ORGANIZATIONS AND
ORGANIZATIONAL CHANGE
Chapter 8
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Organizations and
Organizational Change: Overview
 Three Theories of Organizations
 Organizational Structure
 Components of Social Systems
2
Three Theories of Organizations
 Organizations: A coordinated group of
people who perform tasks to produce
goods or services.
 3 Major Schools of thought:
1. Classical Theory
2. Neoclassical Theory
3. Systems Theory
3
Three Theories of Organizations:
Classical Theory (1 of 3)
 Developed in early 20th century
 Describes form and structure of
organizations
 4 components:
1.
2.
3.
4.
A system of differentiated activities
People
Cooperation toward a goal
Authority
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Three Theories of Organizations:
Classical Theory (2 of 3)
4 Structural Principles:
1. Functional Principle: Division into
units that perform similar functions.
2. Scalar Principle: Structured by a
chain of command that grows with
increasing levels of authority.
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Three Theories of Organizations:
Classical Theory (2 of 3)
4 Structural Principles:
3. Line/Staff Principle: Line functions
directly affect goals; staff function
supports line activities.
4. Span-of-Control Principle: Concept
related to number of subordinates a
manager is responsible for supervising
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Three Theories of
Organizations: Neoclassical
 Developed in the 1950s
 Describes psychological or behavioral
issues with organizations
 Argued for less rigid – more humanistic
work
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Three Theories of
Organizations: Systems (1 of 3)
 Developed in the 1970s
 Describes organizations in terms of
interdependent components that form a
system
 Complex and dynamic view of
organizations
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Three Theories of
Organizations: Systems (2 of 3)
Organization is composed of 5 parts:
1.
2.
3.
4.
5.
Individuals
Formal organization
Small groups
Status and role
Physical Settings
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Three Theories of
Organizations: Systems (3 of 3)
 With all these parts – need means to
provide coordination and linkage
Communication
 Decision making

