SYSTEMS AND CONTINGENCY APPROACH
TO ORG THEORY & PRACTICE
AND
TECHNIQUES OF ORGANISATIONAL
DIAGNOSIS
Facilitator and Course Coordinator:
Vinayshil Gautam PhD, FRAS(London)
(Founder Director IIM K; Leader Consulting Team IIM S)
A Al_Sager Chair Professor and First Head,
Management Department, IIT D
Chairman, DKIF
1
Theories and their
importance
• A theory is a set of assumptions or
principles that have been repeatedly
tested to explain or predict facts or
phenomena
• Theories:
–
–
–
–
–
Provide a conceptual framework
Provide a common vocabulary
Guides action
Assists comprehension or judgment
Challenge practice wisdom
2
Systems Theory
• Ludwig Von Bertalanffy, has long been
regarded as the Founder of Systems
Theory
• He argued that all systems, whether
organic or organisational, shared similar
characteristics & could be analysed in
similar terms
3
Systems Theory
Views the organization as a
system of interrelated parts that
function in a holistic way to
achieve a common purpose.
McGraw-Hill
4
Systems concept: Environment
• Organisations are ‘open’ to their
environments
5
Systems Concepts: Adaptation
• To survive the organisations must adapt to
its
environment
• All non-random functioning systems have:
Inputs 
Processes 
Output 
 Feedback loop with criteria 
• An organisation that does not produce what is
reqd by its environment must either change or
disappear
6
Systems Concepts: Boundaries
• Boundaries are the interface between a
system and its subsystems or a system
and its environment.
• By examining the boundaries of a
system, we can often isolate the friction
and its causes.
7
Systems Concepts: Goal Seeking
• Organisations & Organisational
subsystems tend to be goal seeking,
that is, they move in the direction of
goal achievement.
• The primary goal of a system is
survival.
8
Systems Concepts: Cybernetics
• For a system to work properly, it must have
feedback and control mechanisms
• Feedback and control mechanisms
– Accept information about system outputs
– Evaluate information using goal related criteria
– Use evaluative information as additional i/p
9
Systems Concepts: Differentiation
• Organisations are complex systems
• Different subsystems become specialised
through catering for different aspects of
organisation
• Various depts of any business org e.g.,
prodn, marketing, finance etc, are all
geared to a very different environment
10
Systems Concepts: Synergy
• Systems working well experience
synergy where the total system output
are greater than the sum of all inputs.
• For synergy to occur, subsystems must
not optimize, but cooperate for the good
of the overall system, e.g., Teamwork.
• Synergy is also called nonsummativity
11
Contingency Theory
Or
It all depends on the situation
12
Contingency Theory
• States that there is no “one best way” to manage
an organization.
Because what works for one organization may
not work for another
Situational characteristics (contingencies) differ
Managers need to understand the key
contingencies that determine the most effective
mgt practices in a given situation
13
Technology
• Lots of research since 1950 has taken
place to identify the effects of technology
upon organisations
• Research by Woodward & Tavistock
Institute indicated that Technology
influenced :
14
–Degree of Job dissatisfaction
–Behaviour of Work groups
–Pattern of Industrial relations
–Structure of Organisations
15
Technology & Degree Of
Job Dissatisfaction
• Different technologies have different
effect upon nature of work & degree of
job dissatisfaction
• Blauner distinguished between four
different technologies :
16
–Craft technology (printing)
–Machine-minding technology
(textile)
–Mass prodn technology
–Process technology (chemical)
17
Levels of Alienation suffered by
people due to different technologies
18
Technology & Behaviour
Of Work Groups
• Sayles suggested that technology
determines not only the formation of work
groups but also their behaviour
• Factors determining the formation of work
groups :
- Worker skill level reqd by technology
– Degree of interactions between workers
permitted by technology
19
20
Technology & Industrial
Relations
21
Technology & Organisational
Structure
• J Woodward carried out one of the most
influential studies to ‘discover whether
principles of organisations laid down by an
expanding body of Mgt theory correlates
with business success when put into
practice’
22
• Methodology :
About hundred firms were taken as a sample
They were divided into 3 general categories
based on their method of production :
-
Simple units & small batch prodn methods
-
Large batch & mass prodn methods
-
Complex process prodn methods
All these firms were placed along what she
called continuum of technological complexity
23
• Main Findings :
Firms with similar methods of prodn were
organised in a similar way
Firms at either end of continuum had similar
characteristics
There was a relationship between technology,
organisational structure & economic success
There was a relationship between technology
and the pattern of industrial relations
24
25
Socio-Technical Systems
• Socio-technical theory evolved from the field work
of researchers from Tavistock Institute of Human
Relations
• Principle finding was that there are social
implications for every implementation of change
• Measures suggested :
- Set up a structure for intergroup
communications to solve any problems groups
might experience
26
- Develop company code to govern relations
between people at different levels
- Counseling of workers in groups to
express feelings constructively
In Tavistock view, a healthy organisation
is one which is capable of tackling in a
realistic manner whatever technical,
economic, or social problems it might
encounter
27
SOCIOTECHNICAL SYSTEMS
• THEORY EVOLVED FROM THE FDWORK OF
RESEARCHERS OF TAVISTOCK INSTITUTE OF
HUMAN RELATIONS
• DEVELOPING OF METHODS FOR SYSTEMATIC
OBSERVATION OF HUMAN BEHAVIOUR IN
ORGANISATIONS SO AS TO SOLVE SOCIAL
PROBLEMS.
28
• PROBLEM
?
SERVICE DEPARTMENT - PIECEWISE PAY VIS A VIS
FIXED PAY.
• NO CONCERN FOR THE WORKERS INTEREST.
• MANAGERS AND WORKERS SHOWED LACK
OFTRUST
FOR EACH OTHER.
• RESEARCHERS SUGESSTIONS
• MGMT WORKER INTERRELATIONSHIP.
• MORALE BUILDING.
