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And Design
(Unit VI & VII)
2
Unit Learning Objectives
• After studying this chapter you should be able to:
– Define conflict.
– Differentiate between the traditional, human relations,
and interactionist views of conflict.
– Outline the conflict process.
– Define negotiation.
– Contrast distributive and integrative bargaining.
– Apply the five steps in the negotiation process.
– Show how individual differences influence negotiations.
– Assess the roles and functions of third-party negotiations.
– Describe cultural differences in negotiations.
3
Conflict Defined
• A process that begins when one party perceives
that another party has negatively affected, or is
about to negatively affect, something that the
first party cares about
– That point in an ongoing activity when an interaction
“crosses over” to become an interparty conflict
• Encompasses a wide range of conflicts that
people experience in organizations
– Incompatibility of goals
– Differences over interpretations of facts
– Disagreements based on behavioral expectations
4
Conflict …
• Two or more interdependent parties who perceive incompatible
goals, scarce resources, and interference from others in
achieving that goal (Hocker & Wilmot, 1995)
5
Conflict…
6
Conflict…
Types of conflict.
– Substantive conflict.
• A fundamental disagreement over ends or goals to be
pursued and the means for their accomplishment.
– Emotional conflict.
• Interpersonal difficulties that arise over feelings of
anger, mistrust, dislike, fear, resentment, etc.
7
Conflict…
Levels of conflict.
– Intrapersonal conflicts.
• Actual or perceived pressures from incompatible goals
or expectations.
• Approach-approach conflict.
• Avoidance-avoidance conflict.
• Approach-avoidance conflict.
8
Conflict…
9
Conflict…
10
Conflict…
11
Conflict…
12
Stages of conflict
– Conflict antecedents .
• Set the conditions for conflict.
– Perceived conflict.
• Substantive or emotional differences are sensed.
– Felt conflict.
• Tension creates motivation to act.
– Manifest conflict.
• Conflict resolution or suppression.
• Conflict aftermath.
13
Transitions in Conflict Thought
• Traditional View of Conflict
– The belief that all conflict is harmful and must be
avoided
– Prevalent view in the 1930s-1940s
• Conflict resulted from:
– Poor communication
– Lack of openness
– Failure to respond to employee needs
14
Continued Transitions in Conflict
Thought
• Human Relations View of Conflict
– The belief that conflict is a natural and inevitable
outcome in any group
– Prevalent from the late 1940s through mid-1970s
• Interactionist View of Conflict
– The belief that conflict is not only a positive force
in a group but that it is absolutely necessary for a
group to perform effectively
– Current view
15-15
Forms of Interactionist Conflict
• Functional Conflict
– Conflict that supports the goals of the group and
improves its performance
• Dysfunctional Conflict
– Conflict that hinders group performance
16
Types of Interactionist Conflict
• Task Conflict
– Conflicts over content and goals of the work
– Low-to-moderate levels of this type are FUNCTIONAL
• Relationship Conflict
– Conflict based on interpersonal relationships
– Almost always DYSFUNCTIONAL
• Process Conflict
– Conflict over how work gets done
– Low levels of this type are FUNCTIONAL
17
6.1 Causes and outcomes of conflict
Causes of conflict.
– Vertical conflict.
• Occurs between hierarchical levels.
– Horizontal conflict.
• Occurs between persons or groups at the same
hierarchical level.
– Line-staff conflict.
• Involves disagreements over who has authority and
control over specific matters.
18
Causes of conflict…
19
How can conflict be
managed successfully?
Causes of conflict — cont.
– Domain ambiguities.
• Occur when individuals or groups are placed in
ambiguous situations where it is difficult to determine
who is responsible for what.
– Resource scarcity.
• When resources are scarce, working relationships are
likely to suffer.
20
How can conflict be
managed successfully?
Causes of conflict — cont.
– Power or value asymmetries.
• Occur when interdependent people or groups differ
substantially from one another in status and influence
or in values.
21
Causes Conflict…
• Four Events that precipitate interpersonal conflict
– REBUFFS
• Failure to respond to appeal for desired action
– ILLEGITIMATE DEMANDS
• Unjust or extreme request
– CRITICISMS
• Unfavorable or demeaning verbal or nonverbal act
– CUMULATIVE ANNOYANCES
• Repetition of instances that crosses tolerance threshold
22
Outcomes of conflict
• Negative Consequences
– Less Effective
– Suboptimal Productivity
– Inhibited Cognitive Functioning
• Positive Consequences
– Identify and Better Understand Issues
– Clarify Issues
– Creative Solutions
23
Factors Influencing Conflict
• Content Related vs. Personal
• Size of Conflict
• Rigidity of the Issue
• Power Differences
• Individual Personalities, Traits, and Dispositions
24
Effects of Various Dimensions of Conflict
DIFFICULT TO
DIMENSION RESOLVE EASY TO RESOLVE
The issue itself A matter of principle Simply dividing up
something
Size of the stakes Large Small
Continuity of Single transaction Long-term
interaction relationships
Characteristics of Disorganized, with Cohesive, with
participants’ “groups” weak leadership strong leadership
Involvement of third No neutral third party Trusted, prestigious,
parties available neutral third party
available
Source: Adapted from Greenhaigh, L. Managing conflict. In R. J. Lewicki, D. M. Saunders, and J.
W. Minton (eds.), Negotiation, 3rd ed. Boston: Irwin/McGraw-Hill, 1999, 7.
25
Primary Levels of Conflict
Within Organizations
26
Levels and Types
of Conflict
Level of conflict Type of conflict
27
Levels and Types
of Conflict (Cont.)
• Intraorganization conflict
– Conflict that occurs within an organization
– At interfaces of organization functions
– Can occur along the vertical and horizontal
dimensions of the organization
• Vertical conflict: between managers and subordinates
• Horizontal conflict: between departments and work
groups
28
Levels and Types
of Conflict (Cont.)
• Intragroup conflict
– Conflict among members of a group
– Early stages of group development
– Ways of doing tasks or reaching group's goals
• Intergroup conflict: between two or more
groups
29
Levels and Types
of Conflict (Cont.)
• Interpersonal conflict
– Between two or more people
– Differences in views about what should be done
– Efforts to get more resources
– Differences in orientation to work and time in
different parts of an organization
30
Levels and Types
of Conflict (Cont.)
• Intrapersonal conflict
– Occurs within an individual
• Threat to a person’s values
• Feeling of unfair treatment
• Multiple and contradictory sources of socialization
• Related to the Theory of Cognitive Dissonance and
negative inequity
31
Levels and Types
of Conflict (Cont.)
• Interorganization conflict
– Between two or more organizations
– Not competition
– Examples: suppliers and distributors, especially
with the close links now possible
32
Sources of Conflict in Organizations (Cont.)
33
Sources of Conflict in Organizations (Cont.)
Approach–approach conflict
An individual must choose among alternatives, each of which is
expected to have a positive outcome
Avoidance–avoidance conflict
An individual must choose among alternatives, each of which is
expected to have a negative outcome
Approach–avoidance conflict
An individual must decide whether to do something that has
both positive and negative outcomes
35
Conditions that Increase the Intensity of Intrapersonal Conflict
36
Role Episode Model
Source: Based on Kahn, R. L., et al. Organizational Stress: Studies in Role Conflict
and Ambiguity. New York: John Wiley & Sons, 1964, 26.
37
Types of Role Conflict
38
Types of Role Conflict…
Interrole conflict
Role pressures associated with membership in one
group are incompatible with those stemming from
membership in other groups
Person–role conflict
Role requirements are incompatible with the focal
person’s own attitudes, values, or views of acceptable
behavior
39
Behaviors for Coping with
Role Ambiguity
Withdrawing
40
Sources of Interpersonal Power
Reward power
An individual’s ability to influence others’ behaviors by
rewarding them
Coercive power
An individual’s ability to influence others’ behaviors by
punishing them
Legitimate power
A manager’s ability to influence subordinates’ behavior because
of the manager’s formal position in the organization
41
Sources of Interpersonal Power…
Expert power
An individual’s ability to influence others’ behaviors because of
recognized competencies, talents, or specialized knowledge
Referent power
An individual’s ability to influence others’ behaviors as a result
of being respected, admired, or liked
42
The Conflict Process
• Stage I: Potential Opposition or Incompatibility
– Communication
• Semantic difficulties, misunderstandings, and “noise”
– Structure
• Size and specialization of jobs
• Jurisdictional clarity/ambiguity
• Member/goal incompatibility
• Leadership styles (close or participative)
• Reward systems (win-lose)
• Dependence/interdependence of groups
– Personal Variables
• Differing individual value systems
• Personality types
43
Stage II: Cognition and Personalization
• Important stage for two reasons:
1. Conflict is defined
• Perceived Conflict
– Awareness by one or more parties of the existence of
conditions that create opportunities for conflict to arise
2. Emotions are expressed that have a strong
impact on the eventual outcome
• Felt Conflict
– Emotional involvement in a conflict creating anxiety,
tenseness, frustration, or hostility
44
Stage III: Intentions
• Intentions
– Decisions to act in a given way
– Note: behavior does not always accurate reflect intent
• Dimensions of conflict-handling intentions:
– Cooperativeness
• Attempting to satisfy
the other party’s
concerns
– Assertiveness
• Attempting to satisfy
one’s own concerns
45
Stage IV: Behavior
• Conflict Management
– The use of resolution and stimulation techniques
to achieve the desired level of conflict
• Conflict-Intensity Continuum
46
6.2 Managing conflict and strategies
Conflict Management Model
• Maintain conflict at functional levels
– Not complete elimination
– Reducing to functional levels
– Increasing dysfunctionally low conflict
– Choose desired level of conflict based on
perceived conflict requirements
– Varies in different parts of an organization
– Manager’s tolerance for conflict plays a role
47
Conflict Management Model…
48
Conflict Management Model…
Increase Decrease
conflict conflict
49
Conflict Management Model…
• Symptoms of dysfunctionally high conflict
– Low trust
– Information distortion
– Tension/antagonism
– Stress
– Sabotage of organization’s product or service
50
Conflict Management Model…
• Symptoms of dysfunctionally low conflict
– Deny differences
– Repress controversial information
– Prohibit disagreements
– Avoid interactions
– Walk away from conflict episode
51
Reducing Conflict
– Lose-lose methods: parties to the conflict
episode do not get what they want
– Win-lose methods: one party a clear winner;
other party a clear loser
– Win-win methods: each party to the conflict
episode gets what he or she wants
52
Increasing Conflict
• Increase conflict when it is dysfunctionally
low
– Heterogeneous groups: members have
different backgrounds
– Devil’s advocate: offers alternative views
– Organizational culture: values and norms that
embrace conflict and debate
53
Indirect conflict management approaches
– Reduced interdependence.
