Organizations and Organizational Change Chapter 8 Organizations and Organizational Change Psychology Applied to Work®

Learning Objectives Explain the classical and structural theories of organizations. Describe the components of social systems: roles, norms, and organizational culture. Understand the concept of person-organization fit. Explain downsizing, outsourcing, offshoring, and mergers and acquisitions. Explain the creation of global organizations. Discuss the rationale for organizational change. Understand why employees resist change. Understand the concept of corporate social responsibility. Psychology Applied to Work®

Overview Organizations are: “Alive” Don’t have “skin” Under constant pressure to change Able to shape the behavior of their members Major activity of I/O psychologists is to help with change Birth of “O” psychology Psychology Applied to Work®

Theories of Organizations Classical Theory Four basic components to any organization A system of differentiated activities People Cooperation toward a goal Authority Psychology Applied to Work®

Theories of Organizations Classical Theory (cont’d) Four major structural principles Functional principle Scalar principle Line/staff principle Span-of-control principle Psychology Applied to Work®

Theories of Organizations Psychology Applied to Work®

Theories of Organizations Psychology Applied to Work®

Theories of Organizations Structural Theory Seven basic parts of an organization Operating core Strategic apex Middle line Technostructure Support staff Ideology Politics Psychology Applied to Work®

Components of Social Systems No formal structure apart from its functioning Have three informal components: Roles Norms Organizational Culture Psychology Applied to Work®

Roles Expectations others have about behaviors in specific positions Five aspects of roles: Impersonal Related to task behavior Difficult to pin down Learned quickly and can produce behavior changes Person in one job may have several roles Psychology Applied to Work®

Roles (cont’d) Key concepts Role conflict Role ambiguity Role overload Psychology Applied to Work®

Norms Unwritten, shared expectations define appropriate group behavior They differentiate positions Four important properties of norms: “Oughtness” quality of norms is a prescription for behavior More obvious enforcement for “important” group behaviors Regulated internally by the group Shared to varying degrees and amount of deviation allowed Psychology Applied to Work®

Norms (cont’d) Three-step process for developing and communicating norms; group must: Define and communicate Monitor and judge if being followed Reward conformity and punish nonconformity Norms can both promote or deviate from organizational goals Psychology Applied to Work®

Organizational Culture Concept of culture is complex pattern of variables Can be seen as three layers of an organization’s culture Observable artifacts (from which deeper meaning drawn) Symbols (physical objects, locations) Language (jargon, gossip, humor) Narratives (stories, legends) Practices (rituals, taboos) Espoused values Beliefs endorsed by management Can be different without anxiety Basic assumptions Deeply ingrained values Rarely confronted without anxiety Psychology Applied to Work®

Organizational Culture (cont’d) Psychology Applied to Work®

Person-Organization Fit Perception of value and goal match between employee and organization Schneider’s ASA cycle – people drawn to organizations that fit More predictive of turnover than job performance Psychology Applied to Work®

Downsizing organizations eliminate jobs to reduce payroll costs Downsizing (also called “reduction in force”) organizations eliminate jobs to reduce payroll costs Jobs are eliminated; employees are not fired Psychology Applied to Work®

Downsizing Psychology Applied to Work®

Downsizing Psychology Applied to Work®

Outsourcing and Offshoring Outsourcing – functions performed by employees of the organization are eliminated, as functions are now performed by subcontractors or contingent personnel. Offshoring – jobs are shipped overseas to cheaper labor markets Psychology Applied to Work®

Global Organizations Evolution of global cultures: International → Multinational → Global Hofstede’s four main dimensions: Power distance Individualism-collectivism Masculinity-femininity Uncertainty avoidance Psychology Applied to Work®

Global Organizations (cont’d) Psychology Applied to Work®

Global Organizations (cont’d) Diversity of values (Marquardt) Diversity leads to conflict Global organization’s core values must transcend differences to be: Fair Reasonable Respectful of local culture Differences in values can be reduced to four key dimensions Leadership roles and expectations Individualism and groups Communications Decision-making and handling conflict Psychology Applied to Work®

Organizational Change Forces responsible for organizational change today Technology Business based change Small intentional organization change can grow to produce unintended change Psychology Applied to Work®

Corporate Social Responsibility Corporate volunteering Sustainability Intersection of economic, social, and environmental goals Psychology Applied to Work®