29
TAVISTOCK RESEARCH
• THE BASIC PRINCIPLE WAS – THERE ARE SOCIAL
IMPLICATIONS FOREVERY IMPLEMENTATION OF CHANGE.
•
SETUP STRUCTURE FOR INTERGROUP COMMUNICATION TO
DEAL WITH THE PROBLEMS
•
DEVELOPMENT OF A COMPANY CODE GOVERNING THE
RELATION BETWEEN PEOPLE AT DIFFERENT LEVELS.
•
MANAGERS SHOULD BE MORE RESPONSIVE TO
ORGANISATIONAL PROBLEMS.
•
BASIC PROBLEM IS MAINTAINING A STRUCTURE AND CULTURE
TO COPE WITH CHALLENGES OF A CHANGING SOCIETY.
•
HEALTHY ORGANISATION - ONE WHICH IS CAPABLE OF
TACKLING THE PROBLEMS IN A REALISTIC MANNER.
30
SOCIOTECNICAL SYSTEMS THEORY
• ORGANISATIONS ARE OPEN SYSTEMS.
• DEPEND ON THE ENVIRONMENT FOR RAW MATERIALS
AS INPUTS AND FOR MARKETS TO ABSORB THEIR
OUTPUTS OR PRODUCTS.
• CONSIST OF SEVERAL SUBSYSTEMSTO DEFINE THE
INTERNAL PROCESSES.
31
ORGANISATIONAL SYSTEM
ENVIRONMENTAL SYSTEM
GOALS &VALUES SUBSYSTEM
• CULTURE
• PHILOSPHY
• OVERALL GOALS
• INDIVIDUAL GOALS
PSYCHOSOCIAL
SUBSYSTEM
MANAGERIAL SUBSYSTEM
.
• GOAL SETTING
• PLANNING
• ASSEMBLING
• RESOURCE
• ORGANISING
• IMPLEMENTATION
• HR
• ATTITUDES
• MOTIVATION
• GP DYNAMICS
• LEADERSHIP
• INFLUENCE SYSTEMS
TECHNICAL
SUBSYSTEM
• TASK REQUIREMENT
• KNOWLEDGE
• TECHNIQUES
• LAYOUT OF
FACILITIES
• MACHY EQUIPMENT
• INFORMATION
STRUCTURAL SUBSYSTEM
• TASKS
• WORK FLOWS
• WORK GROUPS
• AUTHORITY
• INFORMATION FLOWS
• PROCEDURES & RULES
32
TECHNICAL SUBSYSTEM
• ORGANISATION REQUIRES STRUCTURING AND
INTEGRATING HUMAN ACTIVITIES AROUND
VARIOUS TECHNOLOGIES.
• EVERY MODERN ORGANISATION IS INFUENCED BY
THE RAPID ACCELERATION OF TECHNOLOGY IN
OUR SOCIETY.
33
•
AFFECTS THE TYPES OF INPUTS AND THE OUTPUTS
FROM THE SUBSYSTEM AND THUS THE TASK
ACCOMPLISHMENT.
• WAYS IN WHICH THE ORGANISATION ADAPTS TO
THE CHANGING TECHNOLOGY HAS A SIGNIFICANT
IMPACT ON THE OTHER ORG SUBSYSTEMS.
34
TECHNICAL SUBSYSTEM
DEFINITION
• MECHANISTIC VIEW - THE MECHANICAL
MEANS FOR PRODUCTION OF GOODS AND
SERVICES AND REPLACEMENT OF HUMAN EFFORT.
35
• TECHNOLOGY IS FAR MORE THAN THE MACHINE
AND REFERS TO STANDARISED MEANS FOR
ATTAINING A PREDETERMINED OBJECTIVE OR
RESULT. THUS CONVERTS SPONTANEOUS AND
UNREFLECTIVE BEHAVIOUR INTO BEHAVIOUR THAT
IS DELIBERATE AND RATIONALISED AND RESULTS
IN ABSOLUTE EFFICIENCY IN EVERY FIELD OF
HUMAN ACTIVITY.
----JACQUES ELLUL.
36
•DETERMINED BY THE
-
TASK REQUIREMENTS OF AN ORG.
KNOWLEDGE AND SKILLS
MACHINERY AND EQPT INVOLVED.
TECHNIQUES.
LAYOUT OF FACILITIES.
INFORMATION
38
TECHNICAL SUBSYSTEM
ACCELERATING TECHNOLOGY
• SCIENCE AND TECHNOLOGY PERVASIVE FORCES IN MODERN
SOCIETY.
• IMPACTED THE SOCIAL STRUCTURE AND CULTURE.
• AUTOMATION - REPLACED HUMAN DECISION MAKING IN THE
CONTROL PHASE.
• EFFECTIVE UTILISATION OF TECHNOLOGIES REQUIRE THE
DEVELOPMENT OF COMPLEX ORGANISATIONS.
39
DANGERS OF TECHNOLOGY
• WILL DRIVE OUT HUMANISTIC AND SOCIAL
CONSIDERATIONS.
• TOTAL INTEGRATION OF MAN INTO THE TECHNICAL
SYSTEM(SOCIOCULTURAL STRUCTURE).
•
CHANGES IN VAUES AND GOALS.
•
CHALLENGE TO PROFIT FROM ITS OPPORTUNITIES
ANDCONTAINING ITS DANGERS.
•
INTERACTION BETWEEN THE TECH AND
PSYCHOSOCIAL SYSTEM IS A DETERMINANT OF
THE RELATIONSHIP BETWEEN TECHNOLOGY AND
SOCIETY.
40
TECHNICAL SUBSYSTEM
CLASSIFICATION OF TECHNICAL SYSTEMS
• BASIS OF PRIMARY FN - SCHOOLS , HOSPITALS,UNIONS, ETC.
• TECHNICAL SYSTEM BASIS.
• INDUSTRIAL ORGANISATIONS – SMALL BATCH MASS
PRODUCTION AND CONTINUOUS PROCESS.