– Appeals to common goals.
– Hierarchical referral.
– Alterations in the use of mythology and scripts.
54
Indirect conflict management approaches…
Reduced interdependence.
– Used for adjusting level of interdependency when
work-flow conflicts exists.
– Options.
• Decoupling.
• Buffering.
• Linking pins.
55
Indirect conflict management approaches…
56
Indirect conflict management approaches…
Hierarchical referral.
– Makes use of the chain of command for conflict
resolution.
– Problems with hierarchical referral.
• May not result in true conflict resolution.
• Possibility of inaccurate diagnosis of causes of conflict,
resulting in only superficial resolution.
• Superiors may attribute conflict to poor interpersonal
relationships.
57
Indirect conflict management approaches…
58
Direct conflict management approaches
59
Direct conflict management approaches…
Avoidance.
– Unassertive and uncooperative.
– Downplaying disagreement.
60
Direct conflict management approaches…
Accommodation or smoothing.
– Unassertive and cooperative.
– Letting the other’s wishes rule.
61
Direct conflict management approaches…
Compromise.
– Moderate assertiveness and moderate
cooperativeness.
– Working toward partial satisfaction of everyone’s
concerns.
– Seeking acceptable rather than optimal solutions
so that no one totally wins or loses.
62
Direct conflict management approaches…
63
Direct conflict management approaches…
64
Direct conflict management approaches…
65
Direct conflict management approaches…
66
Reducing Conflict
– Lose-lose methods: compromise
– Win-lose methods: dominance
– Win-win methods: problem solving
67
Reducing Conflict (Cont.)
• Win-win methods
– Problem solving: find root causes
– Integration: meet interests and desires of all
parties
– Superordinate goal: desired by all but not
reachable alone
68
Reducing Conflict (Cont.)
• Win-lose methods
– Dominance
• Overwhelm other party
• Overwhelms an avoidance orientation
– Authoritative command: decision by person in
authority
– Majority rule: voting
69
Reducing Conflict (cont.)
• Lose-lose methods
– Avoidance
• Withdraw, stay away
• Does not permanently reduce conflict
– Compromise
• Bargain, negotiate
• Each loses something valued
– Smoothing: find similarities
70
Conflict Resolution Techniques
– Problem solving – Bringing in outsiders
– Superordinate goals – Restructuring the
– Expansion of resources organization
– Avoidance
– Appointing a devil’s
– Smoothing
advocate
– Compromise
– Authoritative command
– Altering the human
variable
– Altering the structural
variables
– Communication
71
Interpersonal Conflict Handling Styles
Avoiding Style
Unassertive and uncooperative
Forcing Style
Assertive and uncooperative
Accommodating Style
Unassertive and cooperative
Collaborating Style
Assertive and cooperative
Compromising Style
Intermediate level of assertive and cooperative behaviors
72
When Should the Avoiding Style Be
Used to Handle Interpersonal Conflicts?
73
When Should the Forcing Style Be
Used to Handle Interpersonal Conflicts?
74
When Should the Accommodating Style Be
Used to Handle Interpersonal Conflicts?
75
When Should the Collaborating Style Be
Used to Handle Interpersonal Conflicts?
76
When Should the Compromising Style Be
Used to Handle Interpersonal Conflicts?
77
Stage V: Outcomes
• Functional • Dysfunctional
– Increased group performance – Development of discontent
– Improved quality of decisions – Reduced group effectiveness
– Stimulation of creativity and – Retarded communication
innovation
– Reduced group cohesiveness
– Encouragement of interest
and curiosity – Infighting among group
members overcomes group
– Provision of a medium for goals
problem-solving
• Creating Functional Conflict
– Creation of an environment
for self-evaluation and – Reward dissent and punish
change conflict avoiders
78
Negotiation
• Negotiation (Bargaining)
– A process in which two or more parties exchange
goods or services and attempt to agree on the
exchange rate for them
– The process of making joint decisions when the parties
involved have different preferences.
– Workplace disagreements arise over a variety of matters.
79
Negotiation goals and outcomes.
– Substance goals.
• Outcomes that relate to content issues.
– Relationship goals .
• Outcomes that relate to how well people involved in
the negotiations and any constituencies they represent
are able to work with one another once the process is
concluded.
80
Effective negotiation
81
Ethical aspects of negotiation
82
Organizational settings for negotiation
– Two-party negotiation.
– Group negotiation.
– Intergroup negotiation.
– Constituency negotiation.
83
Culture and negotiation
84
Basic negotiation strategies
Distributive negotiation.
– Focuses on positions staked out or declared by the
conflicting parties.
– Parties try to claim certain portions of the existing pie.
Integrative negotiation.
– Sometimes called principled negotiation.
– Focuses on the merits of the issues.
– Parties try to enlarge the available pie.
85
Basic negotiation strategies…
Distributive negotiations
Involve win–lose, fixed-amount situations wherein one
party’s gain is another party’s loss
Negotiation that seeks to divide up a fixed amount of
resources; a win-lose situation
Integrative negotiations
Involve joint problem solving to achieve results benefiting both
parties
Negotiation that seeks one or more settlements that
can create a win-win solution
86
Distributive negotiation
87
Distributive negotiation — cont.
– Bargaining zone.
• The range between one party’s minimum reservation
point and the other party’s maximum reservation point.
• A positive bargaining zone exists when the two parties’
points overlap.
• A positive bargaining zone provides room for
negotiation.
88
Integrative negotiation
89
Integrative negotiation — cont.
90
Integrative negotiation — cont.
– Good information.
91
Integrative negotiation — cont.
Supportive attitudes.
– Integrative agreements require that each party
must:
• Approach the negotiation with a willingness to trust the
other party.
• Convey a willingness to share information with the
other party.
• Show a willingness to ask concrete questions of the
other party.
92
Integrative negotiation — cont.
Constructive behaviors.
– Reaching integrative agreements depends on the
negotiator’s ability to:
• Separate the people from the problem.
• Focus on interests rather than positions.
• Avoid making premature judgments.
• Keep alternative creation separate from evaluation.
• Judge possible agreements on an objective set of
criteria or standards.
93
Integrative negotiation — cont.
Good information.
– Each negotiation party must know what he/she
will do if an agreement can’t be reached.
– Each party must understand the relative
importance of the other party’s interests.
94
Distributive versus Integrative
Bargaining
Bargaining Characteristic Distributive Bargaining
Integrative Bargaining
Goal Get all the pie you can Expand the pie
95
Basic Types of Negotiation
Attitudinal structuring
The process by which conflicting parties seek to
establish desired attitudes and relationships
Intraorganizational negotiations
Involve sets of negotiators representing different
groups, and each set of negotiators tries to build
consensus for agreement to resolve intragroup
conflict before dealing with the other group’s
negotiators
96
Matrix of Negotiated Outcomes
STRATEGY OF PERSON A
Integrative Distributive
Outcome: Outcome:
Great for Person A Mediocre for Person A
Terrible for Person B Mediocre for Person B
Outcome: Outcome:
Good for Person A Terrible for Person A
Good for Person B Great for Person B
Integrative Distributive
STRATEGY OF PERSON B
Source: Adapted from Anderson, T. Step into my parlor: A survey of strategies and
techniques for effective negotiation. Business Horizons, May-June 1992, 75.
97
Bargaining Tactics and the Bargaining Zone
• Distributive Tactics
– Make an aggressive first offer
– Reveal a deadline
• Integrative Tactics
– Bargain in teams
– Put more issues on the table
– Don’t compromise
98
The Negotiation Process
• BATNA
– The Best Alternative To a Negotiated Agreement
– The lowest acceptable value (outcome) to an
individual for a negotiated agreement
• The “Bottom Line” for negotiations
99
Disputes and Negotiation
• Bargaining as Compromise
– Participants negotiate mutually shared rules and then
cooperate within these rules to gain a competitive
advantage over opponent
– Bargaining and Negotiation are interchangeable
– Organizational Responses (Disputing Process Instrument (DPI) Morrill
& Thomas, 1992)
• Aggressiveness - expense of others
• Authoritativeness - resources of social position
• Observability visible to social audience
– Seven Conflict Behaviors (DPI)
100
Individual Differences in Negotiation
Effectiveness
• Personality Traits
– Extroverts and agreeable people weaker at distributive
negotiation – disagreeable introvert is best
– Intelligence is a weak indicator of effectiveness
• Mood and Emotion
– Ability to show anger helps in distributive bargaining
– Positive moods and emotions help integrative bargaining
• Gender
– Men and women negotiate the same way, but may experience
different outcomes
– Women and men take on gender stereotypes in negotiations:
tender and tough
– Women are less likely to negotiate
101
Conflict Styles
• Strategy Effectiveness
– Adapt to the Situation
– Be Fair and Objective
– Appropriate and Effective Communication
– Mutual Awareness
– Open-minded Attitudes
– Willingness to Ignore Power Issues
– Problem-Solving Procedures
102
Characterizing Conflict Styles
• 5 Basic Conflict Styles
– Withdrawing (Avoiding)
– Smoothing (Accomodating)
– Forcing (Dominating; Competing)
– Confronting (Collaborating, Problem Solving, Integrating)
– Compromising
• Ethical Climate Determines Effectiveness of Conflict Style
– Formal Procedures / Rules
– Concern for other, self, and issue
103
Third-Party Negotiations
• Four Basic Third-Party Roles
– Mediator
• A neutral third party who facilitates a negotiated solution by using
reasoning, persuasion, and suggestions for alternatives
– Arbitrator
• A third party to a negotiation who has the authority to dictate an
agreement.