 Parts and interactions do not exist for
themselves, but for a larger goal
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Organizational Structure
 Structure: arrangement of work
functions within an organization
designed to achieve efficiently and
control.
 Various types of structures
 Organizations seek the optimal match of
structure to their environment
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Organizational Structure:
Coordinating Mechanisms
Basic elements of organizational
structure:
1.
2.
3.
4.
5.
Mutual adjustment
Direct supervision
Standardization of work processes
Standardization of work output
Standardization of skills and knowledge
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Organizational Structure:
5 Parts of Organizations
1. Operating core
2. Strategic apex
3. Middle line
4. Techno-structure
5. Support Staff
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Organizational Structure:
Reorganizing & Downsizing (1 of 2)
 Reorganizing: Process of changing the
manner in which work is configured in
an organization to achieve greater
efficiently.
 Downsizing: Process of reducing the
size of an organization by the
elimination of jobs and employees;
“right-sizing”.
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Organizational Structure:
Reorganizing & Downsizing (2 of 2)
 Job loss usually occurs at middle line,
techno-structure and support.
 Companies usually become flatter.
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Social Systems: Roles (1 of 3)
 Social System: The human components
of a work organization that influence
the behavior of individuals and groups.
 Roles: Set of expectations about
appropriate behavior in a position
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Social Systems: Roles (2 of 3)
Important aspects of roles
Impersonal
Related to task behavior
Difficult to pin down
Learned quickly and can produce major
behavior changes
Roles and jobs are different
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Social Systems: Roles (3 of 3)
Role Episodes
Stage 1: Group expectations for a
particular position
Stage 2: Communication about
expectations
Stage 3: Perceived expectations about
role
Stage 4: Actual role behavior
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Social Systems: Norms
Norms: A set of shared group expectations about
appropriate behavior.
Important Properties of Norms
“Oughtness” or “shouldness” – prescription for
behavior
More obvious for important behaviors
Enforced by group
Degree that norms are shared and that deviation
is acceptable vary
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Social Systems:
Organizational Culture
Culture: The language, values, attitudes, beliefs,
and customs of an organization.
3 Features of Organizational Culture
Organization’s culture can be traced to founders
Develops from organizations experience with
external environment
Develops from need to maintain effective
working relationships with employees.
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Organizational Culture
Organizational Culture: A common perception
held by the organization’s members; a system of
shared meaning.
• Innovation and risk taking
• Attention to detail
• Outcome orientation
• People orientation
• Team orientation
• Aggressiveness
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Organizational Culture
Example (1 of 4)
Ben & Jerry’s is founded on and dedicated to a sustainable
corporate concept of linked prosperity. Our mission consists of 3
interrelated parts:
Product Mission
To make, distribute & sell
the finest quality all natural
ice cream & euphoric
concoctions with a
continued commitment to
incorporating wholesome,
natural ingredients and
promoting business
practices that respect the
Earth and the Environment.
Social Mission
Economic Mission
To operate the Company To operate the company
on a sustainable financial in a way that actively
basis of profitable growth, recognizes the central
increasing value for our role that business plays
stakeholders & expanding in society by initiating
innovative ways to
opportunities for
development and career improve the quality of
growth for our employees. life locally, nationally &
internationally.
http://www.benjerry.com/
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Organizational Culture
Example (2 of 4)
We have a progressive, nonpartisan social mission that seeks to meet
human needs and eliminate injustices in our local, national and
international communities by integrating these concerns into our dayto-day business activities. Our focus is on children and families, the
environment and sustainable agriculture on family farms.
• Capitalism and the wealth it produces do not create opportunity for
everyone equally. We recognize that the gap between the rich and the poor
is wider than at anytime since the 1920's.We strive to create economic
opportunities for those who have been denied them and to advance new
models of economic justice that are sustainable and replicable.
• By definition, the manufacturing of products creates waste. We strive to
minimize our negative impact on the environment.
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Organizational Culture
Example (3 of 4)
• The growing of food is overly reliant on the use of toxic chemicals and
other methods that are unsustainable. We support sustainable and safe
methods of food production that reduce environmental degradation,
maintain the productivity of the land over time, and support the
economic viability of family farms and rural communities.
• We seek and support nonviolent ways to achieve peace and justice. We
believe government resources are more productively used in meeting
human needs than in building and maintaining weapons systems.
• We strive to show a deep respect for human beings inside and outside
our company and for the communities in which they live.
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Organizational Culture
Example (4 of 4)
Ben & Jerry’s offers a progressive benefits package that includes
the usual stuff plus paid family leave, health club memberships
and three free pints of Vermont’s Finest super premium ice
cream, frozen yogurt and sorbets every day! Ben & Jerry’s
Homemade, Inc. is an equal opportunity employer, dedicated to
the policy of non-discrimination in employment on any basis
including gender, race, ethnicity, veteran status, religious
affiliation, sexual orientation, age, disability or national origin.
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Organizational Culture
Example (1 of 4)
Mission statement
At IBM, we strive to lead in the creation, development
and manufacture of the industry's most advanced
information technologies, including computer systems,
software, networking systems, storage devices and
microelectronics.
We translate these advanced technologies into value
for our customers through our professional solutions
and services businesses worldwide.
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http://www.ibm.com/investor/company/index.phtml
Organizational Culture
Example (2 of 4)
IBM is committed to its obligations to
society. Some of the programs in support are:
IBM Governmental Programs
Diversity
Environmental Affairs
Corporate Responsibility Report
IBM Community Relations
IBM Accessibility Center
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Organizational Culture
Example (3 of 4)
IBM is so much more than just a job. It’s a
place where you can dream, innovate and
work with other intelligent and motivated
people — a truly global company. One where
you can find work/life balance and make a
difference. Just use the links below to explore
some of the reasons you might want to work
at IBM.
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Organizational Culture
Example (4 of 4)
Reason #97: IBM makes a difference …. And so can you
Reason #86: It’s enduring…but it’s a whole new ball game!
Reason # 58: Big Blue is environmentally green!
Reason #24: Great technology and cool products
Reason #22: Balance doesn’t mean standing on your head
juggling projects until midnight.
Reason #17: IBM has a lot to give, and we give back freely.
Reason #9: Global is as global does.
Reason #4: People and their differences really matter at IBM.
Reason #1: IBM is a great place to work…and you can make
a difference
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Organizational Culture
Organizational Culture: A common
perception held by the organization’s
members; a system of shared meaning.
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Organizational Culture:
News Clip
• Innovation and risk taking
• Attention to detail
• Outcome orientation
• People orientation
• Team orientation
• Aggressiveness
• Stability
Microsoft clip–
Write down
examples from
these different
aspects of culture
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Organizational Change
 Organizational Development: A system of
planned interventions designed to change an
organization’s structure and/or processes to
achieve a higher level of functioning.
 Organizations exist to fulfill some purpose or
objective.
 Organizations do not change quickly.
 Organizations need to change as the environment
changes.
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Organizational Change
 Organizational change follows a pattern of
punctuated equilibrium.
 Individuals find change difficult; thus they
often resist change.
33
Organizational Change
 Organizational development is the process of
assisting organizations in preparing for and
managing change.
 Often change will occur by altering the
organization’s work structure or worker attitudes.
 4 general phases of change