41
CLASSIFICATION BY THOMPSON
•
LONG LINKED TECHNOLOGY – INVOLVES SERIAL
INTERDEPENDENCE BETWEEN VARIOUS
PRODUCTION UNITS ,eg FULLY AUTOMATED ASSY
LINE.
• MEDIATING TECHNOLOGY - INVOLVES JOINING OF
CLIENTS &CUSTOMERS ,OTHERWISE
INDEPENDENT,eg BANKS, POST OFFICES.
• INTENSIVE TECHNOLOGY – DEAL WITH SPECIFIC
PROBLEMS,eg R&D, HOSPITALS.
• THE TWO PRIMARY DIMENSIONS HERE ARE –
COMPLEXITY AND DEGREE OF UNIFORMITY OR
NONUNIFORMITY.
42
TECHNICAL SUBSYSTEM
PROBLEMS
•
ADAPTING TO ONE TECHNOLOGICAL COMPONENT.
• INTEGRATING AND COORD A NO OF DIFFERENT
TECHNOLOGIES WITHIN THE ORG SYSTEM.
43
TECHNICAL SUBSYSTEM
IMPACT OF TECHNICAL SYSTEM
• TRADITIONALLY , TECHNOLOGICAL COMPONENT WAS
CONSIDERED AS A CLOSED SYSTEM – DID NOT HAVE
ANY DYNAMIC INTERACTION WITH OTHER SYSTEMS .
• LEAD TO UNREALISTIC AND IDEALISTIC
GENERALISATIONS..
• ACTUALLY TECHNOLOGY AND OTHER SYSTEMS ARE
INDEPENDENTLY RELATED.
44
• THREE
BASIC WAYS IN WHICH TECHNOLOGY INFLUENCES
BEHAVIOUR THROUGH ITS EFFECT ON OTHER INPUTS.
- HUMAN INPUTS REQUIRED BY AN ORG.
- GROSS FEATURES OF ORG STRUCTURE AND
PROCEDURES.
- DETERMINANT OF INDIVIDUAL AND GROUP JOB
DESIGNS/SOCIAL STRUCTURE AND NORMS.
45
TECHNICAL SUBSYSTEM
CLASSIFICATION OF TECHNICAL SYSTEMS
• BASIS OF PRIMARY FN - SCHOOLS ,
OSPITALS,UNIONS, ETC.
• TECHNICAL SYSTEM BASIS.
• INDUSTRIAL ORGANISATIONS – SMALL BATCH,
MASS.PRODUCTION AND CONTINUOUS PROCESS
46
CLASSIFICATION BY THOMPSON
• LONG LINKED TECHNOLOGY – INVOLVES SERIAL
INTERDEPENDENCE BETWEEN VARIOUS PRODUCTION
UNITS ,eg FULLY AUTOMATED ASSY LINE.
• MEDIATING TECHNOLOGY - INVOLVES JOINING OF
CLIENTS &CUSTOMERS ,OTHERWISE INDEPENDENT,eg
BANKS, POST OFFICES.
• INTENSIVE TECHNOLOGY – DEAL WITH SPECIFIC
PROBLEMS,eg R&D, HOSPITALS.
• THE TWO PRIMARY DIMENSIONS HERE ARE –
COMPLEXITY AND DEGREE OF UNIFORMITY OR
NONUNIFORMITY.
47
TECHNICAL SUBSYSTEM
IMPACT UPON STRUCTURE
• RESEARCH BY JOAN WOODWARD.
• DIRECT CORRELATION BETWEEN TECHNOLOGY
AND ORG STRUCTURE .
• ORG CHARACTERISTICS WHICH SHOW A DIRECT
RELATIONSHIP WITH TECH ADVANCE ARE :-
48
- LENGTH OF LINE OF COMMAND
– INCREASES IN VERTICAL LEVELS.
- SPAN OF CONTROL - INCREASED FROM 4 –10, BY
MANAGEMENT AND COMMITTEE.
- SALARIES AND WAGES.
- MANAGER /PERS RATIO INCREASED.
- STAFF-WORKER RATIO LARGER.
- SUPERVISION LEVEL HIGHER.
• SYSTEM OF PRODUCTION LEAD TO DIFFERENT
STRUCTURE.
• OPERATIONS TECHNIQUES HAD LIMITED IMPACT ON
THE COORDINATIVE SYSTEM.
• STRATEGIC LEVEL – ENVIRONMENTAL INFLUENCES ON
THE BROAD ADMINISTRATIVE STRUCTURE
49
TECHNICAL SUBSYSTEM
IMPACT ON PSYCHOSOCIAL SYSTEM
•
TRADITIONALLY , ASSUMPTION WAS ADAPTATION,
BUT IT AFFECTS THE
- NETWORK OF SOCIAL RELATIONS AMONG
WORKERS.
- SIZE AND COMPOSITION OF WORKGROUPS IN
RANGE, CHARACTER, FREQUENCY OF CONTACT
WITH FELLOW WORKERS AND SUPERVISORS.
.
50
- LEAD TO JOB INSECURITIES.
- STATUS POSITION OF THE WORKER
.
- PHYSICAL AND SOCIAL MOBILITY.
- OUTMODED JOBS.
- SELF IMAGE AND MOTIVATION
51
TECHNICAL SUBSYSTEM
IMPACT ON PSYCHOSOCIAL SYSTEM
•
INCREASED SPECIALISATION RESULTED IN
GREATER PREDICTABILITY OF WORK BEHAVIOUR
AND INCREASED DISCIPLINE IN THE WORKPLACE.
• ASSY LINE AFFECTS THE SOCIAL ORGANISATION IN
TERMS OF SIZE , FN AND INTERACTION OF
WORKGROUPS, INTERPERSONAL RELATIONSHIP,
RELATIONSHIP WITH THE SUPERVISORS, WAGE
STRUCTURE AND PROMOTIONAL ASPECTS.
52
• ALIENATION AND DISSATISFACTION IN ASSY,
LINE WORKERS AND MORE MOTIVATION
INTEGRATION AND SATISFACTION IN CRAFT
AND CONTINUOUS PROCESS.
