raw materials

Time pressureSources: Based onT. Cummings, Self-RegulatingWork Groups: A Socio-TechnicalSynthesis, Academy ofManagement Review 3 (1978): 625-34; DonHellriegel,JohnW.Slocum, and Richard W. Woodman, Organizational Behavior , 8 th ed.(Cincinnati,Ohio:South-WesternCollege Publishing, 1998),492; and GregoryB. Northcraftand MargaretA. Neale, Organizational Behavior: A ManagementChallenge, 2nd ed. (Fort Worth, Tex.:The DrydenPress, 1994), 551.

FIGURE 9.3

TechnicalComplexity andOrganizationalStructure

Technical Complexity

StructuralCharacteristics

Levels in the hierarchy

Span of control of CEO

Span of control of first-line supervisor

Ratio of managers tononmanagers

Approximate shape of organization

Type of structur e

Cost of operation

Small-BatchTechnology

Mass ProductionTechnology

Continuous-ProcessTechnology

Low High

Organic Mechanistic Organic

High Medium Low

Relatively flat, withnarrow span of control

Relatively tall, withwide span of control

Verytall, with verynarrow span of control

3 4 6

4 7 10

23 48 15

1 to 23 1 to 16 1 to 8

Insert Figure 16.5 here

Organizational Theory

Routine and Non-routine Tasks and Organizational Design

Structural characteristic Nature of technology

Routine tasks Non-routine tasks

Standardization High Low

Mutual adjustment Low High

Specialization Individual Joint

Formalization High Low

Hierarchy of authority Tall Flat

Decision-making authority Centralized Decentralized

Overall structure Mechanistic Organic

Organizational Theory

Thompson identified three types of technology:

Mediating Long-linked Intensive

Each is associated with a different form oftask interdependence.


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NEW CHOICES

T R A D I T I O N A L

C H O I C E S

MassProduction

Small batch FlexibleManufacturingMass

Customization

ContinuousProcess

Relationship of Flexible Manufacturing Technologyto Traditional Technologies

BATCH SIZESmall Unlimited

Customized

Standardized

P R O D U C T F L E X I B I L I T Y

Source: Basedon Jack Meredith, The Strategic Advantages ofNewManufacturing Technologies For Small Firms. Strategic Management

Journal 8 (1987): 249-58;PaulAdler, ManagingFlexibleAutomation,California Management Review (Spring 1988):34-56;andOtis Port, Custom-made Direct from the Plant.

Business Week/21 st Century Capitalism, 18 November 1994, 158-59.

Decision making

Steps in the Rational Approach toDecision-Making

Monitor Decision

Environment

ImplementChosen

Alternative

DefineDecisionProblem

SpecifyDecision

Objectives

DiagnoseProblem

Develop

AlternativeSolutions

EvaluateAlternatives

ChooseBest

Alternative1

2

345

6

78

Choice Processes in theCarnegie Model

Hold joint discussionand interpret goalsand problems

Share opinions

Establish problempriorities

Obtain social supportfor problem, solution

Adopt the firstalternativethat is acceptableto the coalition

Conduct a simple,local search

Use establishedprocedures if appropriate

Create a solutionif needed

Managers havediverse goals,opinions, values,experience

Information islimitedManagers havemany constraints

Uncertainty Coalition Formation Search

Satisficing

Conflict

The Incremental DecisionProcess Model

Identification Phase Recognition Diagnosis

Development Phase Search Screen Design

Selection Phase Judgment (evaluation choice) Analysis (evaluation) Bargaining (evaluation choice) AuthorizationDynamic Factors (decision interrupts)

Garbage can model

1. Solutions may be proposed even whenproblems do not exist.

2. Managers create problems to the solutions thathave already been created.

3. Choices are made without solving problems.4. Problems may persist without being solved5. A few problems are solved6. Different coalitions may champion different

alternatives.


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Conflict, power and politics

Vertical Sources of Power

Formal Position

Resources

Control of Decision Premises and Information

Network Centrality

What is power?

Position power. Derives from organizational sources. Types of position power.

Reward power. Coercive power. Legitimate power. Process power. Information power.

Representative power.

Power and Political Tactics inOrganizations

5. Create superordinategoals

5. Make preferencesexplicit, but keep powerimplicit

4. Practice memberrotation

4. Enhance legitimacy andexpertise

4. Satisfy strategiccontingencies

3. Schedule inter-groupconsultation

3. Control decision premises3. Provide resources

2. Use confrontation andnegotiation

2. Expand networks2. Create dependencies

1. Create integrationdevices

1. Build coalitions1. Enter areas of highuncertainty

Tactics for EnhancingCollaborationPolitical Tactics for Using

Power

Tactics for Increasingthe Power Base

Strategic Contingencies That InfluenceHorizontal Power Among Departments

Dependency

Financial Resources

Centrality

Nonsubstitutability

Coping with Uncertainty

Department Power

Organisational communication


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Forms of communication

Verbal Written Spoken

Non-verbal Kinesics (body language, facial cues, eye

movements, hand movements) Vocal cues (inflections, laughter, pauses, volume) Proxemics (private zone, public zone, territoriality) Haptics (touch) Physical appearance Aesthetics (colour, lighting)

Forms of communication Aural

Hearing Listening

Direction of communication

Formal Upward DownwardSerial

Horizontal

Informal (grapevine/gossip/rumour)

SELECTION OF COMMUNICATION CHANNEL

Type of message

Routine/ Non-routine

Clear/ Ambiguous

Richness

Volume

History/ importance

Face to face talk

Telephone

Electronic mail

Memos, letters

Bulletins, general reports

Organisational structure Insert Figure 15.4 here

Note: only include part A


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Note: only include part B


Note: only include part C


Hierarchy of Authority -

the degree of vertical

differentiationacross

levels ofmanagement

Specialization -the degree to

which jobs arenarrowly

defined anddepend on

uniqueexpertise

BasicDesign

Dimensions

Formalization - the degreeto which the organization

has official rules,regulations, and procedures

Standardization - thedegree to which work

activities are accomplishedin a routine fashion

Complexity - the degree towhich many different types

of activities occur in theorganization

Centralization - the degreeto which decisions aremade at the top of the

organization

Adhocracy - aselectively

decentralizedform of

organization thatemphasizes thesupport staff &

mutual adjustmentamong people

Simple Structure - acentralized form of organization that

emphasizes the upper echelon & directsupervision

Machine Bureaucracy -a moderately

decentralized form of organization that

emphasizes thetechnical staff &standardization of

work processes

Divisional Form - amoderately decentralized

form of organizationthat emphasizes the

middle level &standardization of outputs

ProfessionalBureaucracy -a decentralized

form of organization thatemphasizes theoperating level

& standardizationof skills

StructuralConfigurations

of Organizations

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