Diagnostic
Intervention
Implementation
Evaluation
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Organizational Change
 There is no single theory or approach but
there is a variety of methods to help
organizations manage change.
 Focus is on long-term solutions.
 Generally aimed at the team, unit or
organizational level and rarely at the
individual.
 An applied, practitioner-oriented area of the
behavioral sciences.
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Organizational Change
Change Agent – usually the OD consultant who
guides OD; involved in diagnosis, identification of
courses of action, recommending specific changes,
and occasionally implementation.
Client – recipient of the change effort; this is usually
the organization, but occasionally may be a group of
individuals.
Intervention – what the change agent does on behalf
of the client.
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Phase 1: Denial
 Denial is a psychological defense.
 People do not want to believe the change is
“real”.
 They are essentially in “shock”.
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Phase 1: Denial
They may try to:
– Hold onto the past, continue “business
as usual”.
– Avoid thinking about the change.
– Try to stop, or slow down
implementation of the change.
– Ignore their own feelings; focus
outside of themselves.
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Phase 2: Resistance
 Resistance to change is normal
 People are being asked to give up their
“comfort zone” for the unknown
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Phase 2: Resistance
People in Phase 2 may need acceptance of feelings
and reassurance of their value as an employee.
Employees may feel:
 Afraid
 Threatened
 Powerless
 Angry
 Upset
 Anxious
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Phase 3: Exploration
 People are coming off the “low point” in the
Change Curve.
 People begin accepting the change and start to:
 Take an interest in the organization again
 Clarify goals
 Explore how to make the change work
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Phase 3: Exploration
People in Phase 3 need a clear vision of what
the future will look like and how they will fit in.
Accepting the
Change
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Phase 4: Commitment
 People feel that they “made it through” the
change.
 People recover their sense of productivity and
self- esteem.
 Change now becomes the new “business as
usual”.
Recognize that some members of a group may
not make it to this stage and will require
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additional assistance.
Phase 4: Commitment
People need to be rewarded for their success
Thanks!
We couldn’t
have made
this change
without your
hard work
and support!
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Empowerment
 Empowerment: The process of giving
employees in an organization more power
and decision-making authority within a
context of less managerial oversight.
 4 Dimensions (Spreitzer, 1997):




Meaning
Competence
Self-determination
Impact
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Model of Planned
Organizational Change
To change an organization you need to know:
1. Variables that can be manipulated by intervention
2. Outcomes intended by change
Work setting has 4 components:
1.
2.
3.
4.
Organizing arrangements
Social factors
Physical setting
Technology
These components
influence Individual
Development &
Organizational
Performance
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Overcoming the Resistance to
Change
 Psychological ownership: feeling that one is
psychologically tied to an object and is
possessive of it.
 Human needs associated with psychological
ownership:



Self-enhancement
Self-continuity
Control and efficiency
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Overcoming the Resistance to
Change
 Three types of organizational change that
influence the relationship between
psychological ownership and
acceptance/rejection of change:



Self-initiated vs. imposed change
Evolutionary vs. revolutionary change
Additive vs. subtractive change
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Overcoming the Resistance to
Change
 Education and communication
 Participation
 Facilitation and support
 Negotiation
 Manipulation
 Coercion
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Major Organizational
Change Interventions
Features of culture change process:
1. Strong Leader
2. A clear vision of what needs to be done
3. Development of new work procedures
4. An organization is open to learn.
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Major Organizational Change
Interventions
 Total Quality Management:


Comprehensive approach to achieving greater
organizational efficiency based in part on the use
of statistical information to aid in decision
making.
Bridges psychology, statistics, marketing,
business
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Major Organizational Change
Interventions
 Total Quality Management:

4 factors:
1.
2.
3.
4.