• EMOTIONAL STRESS , LACK OF GP IDEN
WHICH LEAD TO LOSS OF PRODUCTIVITY.
53
TECHNICAL SUBSYSTEM
REMEDIAL MEASURES
•
INCREASED PRODUCTION.
• PERSONAL SATISFACTION.
• QUALITY AND EFFICIENCY.
• MAINT HIGH LEVEL OF GROUP MORALE.
• BETTER COORDINATION.
• JOB ENRICHMENT.
LEAD TO INCREASED ORGANISATIONAL
EFFECTIVENESS AND EFFICIENCY
54
TECHNICAL SUBSYSTEM
IMPACT ON MANAGERIAL SYSTEM
• SPECIALISED SKILLS AND TRAINING
• IMPACT ON STAFF AND FUNCTIONAL PERSONNEL,
MIDDLE AND LOWER LEVEL MANAGERS.
55
• ROLE OFFIRST LINE MANAGER REQUIRED TO
INTEGRATE ACTIVITIES ACROSS A BROADER
SPECTRUM
• SUPERVISORY REQUIREMENTS BOTH IN
TERMS OF TECHNICAL AND HUMAN
RELATIONS HAVE INCREASED.
• TRADITIONAL SYSTEM PRIMARY
CONSIDERATION WAS
GIVEN TO THE DIFFERENTIATION OR
SEGMENTATION OF ACTIVITIES INTO
SUBSYSTEMS FOR TASK PERFORMANCE.
56
TECHNICAL SUBSYSTEM
IMPACT ON MANAGERIAL SYSTEM
• IN TRADITIONAL SYSTEMS PRIMARY CONSIDERATION
WAS GIVEN TO DIFFERENTIATION OF ACTIVITIES INTO
SUBSYSTEMS.
•
IN COMPLEX ORGANISATIONS INCREASED
DIFFERENTIATION RESULTED IN INTEGRATION
PROBLEMS IN THE VARIOUS SUBSYSTEMS.
57
•BURNS AND STALKER
•
MECHANISTIC ADAPTED TO STABLE SYSTEM
- RIGID ORG STRUCTURE RESEMBLANCE TO
BUREACRACY
-
WELL DEFINED TASKS,AND THE METHODS , DUTIES
AND POWERS OF EACH FUNCTIONAL ROLE WERE
DETERMINED PRECISELY.
-
COORDINATIONS &INTERACTIONS WERE VERTICAL –
COMMAND HIERARCHY.
58
TECHNICAL SUBSYSTEM
ORGANIC SYSTEMS
•
ADAPTED TO RAPIDLY CHANGING TECHNOLOGY AND
ENVIRONMENT .
• SUITABLE TO UNSTABLE CONDITIONS.
• FLEXIBLE STRUCTURE.
• CONTINUOUS ADJUSTMENT AND REDIFINING OF
INDIVIDUAL TASKS THROUGH INTERACTION – A
NETWORK.
59
• LATERAL COMMUNICATION ,WIDE DISPERSAL
OF POWER BASED ON TECHNICAL EXPERTISE
AND KNOWLEDGE.
• AUTHORITY AND SUPERIORNOWLEDGE DO NO
NECESSARILY COINCIDE
• THE PROBLEM - INSECURITY ON THE PART OF
MANAGERS.
• INNOVATIVE JUDGEMENTAL DECISION MAKING
WHERE STRESS IS ON PROBLEM SOLVING.
BUREACRATIC JUNGLE
60
ORGANISATIONAL SYSTEM
ENVIRONMENTAL SYSTEM
GOALS &VALUES
SUBSYSTEM
TECHNICAL
SUBSYSTEM
• CULTURE
• TASK REQUIREMENT
• KNOWLEDGE
• PHILOSPHY
• TECHNIQUES
• OVERALL GOALS
MANAGERIAL SUBSYSTEM
• LAYOUT OF
• INDIVIDUAL GOALS
FACILITIES
.
• GOAL SETTING
• MACHY EQUIPMENT
• PLANNING
• INFORMATION
• ASSEMBLING
• RESOURCE
PSYCHOSOCIAL • ORGANISING
SUBSYSTEM
• IMPLEMENTATION
STRUCTURAL SUBSYSTEM
• TASKS
• HR
• ATTITUDES
• MOTIVATION
• GP DYNAMICS
• LEADERSHIP
• INFLUENCE SYSTEMS
•
•
•
•
•
WORK FLOWS
WORK GROUPS
AUTHORITY &1`ORG CHARTS
INFORMATION FLOWS
PROCEDURES & RULES
61
STRUCTURAL SUBSYSTEM
• ESTABLISHED PATTERN OF RELATIONSHIPS AMONG
THE COMPONENTS OR PARTS OF AN ORGANISATION
THAT ARE RELATIVELY STABLE AND THAT CHANGE
SLOWLY .
• INFERRED FROM THE ACTUAL OPERATIONS AND
BEHAVIOUR OF THE ORGANISATION .
• ARRANGEMENT OF ITS SUBSYSTEMS AND
COMPONENTS IN THREE DIMENSIONAL SPACE AT A
GIVEN MOMENT OF TIME.
62
•
STRUCTURE AND ITS FUNCTIONS ARE
SEPARATE PHENOMENA BUT CANNOT BE
LOOKED AT AS COMPLETELY SEPERATED.
• INITIALLY SET FORTH BY THE DESIGN OF THE
MAJOR COMPONENTS OR SUBSYSTEMS AND
THEN BY THE EST OF PATTERNS OF
RELATIONSHIP AMONG THESE SUBSYSTEMS.
• INTERNAL DIFFERENTATION AND PATTERN OF
RELATIONSHIPS WITH SOME DEGREE OF
PERMANENCY REFERRED TO AS
STRUCTURE.
63
STRUCTURAL SUBSYSTEM
•
FORMAL AND INFORMAL STRUCTURES.