– Conciliator
• A trusted third party who provides an informal communication link
between the negotiator and the opponent
– Consultant
• An impartial third party, skilled in conflict management, who
attempts to facilitate creative problem solving through
communication and analysis
104
strategies involved in negotiation
105
Key Tasks for a Mediator
106
Common negotiation pitfalls
107
6.3 communications
• Understanding conflict is critical to
communication success
• Communication constitutes the essence of
conflict in that it undergirds the formation of
opposing issues, frames perceptions of the felt
conflict, translates emotions and perceptions
into conflict behaviors, and sets the stage for
future conflicts (Putnam & Poole, 1987)
108
Communication as Negotiation
• Transformational power that transcends
notions of technical and instrumental
rationality
• Participants define the conflict and its
environment
• Rationality and Effectiveness (and
Appropriateness) help define many aspects of
organizational life
109
Communication as Negotiation…
• First, understand the factors contributing to conflict
• Next, we identify the methods for resolving conflict
Two Forms of Conflict Resolution
• Distributive Conflict Resolution
• Winning through the use of negative behaviors
• Disagreement to prevent others from reaching their goals
• Serves personal needs and goals at the expense of others
• Conflict as WIN lose
110
Communication as Negotiation…
• Integrative Conflict Resolution
• Foster cooperation and shared solutions
• Modifying ideas, bargaining for an acceptable
compromise
• Search for solutions and provide support for others
• Cooperative and not mutually exclusive
• Objective is to share values, highlight common
objectives, and help achieve consensus
• Transition from distributive to integrative conflict
resolution occurs when the need to accomplish a
common goal is recognized.
111
Ethical Issues in
Conflict in Organizations
• Tolerance for conflict
– Manager with a high tolerance for conflict; keeps
conflict levels too high for subordinates
– Should such managers reveal their intentions
about desired conflict levels?
– Full disclosure: subordinates could leave the
group if conflict levels became dysfunctionally
stressful
– Ethical question applies equally to newly hired
employees
112
Ethical Issues in
Conflict in Organizations (Cont.)
• Deliberately increasing conflict is an effort to
guide behavior in a desired direction
– Subtle methods of increasing conflict (forming
heterogeneous groups) connote manipulation
– Full disclosure: manager states his intention to
use conflict to generate ideas and innovation
– If people are free to join a group or not, the
ethical issue likely subsides
113
Ethical Issues in
Conflict in Organizations (Cont.)
• Experiencing intrapersonal conflict
– Requests to act against one's moral values
– Observing behavior that one considers unethical
• Reduce intrapersonal conflict
– Report unethical acts
– Transfer to another part of the organization
– Quit
114
Ethical Issues in
Conflict in Organizations (Cont.)
• Different cultures place different values on
conflict
– Optimal conflict levels vary among countries
– Lower levels conflict in collectivistic countries than
individualistic countries
115
Summary
• Conflict can be constructive or destructive
• Reduce excessive conflict by using:
– Competition
– Collaboration
– Avoidance
– Accommodation
– Compromise
• Integrative negotiation is a better long-term
method
116
Individual Assignment on Conflict Management
Due Date Dec. 25, 2016
117
Unit VII Organizational Structure,
Culture and Change
7.0 Introduction
7.1 Mechanistic and organic organizations
7.2 Elements of Organizational Structure
7.3 Organizational design and culture
7.4 Change management
118
Unit Objectives
1. Define key elements of organizational structure, including both
structural and structuring dimensions.
2. Explain how corporate and business strategies relate to
structure.
3. Explain how environment, technology, and size relate to
structure.
4. Define organizational culture, and discuss the competing-values
cultural framework.
5. Discuss socialization.
6. Describe cultural audits and subcultures.
7. Explain the importance of a fit between individual values and
organizational culture.
119
7.0 INTRODUCTION
• An organization is a collection of people
working together in a coordinated and
structured fashion to achieve one or more
goals.
• Organizations are strongly influenced by the
people that form part of them.
• Organizations can take in part of the
personality of the people within them and
their attitudes, perceptions and behaviors
affect how an organization will operate.
120
INTRODUCTION …
the linking of
departments and
jobs within an
organization
Key Organizational Design
Processes
The process of deciding
how to divide the work
in an organization
Four Dimensions
• Goal orientation
• Time orientation
• Interpersonal orientation
• Formality of structure
Horizontal
Differentiation
• Hierarchical referral
• Rules and procedures
• Plans and schedules
• Positions add to the organization structure
• Management information system
Horizontal
Integration
• Liaison roles
• Task forces
• Integrator positions
• Teams
Organizational Design
• Management’s Role
– Redesign: needs change as organization's needs
change
Organizational Design
• Management’s Role
Organizational Design
• Building blocks of organization are arranged to
improve effectiveness and adaptive capacity
– Authority
– Responsibility
– Accountability
– Information
– Rewards
Organizational Design
• When a design should be reconsidered
– Severe performance problems
– Change in environment that affects internal
policies
– New programs or product lines
– Leadership change
Why Are There Different Types of
Organizations?
• Depending on what the product or service is, the
management has to structure the organization to
met the customer’s needs.
• Organization
– A group of people working together to attain common
goals.
• Organizational Goals
– Objectives that management seeks to achieve in pursuing
the firm’s purpose.
• Strategies
– Specific action plans that enable the organization to
achieve its goals and thus its purpose.
Organization Structure
• Organizational Structure
– The system of task, reporting, and authority relationships
within the organization.
• Structure – the form and function of the organization’s activities
and how these parts fit together
• Organization Chart
– A diagram showing all people, positions, reporting
relationships, and lines of formal communication.
Classic Views of Structure: The
Universal Approach
• In the universal approach to organization design
(also called the classical organization theory),
prescriptions or propositions are designed to work in
any circumstance.
• It prescribes the “one best way” to structure the
jobs, authority, and reporting relationships of the
organization, regardless of factors such as the
organization’s external environment, the industry,
and the type of work to be done.
Contingency Approaches to
Organizational Design
• Under the contingency approach to organization
design, the desired outcomes for the organization
can be achieved in several ways.
• The contingency factors include the:
– Strategy of the organization
– Technology
– Environment
– Organization’s size
– Social system within which the organization operates
The Structural-Imperatives Approach
Contingency Factors
• Strategy
– The plans and actions necessary to achieve organizational
goals.
• Size
– Generally, larger organizations have a more complex
structure than smaller ones in that large size is associated
with greater specialization of labor, a larger span of
control, more hierarchical levels, and greater formalization.
– Organizational downsizing aims to reduce the size of
corporate staff and middle management to reduce costs.
Contingency Factors (continued)
• Technology
– The mechanical and intellectual processes that transform
inputs into outputs.
– Although many different ways to evaluate and measure
technology are available, there is general agreement that
technology is a very important determinant of organization
design.
• Environment
– Everything outside the boundaries of the organization,
including people, other organizations, economic factors,
objects and events.
Contingency Factors (continued)
• General Environment
– Includes the broad set of dimensions and factors within
which the organization operates, including the:
• Political-legal factor
• Sociocultural factor
• Technological factor
• Economic factor
• International factor
• Task Environment
– Includes specific organizations, groups, and individuals
who influence the organization.
Aspects of the Environment
• Environmental Uncertainty
– When managers have little information about
environmental events and their impact on the organization
• Environmental Complexity
– The number of environmental components that impinge
on organizational decision making
• Environmental Dynamism
– The degree to which environmental components that
impinge on organizational decision making change
Mechanistic and Organic Designs
• Mechanistic Structure
– Primarily hierarchical, interactions and communications
typically are vertical, instructions come from the boss,
knowledge is concentrated at the top, and loyalty and
obedience are required to sustain membership
• Organic Structure
– Set up like a network; interactions and communications
are horizontal, knowledge resides wherever it is most
useful to the organization, and membership requires a
commitment to the organization’s tasks
Mintzberg’s Coordinating Mechanisms
• Henry Mintzberg described five methods of
coordinating the actions of organizational
participants:
1. Mutual adjustment
2. Direct supervision, and standardization of
3. Input skills
4. Work processes
5. Outputs
Mintzberg’s Five Coordinating Mechanisms
161
Organization Design Options
Virtual Design
Complex
Network Design
Environmental
Multinational Design
Factors
Multidivisional Design
Product Design
Place Design
10
Designing Organizational Structure
• Organizational structure: Formal system of task and
reporting relationships that coordinates and motivates
organizational members so that they work together to
achieve organizational goals
• Organizational design: Process by which managers make
specific organizing choices that result in a particular kind
of organizational structure
7-
Factors Affecting Organizational Structure
7-
Determinants of Structure
• The Organizational Environment
– The quicker the environment changes, the more
problems face managers.