Sharing of information
Developing knowledge
Rewarding organizational performance
Redistributing power
Research shows that organizations have
positive experiences with TQM (Lawler et al.,
1995).
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Other OD Techniques
 T-groups (sensitivity training)
 Management by Objectives (MBO)
 Team building
 Survey Feedback
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OD Techniques: T-groups
 Use unstructured group interaction to assist workers
in achieving insight into their own motivations and
behavioral patterns in dealing with other
organizational members.
 Typically uses a professional leader that serves as a
facilitator.
 Goals



Worker to gain insight into own behavior
Develop greater openness
Improve skills in understanding and dealing with others
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OD Techniques: T-groups
 Empirical Research:


Research is inconclusive
They may increase job satisfaction and employee
attitudes
 Concern is whether insight and increased
sensitivity transfers to the job
 Popular in the 60’s and 70’s, but not often
used today.
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OD Techniques: Management by
Objective (MBO)
 A goal-setting technique in which
supervisors or subordinates jointly set
performance goals. At the end of the goal
period, their attainment is evaluated and new
goals are set.
 Most widely used OD technique - it can be
applied almost anywhere.
 One of the most successful OD techniques
when properly implemented.
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OD Techniques: MBO
 Employees must participate in goal-setting
 Feedback must be provided
 Guidelines for improvement must be provided
 Goals must be realistic
 Upper level management must support the
program
 Equal emphasis on the individual, work group,
and organizational goals
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OD Techniques: Team Building
 Team building – teams of workers discuss how to
improve team performance by analyzing group
interactions; teams identify the strengths and
weaknesses of interactions with each other.
 Similar to T-groups except the focus is NOT on the
individual, but on team functioning and goal
attainment.
 May be the best OD technique for increasing job
satisfaction and morale.
 Studies indicate that it is better than T-groups.
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OD Techniques: Survey Feedback
 Process whereby the OD consultant works
with the organization to develop a survey
instrument to collect data that is used to solve
specific problems or institute a program for
managing change.
 Surveys usually measure employee attitudes
or perceptions of work-related issues.
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OD Techniques: Survey Feedback
 Surveys can be difficult to design to obtain
reliable and valid data. Should be done by
I/O psychologists or social scientists trained
in survey development.
 Surveys are administered to all workers or to
a representative sample.
 Consolidate responses and present the results
to the client.
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OD Techniques: Survey Feedback
 Advantages:





Increases upward flow of communication
Positive effect on workers’ attitudes
Shows workers they are NOT alone in their
perceptions and attitudes
Efficient for collecting large amounts of data
Anonymity can provide accurate appraisals
 Empirical Research

Feedback surveys are effective OD techniques
when followed up by positive actions.
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Organizational Change
 Many techniques – some work (e.g., survey
feedback, MBO) while others show mixed
results (e.g., T-groups, TQM)
 What works in one organization may not work
in another
 Quality of the job of OD consultants varies
greatly
 Measuring effectiveness is difficult
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Empirical Organizational
Change Research
 Change interventions resulted in no change
more than half the time (Porras & Robertson, 1992)
 The percentage of studies reporting a
negative change is small (Porras & Robertson,
1992)
 To be successful, organizational change must
include systemwide design and
transformation strategies (Macy & Izumi, 1993).
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Supervisors’ Challenge
 Supervisors face unique challenges with
organizational change:




Even though managers may disagree with higher level
decisions, it is still their professional responsibility to
implement the change.
Voicing disagreement of the change to the workgroup can
be damaging to the organization.
Disagreement with change may create an “us vs. them”
dynamic.
Supervisors can help their subordinates adapt to the
change.
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What is the Manager’s
Role?
Many sizeable changes come
from the topmost levels of an
organization and are generally
unexpected by the staff below
them.
Managers are required
to act as a link between
different levels in the
organization.
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“Managing” Change is
Challenging
 Many leaders want employees to just make the
change happen and may not be interested in how
employees feel about it.
 Change is much more traumatic and difficult for
employees than most leaders believe.
 Many employees think it is wrong to feel upset about
change or voice concerns.
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“Just do it” May Lead to Disaster!
 Difficulties are pushed underground
 Externally, people act like nothing is wrong
 Internally, they could be:
 Paralyzed
 Disoriented
 Angry
 Especially true for organizations and individuals that
don’t often experience change!
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Summary
 Change is often traumatic and difficult.
 Leading a group through a change provides
significant challenges.
 Successful change management requires you to:
 Recognize the source of change.
 Evaluate the complexity of the change.
 Plan ways to involve people.
 Choose/recognize the time scale.
 Formalize/communicate a plan.
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