• FORMAL – SLOW IN RESPONDING TO EXTERNAL
CHANGES SUCH AS TECHNOLOGY CHANGES THUS
INFORMAL RELATIONSHIPS DEVELOP
• INFORMAL – ADAPTIVE AND SERVE TO PERFORM
INNOVATIVE FUNCTIONS.
64
• TRADITIONALLY CONCENTRARATION WAS ON
THE FORMAL ORG STRUCTURE AND
INFORMAL RALATIONS WERE OF CONCERN
• BOTH ARE INTERMESHED .
• DIFFICULT TO UNDERSTAND THE NATURE OF
FORMAL ORG WITHOUT INVESTIGATING THE
NETWORKS OF INFORMAL RELATIONS AND
THE UNOFFICIAL NORMS AS WELL AS THE
FORMAL HIERARCHY OF AUTHORITY AND THE
OFFICIAL BODY OF RULES..
• CLEAVAGE BETWEEN THE TWO IS ARTIFICIAL.
• TWO BASIC MODELS MATRIX.
BUREACRATIC AND
65
STRUCTURAL SUBSYSTEM
IMPACT OF SOCIOCULTURAL ENVIRONMENT
•
RESEARCH BY STINCHCOMBE
• STRUCTURE AT THE STRATEGIC LEVEL HAS A GREAT
IMPACT OF THE FORCES IN THE TASK
ENVIRONMENT.
• MNC’S STRONGLY INFLUENCED BY THE DIFFERING
CULTURES IN WHICH IT OPERATES AND HAS TO
ADAPT ITS GOALS STRUCTURE AND MANAGERIAL
APPROACH TO THE DIFFERENT CULTURE.
66
STRUCTURAL SUBSYSTEM
IMPACT OF SOCIOCULTURAL ENVIRONMENT
• RESEARCH BY CHANDLER
• CHANGING POPULATION ,INCOME ,TECHNOLOGY,
AND OTHER FORCES IN THE ENVIRONMENT LED
TO EXPANSIO OF THESE FIRMS INTO NEW FIELDS.
• STRATEGY OF DIVERSIFICATION AND EXPANSION
LED TO MAJOR MODIFICATIONS IN STRUCTURE
67
•
LED TO ADOPTION OF A MULTIDIVISIONAL
STRUCTURE.
- CENTRAL CORPORATE OFFICE PLANS AND
COORDINATES THE ACTIVITIES OF A NUMBER
OF OPERATING DIVISIONS AND ALLOCATES
PERS ,FACILITIES ,FUNDS AND OTHER
RESOURCES.
-
OPERATIONS ARE DECENTRALISED TO THE
OPERATING DIVISIONS WHICH HAVE A
SUBSTANTIAL DEGREE OF AUTONOMY.
68
STRUCTURAL SUBSYSTEM
IMPACT OF SOCIOCULTURAL ENVIRONMENT
• STRUCTURE OF CONGLOMERATES
- SMALL CORPORATE HQs.
- DO NOT EXERCISE STRICT CONTROLOR
COORDINATE ACTIVITIES OF THE OPERATING
UNITS
69
- SUBUNITS ARE SELF CONTAINED AND
AUTONOMOUS
- INTEGRATION ACHIEVED THROUGH
CORPORATE –DIVISIONAL INTERACTIONS WITH
MINIMUM DIVISION TO DIVISION
INTEGRATION.
- THE BASIC STRATEGY IS TO INTEGRATE AT
THE STRATEGIC LEVEL.
• IMPACT OF TECHNOLOGY ,SIZE AND
COMPLEXITY OF ORGANISATIONS.
70
ORGANISATIONAL SYSTEM
GOALS &VALUES
SUBSYSTEM
ENVIRONMENTAL SYSTEM
• CULTURE
• PHILOSPHY
• OVERALL GOALS
MANAGERIAL SUBSYSTEM
• INDIVIDUAL GOALS
PSYCHOSOCIAL
SUBSYSTEM
• HR
• ATTITUDES
• MOTIVATION
• GP DYNAMICS
• LEADERSHIP
• INFLUENCE SYSTEMS
.
• GOAL SETTING
• PLANNING
• ASSEMBLING
• RESOURCE
• ORGANISING
• IMPLEMENTATION
TECHNICAL
SUBSYSTEM
• TASK REQUIREMENT
• KNOWLEDGE
• TECHNIQUES
• LAYOUT OF
FACILITIES
• MACHY EQUIPMENT
• INFORMATION
STRUCTURAL
SUBSYSTEM
• TASKS
• WORK FLOWS
• WORK GROUPS
• AUTHORITY &1`ORG
CHARTS
• INFORMATION FLOWS
• PROCEDURES & RULES
71
PSYCHOSOCIAL SUBSYSTEM
• INDIVIDUAL AND THEIR RELATIONSHIPS ARE THE
PRIMARY ELEMENTS OF THIS SUBSYSTEM.
• PSYCHOSOCIAL SYSTEMS CAN BE UNDERSTOOD
INTERMS OF MOTIVATION AND BAHAVIOUR
OCCURRING IN AN ENVIRONMENT WHICH
INCLUDES
72
STATUS & ROLE SYSTEMS
- SERVE TO STRUCTURE SOCIAL RELATIONSHIPS AND
PROVIDE A FRAMEWORK WHERE GP ENDEAVOR CAN
BE COORD TOWARDS OBJECTIVESS.
- ROLE SYSTEMS ARE INTEGRALLY RELATED WITH
STATUS SYSTEM.
- STATUS CONCERNS THE RELATIVE PRESTIGE OF A
POSITION IN A STRUCTURAL RELATIONSHIP WITHIN
ORGANISATIONS.
- ROLE RELATES TO THE BEHAVIORAL PATTERNS IDENT
FOR A GIVEN POSN.
73
PSYCHOSOCIAL SUBSYSTEM
GROUP DYNAMICS
• SMALL GPS PROVIDE A MEDIATING MECHANISM
BETWEEN INDLS AND ORGS.