– Structure must be more flexible (i.e., decentralized
authority) when environmental change is rapid.
Determinants of Structure
• Strategy
– Different strategies require the use of different
structures.
• A differentiation strategy needs a flexible structure, low
cost may need a more formal structure.
• Increased vertical integration or diversification also
requires a more flexible structure.
Chandler: Structure follows strategy
Determinants of Structure
• Technology
– The combination of skills, knowledge, tools,
equipment, computers and machines used in the
organization.
– More complex technology makes it harder for
managers to regulate the organization.
• Organizations utilizing complex technology require a
flexible structure to be managed efficiently.
• Organizations utilizing routine technology can be more
readily managed using a formal structure.
• Organizations with high employee interaction
requirements need a flexible structure.
Types of Technology
• Small Batch Technology
– Small quantities of one-of-a-kind products are
produced by the skills of the workers who work
together in small groups.
• Appropriate structure is decentralized and flexible.
• Mass Production Technology
– Automated machines that are programmed to
make high volumes of standard products.
• Formal structure is the best choice for workers who
must perform repetitive tasks.
Determinants of Structure
• Human Resources
– Highly skilled workers whose jobs require working
in teams usually need a more flexible structure.
– Higher skilled workers (e.g., CPA’s and doctors)
often have internalized professional norms.
• Managers must take into account all four
factors (environment, strategy, technology and
human resources) when designing the
structure of the organization.
Organization Structure Issues
• How to group tasks into individual jobs.
• How to group jobs into functions and
divisions.
• Coordinating functions and divisions.
• Allocating authority.
• Types of integrating mechanisms.
Grouping Tasks Into Jobs: Job Design
• Job Design
– The process by which managers decide how to divide tasks
into specific jobs.
Enhance specification and
• Division of Labor independence
– Splitting the work to be performed into particularly
impersonal tasks and assigning tasks to individual workers.
– The appropriate division of labor results in an effective and
efficient workforce. Internal cohesion and
• Job Simplification external decoupling
– Reducing the tasks each worker performs: too much
simplification results in boredom.
Job Design
• Job Enlargement Increase the width of task
– Increasing the number of tasks for a given job by
changing the division of labor.
– The intention is to reduce boredom and fatigue by
increasing variety of tasks performed.
• Job Enrichment Increase the depth of task
– Increasing the degree of responsibility a worker
has over a job.
• Intended to increase worker involvement and self-
discretion.
• Requires a flexible organizational structure to allow
employees to act flexibly and creatively.
Forms of work coordination
• Informal communication
– sharing information
– high media-richness
– important in teams
• Formal hierarchy
– direct supervision
– common in larger firms
– problems costly, slow, less popular with young staff
• Standardisation
– formal instructions
© AAP Image/Dave Hunt
– clear goals/outputs
– training/skills
Coordinating Functions and Divisions:
Allocating Authority
• Authority
– The power to hold people accountable for their
actions and to make decisions concerning the
use of organizational resources.
• Hierarchy of Authority
– An organization’s chain of command, specifying
the relative authority of each manager.
• Span of Control: refers to the number of workers a
manager manages.
Authority vs. responsibility vs. accountability
Allocating Authority …
• Span of Control
– The number of subordinates who report directly to a
manager.
• Line Manager
– Managers in the direct chain of command who have
authority over people and resources lower down.
– Primarily responsible for the production of goods or
services.
• Staff Manager
– Managers who are functional-area specialists that give
advice to line managers.
Elements of organisational structure
Department- Span of
alisation control
Organisational
structure
elements
Formalisation Centralisation
Span of control
• Number of people directly
reporting to the next level
• Assumes coordination through
direct supervision
• Wider span of control possible
when
– used with other coordinating
methods
– subordinates’ tasks are similar
– tasks are routine
• Flatter structures require wider
span (if same number of people
in the firm)
17
8
Forces for (de)centralisation
Centralisation
• Organisational crises
• Management desire for control
• Increase consistency, reduce costs
Decentralisation
Mechanistic vs organic structures
Mechanistic Organic
Complex Simple
• Many elements (such as • Few environmental
stakeholders) elements
• Decentralise • Less need to decentralise
Org environment and structure...
Diverse Integrated
• Variety of products,
• Single product, client,
clients, locations
location
• Divisional form aligned
• Don’t need divisional form
with the diversity
Hostile Munificent
• Competition and resource • Plenty of resources and
scarcity product demand
• Use organic structure for • Less need for organic
responsiveness structure
A continuum of organizational design alternatives: from
bureaucratic to adaptive organizations.
183
Simultaneous “loose-tight” properties of
team structures support efficiency and
innovation.
184
The Organizational Life Cycle
185
Major issues in subsystems design
186
Effects of departmentalisation
• Establishes work teams and supervision
structure
192
Change management
193
ORGANIZATIONAL DESIGN AND CULTURE
195
Organizational Structure
196
Depicting the Organization
• Organization Chart
– A chart that shows the
structure of the
organization including
the title of each
manager’s position and,
by means of connecting
lines, who is accountable
to whom and who has
authority for each area.
197
Organization Chart
Information Services Group
Developer
Cataloger
Systems Admin
Cataloger
Taxonomy Designer
198
Organization Design and
Structure
• Organization design
– A process in which managers develop or change
their organization’s structure
• Work specialization
– A component of organization structure that
involves having each discrete step of a job done by
a different individual rather than having one
individual do the whole job
199
Organizational Structure
• Defines how job tasks are formally
––Divided
––Grouped
––Coordinated
• Six key elements
––Work specialization
––Departmentalization
––Chain of command
––Span of control
––Centralization & decentralization
––Formalization
• Controls, coordinates & motivates employees
200
Stages of Organizational
Development
• Simple structure
– An organization that is low in specialization and
formalization but high in centralization
• Functional structure
– An organization in which similar and related
occupational specialties are grouped together
• Divisional structure
– An organization made up of self-contained units
201
Stages of Organizational
Development (cont’d)
• Matrix structure
– An organization in which specialists from functional
departments are assigned to work on one or more projects
led by a project manager
• Team-based structure
– An organization that consists entirely of work groups or
teams
• Boundaryless organization
– An organization that is not defined or limited by
boundaries or categories imposed by traditional structures
202
7.1 Mechanistic and organic organizations
• Mechanistic organization
– The bureaucracy; a structure that is high in
specialization, formalization, and centralization
• Organic organization
– An adhocracy; a structure that is low in
specialization, formalization, and centralization
• Structure follows strategy
203
Burns and Stalker
204
Comparison between Mechanistic and
Organic Forms
FEATURE MECHANISTIC ORGANIC
Corporate
Growth
Strategy
Diversification
206
Diversification Strategy and Structure
Diversification Structure
Single product Functional
207
Business Strategy
How a firm competes for success against other
organizations in a particular market.
• Low cost/low price
• Product/service differentiation
• Supporting structure including strategic business units
– SBUs
208
Environment and Integration
Lateral
Relations
Information Processing
Increasing Richness of
Information
Technology
Self-Contained
Tasks
Slack
Resources
Lateral
Processes
Managerial
Teams
Linking Roles
Integrating Roles
210
Technology and Structure
Mass Production
Technology
Process
Small-Batch
Technology
Manufacturing Production
Technology
Mass
Customization
211
Technology and Structure
Task Variability Task Analyzability
Routine Craft
Four categories
of technology
Engineering Nonroutine
212
Organizations and Technology
Engineering Non-Routine
Routine Craft
Low Mass-Production
Public School
Firm
214
Organizational Structure: Control
• Chain of command
– The management principle that no person should report to more than
one boss
• Span of control
– The number of subordinates a manager can direct efficiently and
effectively
• Authority
– The rights inherent in a managerial position to give orders and expect
them to be obeyed
• Responsibility
– An obligation to perform assigned activities
• Power
– An individual’s capacity to influence decisions
215
The Minimum Chain of Command
• Managers should carefully evaluate:
– Do the organization have the right number of
middle managers?
– Can the structure be altered to reduce levels?
• Centralized and Decentralized of Authority
– Decentralization puts more authority at lower
levels and leads to flatter organizations.
• Works best in dynamic, highly competitive
environments.
– Stable environments favor centralization of
authority.
Chain of Command
217
Internal coordination
Integrating Mechanisms
222
Authority Versus Power
223
Types of Power
Power based on one’s position in
Legitimate the formal hierarchy
226
Organizing Departments by Function
• Functional Departmentalization
– A form of organization that groups a company’s
activities around essential functions such as
manufacturing,
sales, or finance.
227
Functional Departmentalization
228
Organizing Departments by Self-
Contained Divisions/Purposes
• Product Departmentalization
– Grouping departments around a firm’s products
or services, or each family of products or
services; also referred to as a “divisional”
organization.
• Customer Departmentalization
– Self-contained departments are organized to
serve the needs of specific groups of
customers.
229
Divisional Organization
for a Pharmaceuticals Company
230
Customer Departmentalization,
Grayson Steel Company
231
Organizing Departments by Self-
Contained Divisions/Purposes (cont’d)
• Marketing-channel Departmentalization
– Departments focus on particular marketing
channels, such as drugstores or grocery stores.
• Geographic (Territorial)
Departmentalization
– Separate departments are established for each
of the territories in which the enterprise does
business.
232
Marketing Channel
Departmentalization
233
Divisional Organizations
Facilitate Coordination
234
Checklist 7.2
Functional vs. Divisional Organizations
Functional Organization Advantages
1. It is simple, obvious, and logical.
2. It fosters efficiency.
3. It can simplify executive hiring and training.
4. It can facilitate the top manager’s control.
Functional Organization Disadvantages
1. It increases the workload on the executive to
whom the functional department heads report.
