organization_structure & change

8/8/2019 organization_structure & change

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Dimensions of Organization

Structure What makes up the term organizationstructure

Three components as the core dimensions of

organizational structure are:

Complexity

Formalization

Centralization


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Core Dimensions

Complexity : refers to the degree of differentiation that exists within the organization.

There are three kinds of differentiation .

1) Horizontal differentiation : means separation between units.

2) Vertical differentiation : refers to the depth of the organizational hierarchy.

3) Spatial differentiation : it encompasses the degree to which the location of an organizations facilities and personnel are dispersed geographically.

An increase in any one of these three factors will increase an organization's complexity.


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Core Dimension contd.

Formalization : refers to the degree to which jobs withinan organization are standardized.

Formalization has been defined as the extent to which

rules, procedures, instructions and communications arewritten.

Formalization would be measured by determining if theorganizations has a policies and procedures manual,

assessing the number & specificity of its regulations,reviewing job descriptions to determine the extent ofelaborateness and detail, and looking at other similarofficial documents of the organization.


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Core Dimension

Centralization : Most problematic of the three

components.

The term refers to the degree to which decision

making is concentrated at a single point in theorganization. A high concentration implies high

centralization, whereas a low concentration

indicates low centralization or what may be

called decentralization.


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Centralization contd.

Centralization can be described more specifically

as the degree to which the formal authority to

make discretionary choices is concentrated in an

individual, unit, or level, thus permittingemployees minimum output into their work.

Centralization is concerned only with the formal

structure not the informal organization.

It looks at decision discretion.


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Decentralization

It reduces the probability of information

overload, facilitate rapid responses to new

information, provides more detailed input into

a decision, instills motivation, and representsa potential vehicle for training managers in

developing good judgment.On the other

hand, centralization adds a comprehensiveperspective to decisions and can provide

significant efficiencies.


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Decentralization InOrganization A definition by Dale states that if degree of

decentralization is greater, greater is the

number of decisions made lower down in the

hierarchy, and the more important thosedecisions are.


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Decentralization contd.

The balance between centralization and

decentralization : There are choices about which

decisions to decentralize & which to centralize.

Choosing decision areas to delegate is frequentlyregarded as a problem of selecting the proper

balance between centralization and decentralization.


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What is OrganizationalChange?

An alteration of an organizationsenvironment, structure, culture, technology,or people due to A constant force An organizational reality An opportunity or a threat

Change agent A person who initiates and assumes the

responsibility for managing a change in anorganization


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ICBM-SBEPGDM(2008-10)

Forces for OrganizationalChangeExternal forces Externalforces of changes

include all those factors of macro-environment andtask environment which directly or indirectly affectthe functioning of an organization.

These forces are ---

1.- Social forces2.- Business & Economic forces

3.- Technological forces

4.- Work environment forces

5.- Political & Legal forces

6.- Competition


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ICBM-SBEPGDM(2008-10)

Forces for OrganizationalChange

Internal Changes These forces may either be derived from the

change in external environment or may be

management induced forces.

For example if the management decides to provide a day

care service for the children of working women as to

motivate them, It may be regarded as management

induced force. And if as per the agreement with trade

union the management is forced to construct houses forits employees it may be considered as derivative force.


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Transitioning RefreezingUnfreezingUnfreezing

Radical change: organizations make major

innovations in the ways they do business

Stages of Radical Change*


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Lewins Three-Step Change Process

Unfreezing

Identifying need for change Usually involves reducing those forces maintaining the

organizations behavior at its present level

Help people accept that change is needed because the

existing situation is not adequate Moving

Implementing the change

Shifts the organizations behaviors to a new level

Involves rearranging of current work norms and

relationships to meet new needs


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Refreezing

Stabilizes the organization at a new state of equilibrium

Reinforces the changes made so that the new ways of

behaving become stabilized


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Incremental change: ongoing process of evolution over

time, during which many small adjustments occur

routinely

Tempered radicals: people who strive to create radical

change but do so by prodding an organization to

make many small incremental changes

Total quality management: relies heavily on continuousincremental change


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Reactive change:occurs when an

organization is forced to adapt or innovate

in response to some event in the external

or internal environment

Anticipatory change:occurs when

managers make organizational

modifications based on forecasts ofupcoming events or early in the cycle of a

new trend


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Types of Organizational Change

Radical

Anticipatory

Change

Incremental

Reactive

Change

Radical

Reactive

ChangeDegreeo

fCh

ange

Before Major Shifts in

the Environment

After Major Shifts in

the Environment

Major

Transformation

Small

Adjustments Incremental

Anticipatory

Change

Timing of Change


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The Process of OrganizationalChange

6. Anticipate

Resistance andTake Action to

Reduce

6. Anticipate

Resistance andTake Action to

Reduce

7. Monitor the

Changes

7. Monitor the

Changes

1. Assess the

Environment

1. Assess the

Environment

5. Develop and

Implement an

Action Plan

5. Develop and

Implement an

Action Plan

2. Determine the

Performance

Gap

2. Determine the

Performance

Gap

3. DiagnoseOrganizational

Problems

3. DiagnoseOrganizational

Problems

4. Articulate and

Communicate aVision for the

Future

4. Articulate and

Communicate aVision for the

Future

Start


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Sources of Resistance to Change

Individual Resistance

* Perception

* Personality

* Habit

* Threats to powerand influence

* Fear of the unknown

* Economic reasons

Organizational

Resistance

* Organization design

* Organizational culture

* Resource limitations* Fixed investments

* Interorganizational

agreements

Resistance to Change


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CommunicationCommunication

Highest priority and firststrategy for change

Improves urgency to change

Reduces uncertainty (fear of

unknown)

Minimizing Resistance to Change


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Provides new knowledge andskills

Includes coaching and action

learning

Helps break old routines andadopt new roles

TrainingTraining



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CommunicationCommunication When communication, training,and involvement do not resolve

stress

Potential benefits

More motivation to change Less fear of unknown Fewer direct costs

TrainingTraining

EmployeeEmployeeInvolvementInvolvement

StressStressManagementManagement



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When people clearly lose

something and wont otherwise

support change

Influence by exchange--

reduces direct costs

TrainingTraining



Negotiation



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When all else fails

Assertive influence Firing people -- radical form of

unlearning

Problems

Reduces trust

May create more subtle

resistance

TrainingTraining



Negotiation

Coercion



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Technological Change Organizational Redesign

Job Redesign Organizational

Development


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