• ACTIVITIES, INTER ACTION AND SENTIMENTS PLAY AN
IMP PART IN ORG BEHAVIOUR.
• INDLS HIGH LEVEL NEEDS (SOCIAL ESTEEM AND SELF
ACTUALISATION) ARE SATISFIEDVIA HIS POSITION IN A
SMALL GP OR A LARGE ORG.
• COMMUNICATION IS THE BASIS OF GROUP DYNAMICS.
74
PSYCHOSOCIAL SUBSYSTEM
INFLUENCE SYSTEMS
• INCLUDES VIRTUALLY ANY INTERPERSONAL
TRANSACTION WHICH HAS PSYCHOLOGICAL OR
BEHAVIORAL EFFECTS.
• EXERTED IN MANY DIRECTIONS - UP AND DOWN THE
HIERARCHY AND LATERALLY IN PEER GROUP
RELATIONSHIPS.
• CHANGES IN BEHAVIOR OF A PERS/GROUP DUE TO
ANTICIPATION OF THE RESPONSE OF OTHERS –
RELATIONSHIPS AMONG PEOPLE.
• WAYS TO INFLUENCE BEHAVIOUR - EMULATION
,SUGGESTION PERSUASION, COERCION.
75
PSYCHOSOCIAL SUBSYSTEM
LEADERSHIP
• ABILITY TO PERSUADE TO SEEK DEFINED OBJECTIVES
ENTHUSIASTICALLY .
• BINDS A GROUP TOGETHER AND MOTIVATES IT TOWARDS GOALS.
• TAPPING OF LATENT HUMAN CAPABILITY IN ACHIEVING GROUP
OBJECTIVES.
• MGMT ACTIVITIES SUCH AS PLG ORG AND DM ARE DORMANT
COCOONS UNTIL THE LEADER TRIGGER THE POWER OF
MOTIVATION IN PEOPLE AND GUIDES THEM TOWARDS GOALS.
76
PSYCHOSOCIAL SUBSYSTEM
HR ATTITUDES.
• NORMS, VALUES AND CULTURE OF THE ORG MAKE UP
THIS SUB SYSTEM.
• INCLUDES SOCIAL RELATIONSHIPS AND COMMON
NETWORK.
77
• HOW PEOPLE COMMUNICATE AND ACTUALLY
DO THE WORK, STRONGLY INFLUENCES THE
ORG THROUGH THE PSYCHOSOCIAL
SUBSYSTEM.
• TAVISTOCK EXPERIMENTS – PROBLEM WAS
WORKERS HAD PROBLEM COMMUNICATING
WITH MANAGEMENT.
• WHEN A PERSON ENTERS OR LEAVES THE
ORG THE PSYCHOSOCIAL SYSTEM CHANGES.
78
FACTORS AFFECTING HUMAN
BEHAVIOUR
REWARD SYSTEM
ECONOMIC,INCENTIVES
CURRENT
PAST EXPERIENCE
PERSONAL
SITUATION
PERCEPTION
MANAGERIAL SYSTEM
PERSONAL VALUE SYSTEM
(PLG & CONT DECISIONS (ATTITUDES ,PROPENSITIES TO ACT)
LEADERSHIP)
COGNITION
GROUP RELATIONDHIPS
MOTIVATION
WORK SITUATION
(TASK &TECHNOLOGY)
CULTURE (NORMS )
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ORGANISATIONAL SYSTEM
ENVIRONMENTAL SYSTEM
GOALS &VALUES SUBSYSTEM
• CULTURE
• PHILOSPHY
• OVERALL GOALS
• INDIVIDUAL GOALS
PSYCHOSOCIAL
SUBSYSTEM
MANAGERIAL SUBSYSTEM
.
• GOAL SETTING
• PLANNING
• ASSEMBLING
• RESOURCE
• ORGANISING
• IMPLEMENTATION
• HR
• ATTITUDES
• MOTIVATION
• GP DYNAMICS
• LEADERSHIP
• INFLUENCE SYSTEMS
TECHNICAL
SUBSYSTEM
• TASK REQUIREMENT
• KNOWLEDGE
• TECHNIQUES
• LAYOUT OF
FACILITIES
• MACHY EQUIPMENT
• INFORMATION
STRUCTURAL SUBSYSTEM
• TASKS
• WORK FLOWS
• WORK GROUPS
• AUTHORITY
• INFORMATION FLOWS
• PROCEDURES & RULES
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MANAGERIAL SUBSYSTEM
• MGMT – PROCESS OF INTEGRATING HUMAN AND
MATERIAL RESOURCES INTO A TOTAL SYSTEM FOR
OBJECTIVE ACCOMPLISHMENT.
• LINKS OTHER PRIMARY SUBSYSTEMS OF ORGS.
• INTEGRATES ACTIVITIES TOWARDS ACHIEVEMENT
OF EXPLICIT/IMPLICIT GOALS.
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• PLG & CONT ARE THE PRIMARY ACTIVITIES
INVOLVED IN INTEGRATING PURPOSEFUL ORG
ACTIVITY.
• PLG & CONTROL HAVE TO CONSIDERTHE
IMPACT OF EXTERNAL ENVIRONMENTAL
SYSTEM AND THE INTERNAL TECHNICAL AND
PSYCHOSOCIAL SYSTEM.
• BEHAVIOUR IS GOAL ORIENTED AND HUMAN
BEINGS MOVE TOWARDS GOALS BY CHOOSING
AN ALTERNATIVE.
• BEHAVIOUR IS A RESULT OF SEQUENCE OF DM.
82
ORGANISATIONAL SYSTEM
ENVIRONMENTAL SYSTEM
GOALS &VALUES SUBSYSTEM
• CULTURE
• PHILOSPHY
• OVERALL GOALS
• INDIVIDUAL GOALS
PSYCHOSOCIAL
SUBSYSTEM
MANAGERIAL SUBSYSTEM
.