2. It may reduce the firm’s sensitivity to and service
to the customer.
3. It produces fewer general managers.
235
Checklist 7.2 (cont’d)
Functional vs. Divisional Organizations
Divisional Organization Advantages
1. The product or service gets the single-
minded attention of its own general
manager and unit, and its customers may
get better, more responsive service.
2. It’s easier to judge performance.
3. It develops general managers.
4. It reduces the burden for the company’s
CEO.
236
Checklist 7.2 (cont’d)
Functional vs. Divisional Organizations
Divisional Organization Disadvantages
1. It creates duplication of effort.
2. It may diminish top management’s
control.
3. It requires more managers with general
management abilities.
4. It can breed compartmentalization.
237
Creating Matrix Organizations
• Matrix Organization
– An organization structure in which employees are
permanently attached to one department but also
simultaneously have ongoing assignments in
which they report to project, customer, product,
or geographic unit heads.
238
Matrix Organization Departmentalization
239
Matrix Organizations
Advantages Disadvantages
• Access to expertise. • Confusion of
• Stability of permanent command.
department • Power struggles and
assignments for
employees. conflicts.
• Allows for focus on • Lost time in
specific projects, coordinating.
products, or • Excess overhead for
customers. managing matrix
functions.
240
Departmentalization in Practice: A Hybrid
241
e.g. The New Summer Tour Organization
242
Network-based Organizations
• Organizational Network
– A system of interconnected or cooperating
individuals.
• Informal Networks
– Communication pathways and relationships
between individuals in an organization that do not
necessarily conform to the formal chain of
command and communication networks of an
organization.
243
Network-based Organizations (cont’d)
• Formal Organizational Network
– A recognized group of managers or other
employees assembled by the CEO and the other
senior executive team, drawn from across the
company’s functions, business units, geography,
and levels.
• Electronic Organizational Networks
– Networking through technology-supported
devices such as e-mail, video-conferencing, and
collaborative computing software like Lotus Notes.
244
Formal vs. Social Structure
Rarely do the
communication patterns
match the formal
structure
245
Network-based Organizations (cont’d)
• Team-Based Organizations
– Team
• A group of people committed to a common purpose, set of
performance goals, and approach for which they hold themselves
mutually accountable.
• Horizontal Corporations
– A structure that is organized around customer-oriented
processes performed by multidisciplinary cross-functional
teams rather than by formal functional departments.
246
The Horizontal Corporation
247
Checklist 7.3
Building Horizontal Organizations
Make responsibilities overlap. Design individual jobs
as broadly as possible, and keep the number of job
titles to a minimum.
Base rewards on unit performance to emphasize the
importance of working together.
Change the physical layout to promote collective
responsibility. Let people see each other’s work.
Redesign work procedures, provide computer
terminals, use the e-mail network, and make sure
managers are available.
248
How to Create a Horizontal
Corporation
Source: Source: Reprinted from the December 20, 1993, issue of Business Week by special
permission. Copyright © 1993 by the McGraw-Hill Companies, Inc.
249
Other Organization Types
• Federal Organization
– An organization in which power is distributed between a
central unit and a number of constituents, but the central
unit’s authority is intentionally limited.
• Virtual Organization
– A temporary network of independent companies that use
information technology to share skills, reduce costs, and
provide access to one another’s markets.
– Its success depends on each of the individual firms’
responsibility and self-interest to accomplish the network’s
purpose.
250
Effect of Technology on Structure
251
When Organizing:
Always Keep Your Goals in Mind
• Business environments are in a constant state of
change.
• An organization’s strategy must be adapted to
changes in its competitive environment.
• Structure follows strategy.
– Strategic change creates the need for restructuring the
organization to acquire new and different knowledge,
skills and abilities.
252
Checklist 7.3
What Determines Organization Structure
Environment. Fast-changing environments require
organic structures; slowly changing environments favor
mechanistic structures.
Technology. Unit and continuous production processes
favor organic structures. Mass production processes
favor mechanistic structures.
Goals. Ask, “What are the main goals we want to
achieve via this organization?”
Pros and cons. Each approach to departmentalization
has pros and cons.
Logic and common sense.
253
What Are Learning Organizations?
1. Adopt an organic, networked organizational form.
2. Encourage their employees to learn and to confront
their assumptions
3. Have employees who share a common vision
4. Have the capacity
• to adapt to unforeseen situations
• to learn from their own experiences
• to shift their shared mindsets
• to change more quickly, broadly, and deeply than ever
before.
254
Abolishing Organizational Boundaries
• Boundaryless Organization
– An organization in which management strips
away the “walls” which typically separate
organizational functions and hierarchical
levels, through
the widespread use of
teams, networks, and
similar structural
mechanisms.
255
The Four Organizational Boundaries That
Matter
Source: Reprinted by permission of Harvard Business Review. “The Four Organizational Boundaries that Matter,” from “The
New Boundaries of the Boundaryless Company,” by Larry Hirschorn and Thomas Gilmore, May–June 1992. Copyright © 1992
by the President and Fellows of Harvard College. All rights reserved.
256
Managing Learning Organizations
• How to Streamline Organizational Decision Making
– Downsize
– Reduce management layers
– Establish miniunits
• How to Cultivate Employees’ Personal Mastery
– Provide continuous learning opportunities.
– Foster inquiry and dialogue.
– Establish mechanisms to ensure that the organization is
continuously aware of and can interact with its
environment.
257
Challenges in Organization
• Merging separate organizations with different
structures
• Changing an existing organization to meet external or
internal changes in conditions
• Conflicts between departments or groups
• Interdependence between organizational units
• Centralization vs. decentralization
258
Methods for Achieving Coordination
• Mutual Adjustment • Appoint Staff Assistants
– Achieving coordination • Appoint Liaisons
through face-to-face
interpersonal interaction. • Appoint Committees
• Use Rules and Procedures • Organize Independent
Integrators
• Standardize
– An individual or a group
• Exercise Direct that coordinates the
Supervision: Use the activities of several
Chain of Command interdependent
departments, but is
• Divisionalize independent of them.
259
Managing Organizational Conflict
• Line–Staff Conflict
– Disagreements between a line manager and
the staff manager who is giving him or her
advice.
• How to Organize to Reduce Interunit
Conflict
– Appeal to power and
the chain of command
– Reduce interdependence
– Exchange personnel
260
Types of Interdependence
261
Centralization and Decentralization
• Centralization
– A function of how much decision-making
authority is pushed down to lower levels in an
organization; the more centralized an
organization, the higher the level at which
decisions are made
• Decentralization
– The pushing down of decision-making authority to
the lowest levels of an organization
262
Decentralize?
• Decentralized Organization
– Organizational authority for most departmental
decisions is delegated to the department heads.
– Control for major companywide decisions is maintained
at the headquarters office.
• Decentralization Rules:
– Decentralize decisions that affect only one division or
area and that would take a long time for upper
management to make.
– Centralize decisions that could adversely affect the
entire firm and that upper management can fairly
quickly and easily.
263
Problems With Size
• “There is a fairly common perception that large organizations tend to
behave much less “intelligently” than their size suggests. They often
lose the decisiveness seen in small groups and may seem "stupid" to
people within them who work with ideas and knowledge.”
264
Hammer vs. Deming
• What tradeoffs did Deming and Hammer make in
their approaches to designing organizations?
• Did you notice who was given power in Deming’s
approach vs. Hammer?
• What is driving NYNEX to make changes in their
organization structure?
• What component of the organization is hardest to
change?
• Do you see the same issues arising in the “War at
Work” article?
265
Types of Organizational Designs
• Organizational designs fall into two categories,
traditional and contemporary.
• Traditional designs include simple structure,
functional structure, and divisional structure.
• Contemporary designs would include team
structure, matrix structure, project structure,
boundaryless organization, and the learning
organization. I am going to define and discuss
each design in order to give an understanding of
the organizational design concept.
266
I. Traditional Designs
1. Simple Structure
A simple structure is defined as a design with low
departmentalization, wide spans of control, centralized
authority, and little formalization. This type of design is very
common in small start up businesses. For example in a
business with few employees the owner tends to be the
manager and controls all of the functions of the business.
Often employees work in all parts of the business and don’t
just focus on one job creating little if any departmentalization.
In this type of design there are usually no standardized
policies and procedures. When the company begins to expand
then the structure tends to become more complex and grows
out of the simple structure.
267
I. Traditional Designs…
2. Functional Structure
A functional structure is defined as a design
that groups similar or related occupational
specialties together. It is the functional
approach to departmentalization applied to
the entire organization.
268
I. Traditional Designs…
3. Divisional Structure
A divisional structure is made up of separate,
semi-autonomous units or divisions. Within one
corporation there may be many different
divisions and each division has its own goals to
accomplish. A manager oversees their division
and is completely responsible for the success or
failure of the division. This gets managers to
focus more on results knowing that they will be
held accountable for them. 269
II. Contemporary Designs
1. Team Structure
A team structure is a design in which an organization is made
up of teams, and each team works towards a common goal.
Since the organization is made up of groups to perform the
functions of the company, teams must perform well because
they are held accountable for their performance. In a team
structured organization there is no hierarchy or chain of
command. Therefore, teams can work the way they want to,
and figure out the most effective and efficient way to perform
their tasks. Teams are given the power to be as innovative as
they want. Some teams may have a group leader who is in
charge of the group.
270
II. Contemporary Designs…
2. Matrix Structure
A matrix structure is one that assigns specialists from different
functional departments to work on one or more projects. In an
organization there may be different projects going on at once.
