WMG 23– ODC – A Few Rules Punctuality Late by 15 minutes – Not more than twice If late for the first class, please enter the class only after the break No intimation through friends Attendance: As per rules. Assignments – Claronline, Time Limit Cases – Please don’t embarrass me… Quiz – 2 best scores out of 3 Plagiarism

The IBM Case Organisation – growth, decline, change System 360 – ‘complexity’ in business 130% increase in manpower for 97% increase in sales – control vs productivity? Consensus, non-concurrence, meetings ‘The IBM Way’? What was it? What effect did it have on functioning? ‘Bureaucratic culture’, Bureaucracy run amok – how to find the balance between control and flexibility? Why did IBM failed to see opportunities in PC market? ‘Values’ of mainframe leadership? What are values?

The IBM Case (Cont’d) ‘Values’ of mainframe leadership? What are values? How do they affect performance? Is it ‘necessary to have ‘values’? Did IBM’s environment change? How does environment affect an organization? What can organisations do to cope with changes? What impact did IBM’s size have on it’s performance? Incentive – dress code – direct communication Did Gerstner shift focus of IBM? Why?

Warm Up What do you think this course is about? How are OB, HRM, ODC (OT), OD similar or different from each other? What does an organisation do? How? Why an organisation? Why not an individual? Theory, Design, Structure, Culture, Change, Redesign What is the purpose of Organisation Design and Change (OT)?

Micro Macro Theory OB OT Application HRM OD

Value Creation Value creation takes place at three stages: input, conversion and output Inputs: people, skills, knowledge, r/m, capital Conversion: manner of using people and technology that converts input into output Output: finished product produced that is used by the environment

Inputs from Environment Conversion (Value Added) Outputs R/M HR Capital Information Customers Suppliers Conversion (Value Added) Machine Computers Competence Outputs Goods Services Dividends Salaries Value to customers Organisation’s Environment Customers Suppliers Shareholders Employees Government Competitors

Why an Organization? Why not individual? Specialization and Division of Labor Large-scale use of technology Economies of scale Economies of scope (different products with same facilities, same assembly lines) Manage external environment effectively Lower transaction costs Exercise Power and Control

Organization Structure the formal system of task and authority relationships that control how people coordinate their actions and use resources to achieve organizational goals Can you imagine the systems, processes, structures (committees) in old IBM? New IBM?

Organization Culture the set of shared values and norms that control organizational members’ interactions with each other and with suppliers, customers, and other people outside the organization Bureaucratic? Rule Bound? HRD Oriented? Remember IBM?

Organization Design the process by which managers select and manage aspects of structure and culture so that an organization can control the activities necessary to achieve its goals Market Orientation?, Management of Change – Change What? Technology, Automation, Work Culture, Product Groupings/Managers

Organizational Change the process by which organizations move from their present state to some desired future state to increase their effectiveness Why change focus? What happens when goals/focus changes? Why change ‘whole systems’? Why change from a rigid bureaucracy to a flexible team structure or to a Product Structure? And how do you do it? What happened at IBM?

Importance of Organizational Design and Change Dealing with contingencies Gaining competitive advantage The ability to outperform other companies because of the capacity to create more value from resources Core competences Strategy

Managing diversity Differences in the race, gender, and national origin of organizational members have important implications for organizational culture and effectiveness Promoting efficiency, speed, and innovation The better the organizations function, the more value they create

Consequences of Poor Organizational Design Decline of the organization Talented employees leave to take positions in growing organizations Resources become harder to acquire Resulting crisis impels managers to change organizational structure and culture