• GOAL SETTING
• PLANNING
• ASSEMBLING
• RESOURCE
• ORGANISING
• IMPLEMENTATION
• HR
• ATTITUDES
• MOTIVATION
• GP DYNAMICS
• LEADERSHIP
• INFLUENCE SYSTEMS
TECHNICAL
SUBSYSTEM
• TASK REQUIREMENT
• KNOWLEDGE
• TECHNIQUES
• LAYOUT OF
FACILITIES
• MACHY EQUIPMENT
• INFORMATION
STRUCTURAL SUBSYSTEM
• TASKS
• WORK FLOWS
• WORK GROUPS
• AUTHORITY
• INFORMATION FLOWS
• PROCEDURES & RULES
83
GOALS AND VALUE SUBSYSTEM
• BASIC VALUES WHICH UNDERLIE GOAL SETTING AND
DM ARE A FUNDAMENTAL PART OF THE ORG SYSTEM.
• NORMATIVE VIEWS OF WHAT IS GOOD AND DESIRABLE.
• PROVIDE STANDARDS WHICH INFLUENCES CHOICE OF
ACTIONS.
• SOCIAL VALUES REFLECT A SYSTEM.
• CULTURAL VALUES PROVIDE COHESIVENESS
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• FIVE LEVELS.
• INDIVIDUAL VALUES.
• GROUP VALUES – AFFECT INDL BEHAVIOUR
AND ACTIONS OF ORG.
• ORGANIZATIONAL VALUES.
• VALUES OF CONSTITUENTS – CUSTOMERS,
COMPETITORS OF ENVIRONMENT AND GOVT
AGENCIES.
• CULTURAL VALUES – VALUES OF THE TOTAL
SOCIETY.
85
GOALS AND VALUE SUBSYSTEM
• THREE PRIMARY PERSPECTIVES.
• ENVIRONMENTAL LEVEL – THE SOCIAL GOALS
IMPOSED ON THE ORG.
• ORGANISATIONAL LEVEL – SYSTEM GOALS.
• INDIVIDUAL LEVEL – PARTICIPANTS GOALS.
86
• GOALS - INFLUENCE THE INTERACTIONS WITH
ENVIRONMENTAL SUPRASYSTEM AND THE
OTHER SYSTEMS.
• FOCUS THE ATTENTION OF PARTICIPANTS
UPON ACTIONS WHICH ARE
ORGANIZATIONALLY RELEVANT.
• HELP DETERMINE THE TECHNOLOGY REQD.
• SET BASIS FOR SPECIALISATION OF EFFORT,
AUTHORITY PATTERNS , COMMUNICATION AND
DECISION NETWORKS AND OTHER
STRUCTURAL RELATIONSHIPS.
87
GOALS AND VALUE SUBSYSTEM
• INFLUENCES ON GOALS
• PERSONALITY OF TOP EXECUTIVES.
• HISTORY OF THE ORG.
• COMMUNITY ENVIRONMENT.
• NORMS ON VALUES WITH WHICH THE ORG DEALS.
• STRUCTURE.
• CULTURAL SAFETY
88
• RESPONDING TO ENVIRONMENT LEADS TO A
CONTINUOUS NEED TO ELABORATE THE GOAL
SET OF THE ORG AND IS INFLUENCED BY
INTERACTION –COMPETITION , BARGAINING,
CO-OPTATION AND COALITION.
• SYSTEM GOALS
• SELF PERPETUATION , STABILITY OF OP, HIGH
RATE OF RETURN, GROWTH , SATISFACTION OF
PARTICIPANTS , TECH LEADERSHIP AND
INNOVATION.
89
SUPRASUBSYSTEM
• EVERY ORG HAS IDENTIFIABLE BUT PERMEABLE
BOUNDARIES WHICH SEPARATE THEM FROM THEIR
ENVIRONMENT.
• THEY RECEIVE INPUTS ACROSS THESE BOUNDARIES,
TRANSFORM THEM AND RETURN OUTPUTS.
• BOUNDARIES PROVIDE A DEGREE OF AUTONOMY AND
INDEPENDENCE FOR ORG FROM EXTERNAL
INFLUENCES.
• SELECTIVELY OPEN TO INPUTS, TRANSFORMATIONS
AND OUTPUT
– ACTS AS A FILTER.
.
90
• ORG DO NOT HAVE ANY PRECISE PHYSICAL
BOUNDARIES.
• ACTIVITIES NECESSARY FOR ORG
TRANSFORMATION PROCESS DEFINE ITS BDY
RATHER THAN THE PHYSICAL STRUCTURES.
• BASICALLY STANDARDISES THE INPUTS AND
OUTPUTS TO THE VARIOUS OP SUBSYSTEMS I.E.
STRATEGIC AND CO-COORDINATIVE SUB SYSTEMS
BUFFER THE OP SUB SYSTEMS OF THE ORG FROM
ENVIRONMENTAL INFLUENCES.
• HETEROGENEOUS AND DYNAMIC ENVIRONMENTS
LEAD TO COMPLEX AND DIFFERENTIATED THE THE
INTERNAL STRUCTURING OF THE ORG .
91
AUTONOMOUS WORKGROUPS
• SOCIO TECH THEORY.
• WORKERS ARE LIKELY TO BE PRODUCTIVE AND
SATISFIED WHEN THEIR SOCIAL NEEDS ARE MET.
• TAVISTOCK RESEARCHES – CONCEPT OF
AUTONOMOUS WORK GROUPS.
• WORKERS WORK AS A TEAM TO COMPLETE AN
ENTIRE TASK VIS A VIS WORKERS PERFORMING A
PARTICULAR CHORE ALONG AN ASSY LIVE.
92
• TWO APPROACHES.
• TEAM BUILDING
• MATRIX ORG – COMPROMISE BETWEEN
STAFF AND COMPLETE
• AUTHORITY.
- VERTICAL FLOW OF AUTHORITY FROM
VARIOUS FM MANAGERS.
- HORIZONTAL FLOW OF PROJECT AUTH.
93
AUTONOMOUS WORKGROUPS
• CHANGES IN EACH SYSTEM AFFECTS THE OTHER
SYSTEMS FOR eg
THE PROBLEM OF RETAINING WORKERS.