Each specific project is assigned a project manager and he has
the duty of allocating all the resources needed to accomplish the
project. In a matrix structure those resources include the
different functions of the company such as operations,
accounting, sales, marketing, engineering, and human resources.
Basically the project manager has to gather specialists from each
function in order to work on a project, and complete it
successfully. In this structure there are two managers, the project
manager and the department or functional manager.
271
II. Contemporary Designs…
3. Project Structure
A project structure is an organizational structure in
which employees continuously work on projects. This
is like the matrix structure; however when the
project ends the employees don’t go back their
departments. They continuously work on projects in
a team like structure. Each team has the necessary
employees to successfully complete the project. Each
employee brings his or her specialized skill to the
team. Once the project is finished then the team
moves on to the next project.
272
II. Contemporary Designs…
4. Autonomous Internal Units
Some large organizations have adopted this
type of structure. That is, the organization is
comprised of many independent decentralized
business units, each with its own products,
clients, competitors, and profit goals. There is
no centralized control or resource allocation
273
II. Contemporary Designs…
5. Boudaryless Organization
A boundaryless organization is one in which its design is not defined by, or
limited to, the horizontal, vertical, or external boundaries imposed by a
predefined structure. In other words it is an unstructured design. This structure
is much more flexible because there is no boundaries to deal with such as chain
of command, departmentalization, and organizational hierarchy. Instead of
having departments, companies have used the team approach. In order to
eliminate boundaries managers may use virtual, modular, or network
organizational structures. In a virtual organization work is outsourced when
necessary. There are a small number of permanent employees, however
specialists are hired when a situation arises. Examples of this would be
subcontractors or freelancers. A modular organization is one in which
manufacturing is the business. This type of organization has work done outside
of the company from different suppliers. Each supplier produces a specific piece
of the final product. When all the pieces are done, the organization then
assembles the final product. A network organization is one in which companies
outsource their major business functions in order to focus more on what they
are in business to do.
274
II. Contemporary Designs…
6. Learning Organization
A learning organization is defined as an organization that has
developed the capacity to continuously learn, adapt, and change.
In order to have a learning organization a company must have
very knowledgeable employees who are able to share their
knowledge with others and be able to apply it in a work
environment. The learning organization must also have a strong
organizational culture where all employees have a common goal
and are willing to work together through sharing knowledge and
information. A learning organization must have a team design
and great leadership. Learning organizations that are innovative
and knowledgeable create leverage over competitors.
275
Organizational Structure
Consists of three key elements:
2. Groupings of:
– individuals into departments
– departments into the total organization
276
7.3 Organizational design and culture
• Organizational Design
– The process of configuring organizations to meet environmental challenges
• Span of Control
– The number of persons directly reporting to a manager
277
Organizational Design
the linking of
departments and
jobs within an
organization
Key Organizational Design
Processes
The process of deciding
how to divide the work
in an organization
Four Dimensions
• Goal orientation
• Time orientation
• Interpersonal orientation
• Formality of structure
Horizontal
Differentiation
• Hierarchical referral
• Rules and procedures
• Plans and schedules
• Positions add to the organization structure
• Management information system
Horizontal
Integration
• Liaison roles
• Task forces
• Integrator positions
• Teams
Formalization - the degree Centralization - the degree
to which the organization to which decisions are
has official rules, made at the top of the
regulations and procedures organization
Hierarchy of Specialization -
Authority - the degree to
the degree of which jobs are
vertical
Basic narrowly
differentiation Design defined and
across Dimensions depend on
levels of unique
management expertise
Contextual Variables -
a set of characteristics that
influences the organization’s
design processes
Strategy
& Goals Environment
Size
Technological
Interdependence -
the degree of interrelatedness
of the organization’s various
technological elements
Relationship Between
Technology and Basic Task Variability
Design Dimensions Few Exceptions Many Exceptions
Environment
Strategic Dimension Predicted Structural
Characteristics
Innovation--to understand Low formalization
and manage new processes Decentralization
and technologies Flat hierarchy
Market differentiation--to Moderate to high complexity
specialize in customer Moderate to high
formalization Moderate centralization
preferences
Cost control--to produce High formalization
standardized products High centralization
efficiently High standardization
Low complexity
Structural dimensions
Level of formalization
Level of centralization
Level of specialization
Level of standardization
Level of complexity
Hierarchy of authority
Which characterize the organizational processes
Purposes
Designate formal
lines of authority
Designate formal
information-
processing patterns
Dysfunctional
Personality/Organization
Combinations
Schizoid Dramatic
Compulsive
Organizational Culture
The unwritten rules of behavior, or norms that are used to shape and
guide behavior, is shared by some subset of organization members and is
taught to all new members of the company.
• Decentralization
– Top management allows lower levels to make many decisions
• Empowerment
– Gives people the freedom to do their jobs as they think best
• Delegation
– The process of entrusting work to others
304
Organizational design and culture…
305
Organizational design and culture…
• Differentiation
– The degree of difference between subsystems in an
organization
• Integration
– The level of coordination between subsystems in an
organization
• Process Reengineering
– Increase operating efficiency by reducing unnecessary
work steps and streamlining work processes.
306
Organizational Culture
• “A pattern of basic assumptions that the group
learned as it solved its problems of external
adaptation and internal integration, that has
worked well enough to be considered valid
and, therefore, to be taught to new members
as the correct way to perceive, think and feel
in relation to those problems.”
Edgar Schein, 1992
307
Artifacts – symbols of
culture in the physical
and social work environment
Values
Espoused: what members of Levels of
an organization say they value Organizational
Enacted: reflected in the way
Culture
individuals actually behave
Values
Espoused: what members of Greater level
an organization say they value of awareness
Enacted: reflected in the way
individuals actually behave
310
Developing Organizational Culture
Shared
Values
Individual and
Group Behavior
311
Types of Organizational Culture
Clan Adhocracy
Discretion
Flexibility/
Leadership Leadership
Mentors and Coaches Entrepreneurs and
Innovators
Effectiveness Effectiveness
Cohesion and Morale Creativity and Innovation
Hierarchy Market
Stability/Control
Leadership Leadership
Monitors and Organizers Hard Drivers and
Competitors
Effectiveness Effectiveness
Efficiency and Order Goal Achievement and
Winning
Internal Focus/Integration External Focus/
Differentiation
312
Cultural Socialization
A process through which an organization imparts its
values to newcomers
Context Content
Social
Dynamics
313
Person-Organization Fit
314
Types of Personal Values
End Means
(Goal) (Behavior)
Values Values
315
Functions of Organizational Culture
316
Understanding
Organizational Culture
Antecedents Organizational Organizational Group & Social
Culture Structure & Processes
• Founder’s values Practices • Socialization
• Observable artifacts
• Industry & business • Reward systems • Mentoring
environment
• National culture • Organizational • Decision
• Espoused values making
• Senior leaders’ design
vision and behavior • Group
• Basic assumptions dynamics
• Communication
Collective • Influence &
Attitudes & empowerment
Organizational • Leadership
Behavior
Outcomes
• Work attitudes
• Effectiveness
• Job satisfaction
• Innovation &
stress • Motivation
317
Types of Cultures
• Constructive
– Valuing members, self-actualizing, affiliative, and
humanistic/encouraging normative beliefs (expected behavior or
conduct)
• Passive-defensive
– Approval-oriented, traditional and bureaucratic, dependent and
nonparticipative, punish mistakes but ignore success
• Aggressive-defensive
– Confrontation and negativism are rewarded, nonparticipative,
positional power, winning valued, competitiveness rewarded,
perfectionistic
318
Constructive Culture
Normative Organizational
Beliefs Characteristics
Participative, employee
Humanistic-
centered, and supportive
encouraging
High priority on constructive interpersonal
Affiliative
relationships, and focus on work group
satisfaction
319
Passive Defensive Culture
Normative Organizational
Beliefs Characteristics
Approval Avoid conflict, strive to be
liked by others, and
approval oriented
Conventional Conservative, bureaucratic,
and people follow the rules
320
Aggressive-Defensive Culture
Normative Organizational
Beliefs Characteristics
Oppositional Confrontation and
negativism rewarded
321
Organizational Culture Research
Suggests:
1) Organizational culture correlated with employee
attitudes and behavior
2) Congruence between an individual’s values and
the organization’s values associated with
organizational commitment, job satisfaction,
intentions to quit, and turnover
3) Organizational culture did not predict a
company’s financial performance
4) Mergers frequently failed due to incompatible
cultures
322
Theories on the relationship
between organizational culture
and performance
323
Strong Culture
an organizational culture with a consensus
to outsiders
324
Strong Cultures Facilitate Performance
BECAUSE
• They are characterized by goal
alignment
• They create a high level of motivation
because of shared values by the members
• They provide control without the
oppressive effects of bureaucracy
325
Fit Perspective
326
Fit Perspective
1.Competitive environment
2.Customer requirements
3.Societal expectations
327
Adaptive Culture
328
Adaptive vs. Nonadaptive Cultures
329
Most Important Elements
in Managing Culture
330
Organizational Socialization
• Phase 1: Anticipatory
• Phase 2: Encounter
331
Organizational Socialization Process
332
Organizational Socialization
333
Organizational Socialization
335
Outcomes of Socialization
336
How cultures are embedded in
organizations
• Formal/public statements
• Physical Layout
• Slogans, co. lingo
• Mentoring, modeling
• Explicit rewards, promotion criteria
• Stories, legends, myths
• Processes and outcomes, measurement
• Workflow and systems
337
Mentoring
338
Functions of Mentoring
• Career Functions
– Sponsorship
– Exposure-and-Visibility
– Coaching
– Protection
– Challenging
Assignments
• Psychological
Functions
– Role Modeling
– Acceptance-and-
Confirmation
– Counseling
– Friendship
339
Organizational Culture Inventory
Focuses on behaviors that help employees fit into
the organization and meet coworker expectations
340
Kilmann-Saxton Culture-Gap Survey
Focuses on what actually happens in the
organization and the expectations of others
341
Interventions for Changing
Organizational Culture
342
Organizational culture
• Organizational Culture
– a system of shared values and beliefs that guides the behavior of
members
• Strong Cultures
– Are clear, well defined and widely shared among members
• Emphasize teamwork.
• Allow and support risk taking.
• Encourage innovation.
• Make well-being of people a top management priority.
• Strong cultures are clear, well defined, and widely shared
among members.
344
Organizational Culture …
• Core Culture
– Beliefs and values shared by an organization
• Value-based Management
– communicates, models, and reinforces core values throughout the
organization.
• Observable Culture
– What you see and hear as you are walking around in an organization
346
MANAGEMENT TIPS
• S C O R E S—How to read an organization’s culture
347
Activity 1
• Can the organizational culture change?
– How?
• Where does the culture come from?
1.
2.
3.
• Does the culture look the same from the top
and from the bottom?
348
Activity 2
1. Consider an organization of which you are a member
or an associate. What is the structure in this
organization? Is it centralized or decentralized? Is it
organic and flexible? How would you change the
structure in this organization to make it more effective?
2. How would you describe the culture in the organization
discussed in question #1? How does the culture affect
members’ behavior in the organization?
3. When you become a manager, what type of culture will
you establish in your unit? What values do you want to
emphasize? Why?
349
7.4 Change management
350
Change management
The process, tools and techniques to manage
the people side of change to achieve the
required business results.
351
Organizational Change Management
353
Organizational Change Management
354
Organizational Change Management
• Denial
• Resistance
• Exploration
• Renewal
355
Organizational Change Management
356
Organizational Change
Management
357
Organizational Change Management
358
Organizational Change Management
• Factors in Organizational Change
359
Organizational Change Management
360
Organizational Change Management
• Factors in Organizational Change
361
Activity
362
Common Reasons for Resistance
• Self-interest
• Fear of the Unknown
• Conscientious Objection or Differing
Perceptions
• Suspicion
• Conservatism
363
Change = Motivation X Vision X
Next Steps
• Motivation – Some Good Reason to Give up
the Status Quo
• Vision – A Clear and Practical Vision of the
Desired Future State
• Next Steps – an Understanding of the Next
Steps Required to Progress Toward the Vision
• If One Is Missing, Little Change Will Take Place
364
Organizational Change Management
• Resistance to Change
365
Organizational Change Management
• Resistance to Change
366
Organizational Change Management
• Resistance to Change
367
Organizational Change Management
• Resistance to Change
368
Organizational Change Management
369
Organizational Change Management
370
Organizational Change Management
371
Primary reasons for change Management
372
Organizational change can be
represented as three states of change
373
The organization’s future state is actually
the collection of many individual future
states
Current Transition Future
Organization
Current Transition Future
Future
Current Transition Future
374
Consequences of not managing the
people side of change
• Lower productivity
• Passive resistance
• Active resistance
• Turnover of valued employees
375
Consequences of not managing the
people side of change…
376
Consequences of not managing the
people side of change…
377
There are consequences of not managing the
people side of change
• Lower productivity
• Passive resistance
• Active resistance
• Turnover of valued employees
• Disinterest in the current or future state
• Arguing about the need for change
• More people taking sick days or not showing up
• Changes not fully implemented
• People finding work-arounds
• People revert to the old way of doing things
• The change being totally scrapped
• Divides are created between ‘us’ and ‘them’
378
Change
“Organizations don’t change - people within
organizations change.”
379
The five building blocks of
successful change
Awareness of the need for change
Desire to participate and support the
change
Knowledge on how to change
Ability to implement required skills and
behaviors
Reinforcement to sustain the change
380
The ADKAR Model
Awareness of the need for change.
• What is the nature of the
change?
• Why is the change happening?
• What is the risk of not
changing?
381
The ADKAR Model
Desire to support the change.
• Personal motivation to
support the change
• Organizational drivers
to support change
382
The ADKAR Model
Desire Think about the change your
team is working on currently .
383
The ADKAR Model
Knowledge on how to change.
• Knowledge, skills and
behaviors required during
and after the change
• Understanding how to
change
384
The ADKAR Model
Knowledge Think about the change your team
is working on currently .
385
The ADKAR Model
Ability to implement new skills.
• Demonstrated ability to
implement the change
• Barriers that may inhibit
implementing the change
386
The ADKAR Model
Ability Think about the change your team is
working on currently .
387
The ADKAR Model
Reinforcement to sustain the change.
• Mechanisms to keep the
change in place
• Recognition, rewards,
incentives, successes
388
The ADKAR Model
Reinforcement Think about the change your team
is working on currently .
389
Connecting ADKAR and the current,
transition and future states.
A D K A R
390
ADKAR Gap Model
Change
Confusion
Resistance
Fear/
Anxiety
Frustration
Backsliding
391
Developing corrective actions
with ADKAR
If the gap is: Corrective actions:
392
Developing corrective actions
with ADKAR
If the gap is: Corrective actions:
Knowledge Training on how to change and the skills
needed after the change
393
Applying ADKAR:
Not everyone moves through change
at the same pace
Change with A A
one person… Or five people… D
A Or twenty people… D
A
D
A
D
A
A KA
D A D
K D A A K AA K
A AA K A
K
D D
A A
D R A DD A A
K A
A DK D A D
A D AA K K A R KK A R D
D DR A A D AK K R K
DR K DR A A D AAA D K
K DR K RA A A
K K K R K DRR K A
A A K A RK R R
A A A
A R
R A R
A R
R
R
R R
A
R
R
R A
D
A A
A A A
A
A A
A A A D D A D A
A A A A A A A A A K A D A D D
D D D A A A A D AA KA
D D
A
D D
A
D D
A D A D D A A A DKAAA AK A KAAD D
DAA A
K A K
D
A K A K A K
D D D DAA DD ADA ADA A K AAA KDD AA AA A
A A AK AA K D A A AK AA K A D KA A AD KA
D AD KA K R A DD D
A D D A A K AA
K K D D A DD A A A A
D A D AD D A
K AA D
A A K A K A A AA K A KAKA KK DR A KA DKR DK A D AA ADDA AKKK A DA R K DD DDD AA DD A
DD D AA D A A K AD AA D A A D AA D A A DK A A A D A D A A
AA AA AA A K D R
A KK AD D A KK A D K K
K RK D A K DR D K A DDR K D
A A D K D AKA DD D R AA DD AKA A DKD DDD A AD D AK A K AAKA AD KR AK D
AR KKKD DAAD AA D
RAAAD
AAA R K KAA A
K R
KKK DAR KK D
A A K KAA DR KK A D R AA DK A K D KA DR K A ARDKR D A D RAAAA ADADA AKD A AAAKDD
A DD
A
AAA
K AA
D A K K A ARAK A A D KKA AAR K A RAD KK A K DR KAA DA R K DRDDRK A D RA
K D RDADAK A A
D
AAA
A K D KAAAKDD DR
KRR A D AAAADD D A A
A K A A KD AAA K
Or 1000 people…
A R
K AD AAA D K AD AAD R
K AAA D KDA AA D K A R K K A D KA K
K A K RK D R D KD
D KKR A D D A D
RA D RA A KAAAKDD R
DDRDR A
D R A ADD A K AAA D R A AD A R A D R K AAD AR A AAA DA A K DAAA R DKA AAD KR A K D RA KADRRAKK A DRRA R
KA
KKK A D RKKA D
DR KDAR A A R A ADK D D K A D A D D K A D A DKR
D A
K A ADD
A R AAAAK AKKAA K R
A KA AKARKDKR
A R
KR K DR AAAK D KA
K K KK RD
A A RRDRK AK DR AA D
R R R R A D K D
A D K K A D K A R K A RD
K R K DR K A AKA R AR K D DKRA KK A RK D KDAR K D D
R K R
A R A D R D K AR
A AAA RDA
R
AA A AAAKR
A D A
K
A
K D
R A RK R ARA AA
A
A A K R D RA A D K
AAAAAK
K AA K
K AKDR D A R DK AA K K AA RA A KRAA K A K AAR R AK RA KAK R RA DRAKKAK RDRR K ADRD K A A AD RAR A D
A RDD AKDARA AKKA DR AA
AA R
RR D A KA RA K R
AA A KA A A A D AKA AA D A AK
A A
A K D A K AK A K K
D
AR D K RD AA AR A A AKRR R DDR K A A R A
D RA A
A D
A A ARA DAD
KD AA DAKAR DA
D AA A RAK
D D
D
AAA D A K D
RA AADRA D ARA AK
ADA AA K D R K DAA RA A A
A
AD
K ARDA
A
RR K A
K RADR RK R RD
D K K
R DRR AK DKARA AKRRR RADRRDA K R A D RD A A
K A
R D AK A R D
R AA ARK D AR RD
R K D RA D
R A R
A A
K
D AKDAAAA D R R
K D K K D R A D D K
DK A R R D R K
D RD A K DD AAKDAR KD A AD K DA
KRAAADK AAD A
DARAADA R DDRAADA R KAA R K AK RA R
AAA K
R
K AD A A A K KRAK A A R
K R A DARAKARKDAK A A AKA A
D RA K
K RA
DRAKD
DDA A
RDKKAR
KDA AD RA
A
D DK A
KDAKR KRAKD R
DKA
KRAA A KRR DK ADARAAARD R
A
A DK AAAA
RA
AA RAK A KRARAR D AA DRA AAKRAK AR D
AA DARA KKD D A K KRA A K AK AKD RAD A K AD R RDADK D AAAAKKR DK AKKD
R AA K DD
R
DRAK
R A A RKDAA ARDK A
R
K
AR
K RA
A A KD KD A
ARA AKD AAKR A
A D DAR D A K
D D A A
A AADARD
K A A
A
A DDR DA AK A A AK D
AKDAAA DAK D KR KKA A A DD R A
D A
KA DKD RAKR K RR D A A R D
A AKA DDRD R ARAKDDD ADAR AA DD A K
KA A
RR D D ARA DA
D D AA K
AA DD KD AAA
K KRD AA KKR D
K D K AA RDAADAK D
K R A A DK A A
A D K DD A
A AAKA AD A D A KK DA R
A
R
R
R A R A R A R A R A
A DK K AA KD R R
K A ADDAR KAK K R R K AKA D A AR D K A A D
D R K AKD D A RAR K