MGMT SUBSYSTEM – MGMT OF WORKERS.
• TECHNICAL SUB SYSTEM - AVAILABILITYOF TOOLS
AND RESOURCES.
• PSYCHO SOCIAL SUB SYSTEM --- INTER PERSONNEL
RELATIONSHIPS.
94
UNCERTAINITY
• BURNS AND STALKER SUGGESTED TWO
FACTORS DETERMINANT OF ORG STRUCTURE
AND PERFORMANCE - RATE OF CHANGE AND
THE LEVEL OF UNCERTAINITY IN THE
ENVIRONMENT.TWO TYPES OF SYSTEMS
RECOMMENDED.
95
LAWRENCE AND LORSCH
• SPECIALISED SYSTEM DEVELOP IN RESPONSE TO
DIFFERENT ASPECTS OF THE ORGANISATION
ENVIRONMENT.
• PRODUCTION DEPATRMENTS WHICH HAD STABLE
ENVIRONMENTAL CONDITIONS TEND TO BE MORE
BUREACRATIC THAN RESEARCH DEPARTMENT.
• HIGH LEVEL OF DIFFERENTIATION REQUIRED BY THE
ENVIRONMENT LED TO THE PROBLEM OF
INTEGRATING THE DEPARTMENT.
• THIS PROBLEM SOLVED BY SOME FIRMS EMPLOYING
A GROUP OF MANAGERS TO COORDINATE THE
DIFFERENT DEPARTMENTS.
96
AFFECT OF SIZE
• RELATIONSHIP BETWEEN SIZE AND LEVEL OF
BUREACRATISATION
• ORG SIZE AND JOB SATISFACTION STUDY BY
REVANS AND PORTER--- LARGER THE ORG
LOWER THE JOB SATISFACTION LEVEL ,HIGH
LEVEL OF ABSENTEEISM AND LABOUR
TURNOVER.
97
• ORG SIZE AND UNIONISATION
• BAIN SUGGESTS A STRONG POSITIVE
CORRELATION BETWEEN ORG SIZE AND WHITE
COLLAR UNIONISATION.
• ORG SIZE AND STRIKE PRONENESS
• RESEARCH BY DOE AND PRAIS SUGGEST
LARGER THE FACTORY GREATER THE
FREQUENCY OF STRIKES.
98
Contingency Theory as a Model of Change
• Systems thinking approach adopted by Lawrence
and Lorsch
• Studied the characteristics of organizations and their
environment.
• Believed that determining the best structure and
leadership for an organization is contingent on the
relation of the organization to its environment.
• The systems that constitute the organizations are
affected by “boundaries” and by a process called
“differentiation & integration”.
99
Boundaries:
• The
boundary between an open system and its
environment is permeable; similar to cells in human body.
• Sales people going out in the market to sell.
• Resource mobilization like physical goods and
human resource from environment.
• The problems in an organization first becomes visible at
the boundaries.
• Drop in sales and complaints from customer – a
sign of organizations unresponsiveness towards
customers needs
• Organizations must be attuned and responsive to
environmental changes that occur at the boundary.
100
Contingency Theory as a Model of
Change ..Contd..
Integration:
• Specialized groups / units for tasks
• Independent style of interaction with the organization
• Different impact of their behavior on organization
• Need for coordination between units to achieve
organizations overall goals
101
• The effective coordination between units is called
Integration
• Need for appropriate structure – such as
bureaucratic or matrix
• Need for appropriate leadership
Differentiation:
The organizational units vary on following four
dimensions:
• Formality of structure
• Goal Orientation
• Time Orientation
• Interpersonal Orientation
102
Formal and Informal Systems
• Deals with:
• The formal policies and procedures of the organization.
• The informal ways in which organizational members work
together.
• Two theories have been put forward by:
• Marvin Weisbord’s
• The Six – box model – Formal Systems
• The organizational fit – Formal and Informal
Interactions
• Nadler & Tushman’s
• Congruence Model - Formal and Informal Interactions
103
The 6 Box Model
Purposes:
What business are we in?
Agreement on goals in
missions
Relationships:
How do we manage conflict
among people with
technologies? How do workers
get along
Structure:
How do we assign the
work and how it gets
done?
Leadership:
Does some one keep the
boxes in balance?
Helpful mechanisms:
Have we adequate
coordinating technologies?
Like budgeting, planning &
control, and management
information
Rewards:
Do all needed tasks
have incentives?
104
Organizational Fit
• How the organization fits within its environment
• Compatibility with customers, government, union
• How the individual fits with in the organization
• Compatibility of individual’s personal values, political
orientation, hobbies, style of dress with other
organizational members
105
The Congruence Model
• Organization
draws inputs from environment in the
following form
• Capital, raw material, technology and people
• Organization history
• Pattern of employee behavior
• Organizational policies and procedures
• Management’s method for decision making
• The model takes into account the inputs and resulting
output after transformation
106
• The transformation process includes four components:
• Task – job and their inherent characteristics
• Informal organizational structure – social structure
among organizational members including informal
communication, politics and authority structure
• Individual – personal characteristics of employee
such as age, sex, education
• Formal organizational arrangements –
documented managerial and operational structure,
the pay system, the management information
system
• Outputs are the outcomes for the organization, the
work group and the individual.
107
A Change – Based Organizational Framework
• According to Porras and Robertson model, the factors in the
internal organizational environment that shape and guide the
behavior of workers fit into four categories:
• Organizing arrangements – the formal elements that
coordinate the behavior of people and groups in an
organization
• Goals & Strategies
• Structure & administrative policies and procedures
• Administrative system & reward system
• Ownership
108
• Social factors – characteristics of the people in the
organization and their relations
• The culture, management style, interaction
process, informal patterns & networks and
individual attributes
• Physical settings
• The building and locations
• Technology
• Equipments, IT, job design, work flow design,
technical expertise & procedures and technical
systems
109
Thank You
110