A K
DD DR A KK KD RD R KDRDKK K AR DDRDK
AKRA DRA A
D A K
ARADAR DKARA A A DADAR K A D ARAKKKA DA D
KRAD R KKK A
D R K A DR R KD
A D KKA A K A R D K
D KK R
K ARA RA KKD
A DRR
AKA
KRKAK
DR R
K
AA KA RK
AA K A K
A RDR KRA
K K
DKRA K
A A A KR KDRRKA KAA
R R A
DAD KARAA A
AD KK DKR K
A
D
KR
R A AAADKR R K K A A AR
A
R R
AR AA
D R A AA DRA D A A A RA A A A A D K AAA K D K A K A A D K A K
K AAA K D A A
K RR
K AAR A D K
AAA AA D AKA A D KARAA K AK D KRKDDR AR R
KA K
AA KAD DAKRA DK
RAAKA D
D KDKR A A D A
A DRRRK
R D R RAD DA DKR AA D
A DR
K AAD R A
A D
A DR R AAK R
R AA A K RRD RA R D A ARRD R K R AADAR K AARARD R KK DDRA RK
D RR KA R
A
K AKA DRR RK A AK A D R K A D K A A
K A
A A KD R
DRR R A DR R KR
A RDR R K RAD RK AR DRR K A KR KA A R DRR A K KRA A
R R R K K DRRRK R KA RR K AR RRK DRR K A R
R K RA K
RR R A R R K R R K D
RRKRA R KK A AR K D RA K K AR K A R K K RA R K R K A RK R
R K A AA R R A R
R K A RK R K A RK R K A R KA A R R AA K AA
R R RK R A RA R A A A A
A A
A R A A A
A
R RA R R A RA A A RAR A AR RA R
A RA A R A RA A A A R
RR A RAR A R R R RR R R R R
R R
A R
R R R R R R
R R RR R R R R R
R R R R R R R
R R R R
394
Examples of changes organizations are
currently taking on
No web interface for suppliers Supplier website integrated into supply chain
395
In reality, there are both organizational and
individual future states
396
The organization’s future state is actually the
collection of many individual future states
Individuals
397
Change management perspectives
• Individual • Organizational
perspective perspective
398
The focus of change management is helping
individuals make their transition
Individuals
Current Transition Future
state state state
Change management drives project
success by supporting individual Current
state
Transition
state
Future
state
transitions required by organizational
projects and initiatives Current
state
Transition
state
Future
state
399
Managing individual change with ADKAR ®
successful change
– Personal or professional
Awareness
Desire
• Success with change Knowledge
requires all elements of the Ability
ADKAR Model to be ®
Reinforcement ®
Reference: Hiatt, J. ADKAR: A model for change in business, government and our community, Learning Center Publications, 2006.
ADKAR is a registered trademark of Prosci. All Rights Reserved.
ADKAR and “Awareness Desire Knowledge Ability Reinforcement” are a registered trademarks of Prosci, Inc. All rights reserved.
400
Phase 1 – Preparing for change
• Understanding the
nature of the change
• Understanding the
groups being changed
• Creating the right
sponsorship model and
coalition
• Identifying risks
• Developing special
tactics
401
Phase 2 – Managing change
• Communication plan
• Sponsor roadmap
• Training plan
• Coaching plan
• Resistance mgmt plan
402
Phase 3 – Reinforcing change
403
Connecting individual and organizational
change management
Change Individual phases
management of change
tools (ADKAR®)
Communications Awareness
Coaching Knowledge
Training Reinforcement™
404
Who is involved in managing change
405
Senior leaders
406
Managers & supervisors
407
Employees
408
Project team
409
Change management is like project
management
410
Change management and
project management
Technical side
Project management of the project
People side of
Change management
the project
411
Comparing processes
– Closing – Individual:
• Awareness
• Desire
• Process groups defined in the Project
Management Institute’s PMBOK® • Knowledge
• Ability
• Reinforcement®
412
Comparing tools
413
The right amount
• How much project • How much change
management is needed? management is needed?
414
Integrating change management and
project management activities
415
Problem or
opportunity
Planning
Business
improvement Design
steps
Development
Implementation
416
Assessments
Team and
sponsors
Change
Communications management
process
Coaching and
feedback
Resistance
management
417
Business
improvement
steps
Change
management
process
418
Business
improvement
steps
Change
management
process
419
Best Practice - Change
Management
420
# 1: Develop a Compelling Vision
421
# 2: Change Is a Journey, Not a
Blueprint
• Develop Detailed, Multi-dimensional Plans
– Change Description
– Business Objectives
– Human Objectives
– Key Role Map
– Vision
– Detailed Activities, Resources, Timelines
– Measurements
• Recognize That This Is a Journey
– Will Need to Adapt Plan As Needs Change
422
Warning: Need to Balance “Preparing For”
and “Implementing”
426
# 6: Analyze Their Readiness for Change
• Assess the Organization on Their Readiness for This Particular
Change
– Surveys
– One-on-One Discussions
• Understand Where People Are
– Early Adopters
– Late Adopters
– Laggards
• Are There Outside Organizations That Are Influencers?
• Understand Their Frames of Reference and Develop
Communication Strategies
427
# 7: Start Where People Are Most
Receptive
• Avoid the Dedicated Resistors, Focus on Early
Adopters (About 20% of the Population)
• Helps to Get Some Early Wins
428
# 9: People Don’t Resist Their Own Ideas
429
# 10: Manage the Driving Forces As Well As
the Restraining Forces
What Forces Affect Your Change Project?
430
# 11: Establish a Darn Good
Reason to Change
431
# 12: Say It Once, Say It Twice, and Say It Again
434
# 15: Show Results – Early and Often
• Plan for Goals (Long and Near Term) That Are
Measurable, Tangible and Clear
– Explicitly Tied to Vision
• Not a Count of Activities
– # Of People Trained in CMMI
– # Of Procedures Written
• Performance Results That Matter to Customers,
Employees or Shareholders
– Reduction in Delivered Defects
– Reduction in Cycle Time
– Reduced Escaped Defects Resulting in Reduced Rework
435
# 16: Prepare for “Implementation Dip”
436
# 17: Validate the Feelings of People
437
# 18: Deal With the Four “F’s of Loss and Change”
• Resistance Is
– Inevitable
– A Natural Function of Change
– Manageable
• Resistance Is Not
– Necessarily Logical
– A Sign of Disloyalty
– To Be Taken Personally
– A Sign That the Change Project Is Out of Control
439
# 20: Facilitate, Rather Than Just Train
441
# 22: Recognize Every Person Is a
Change Agent
• Educate Leaders of the Change As Well As the
Targets of Their Roles in the Change
– To Be Open to Change
– To Anticipate Change, Not Just React to It
– To Accept That Change Causes Stress and to
Developing Coping Mechanisms
442
# 23: Change Agents Must Be Able
to Work With Polar Opposites
• Summary
444
Organizational Change Management
• Summary
445
Conclusion
• Change management focuses on the ‘people side’ of
organizational change
• Change management involves both an individual and an
organizational perspective
• Change management requires action and involvement by
leaders and managers throughout the organization
• Change management and project management are both tools
that support project benefit realization – project management
is the ‘technical’ side and change management is the ‘people’
side
• Change management is most effective when it is launched at
the beginning of a project and integrated into the project
activities
446
Organizational Politics
• Organizational politics are informal, unofficial,
and sometimes behind-the-scenes efforts to sell
ideas, influence an organization, increase power,
or achieve other targeted objectives. Politics has
been around for millennia. Aristotle wrote that
politics stems from a diversity of interests, and
those competing interests must be resolved in
some way. “Rational” decision making alone may
not work when interests are fundamentally
incongruent, so political behaviors and influence
tactics arise. 447
Organizational Politics…
• Politics are a part of organizational life,
because organizations are made up of
different interests that need to be aligned.
448
Individual and organizational antecedents can both
lead to political behavior.
449
The Organizational Life Cycle
– Startup (or Birth)
– Growth Phase. This is sometimes divided into an early growth
phase (fast growth) and maturity phase (slow growth or no
growth). However, maturity often leads to
– Organizational Decline. When in decline, an organization will
either undergo:
– The Renewal Phase. Sometimes great leaders can change the
course of the ship.
– Death
• Each of these phases present different management and
leadership challenges that one must deal with.
450
Reasons For Decline
Inexperienced Management 9%
451
Organizational Renewal
• A a rigorous program to change and
transform the organization’s culture assumes,
though, that one has enough
transformational leaders to change the status
quo. Without the right type of leadership, the
organization will likely spiral down to
bankruptcy.
452
• There are many causes to an organization
prospering or declining. Organizational decline
is not inevitable. The good news is most of
those factors are within the control of the
organizations senior executives.
453