Org Design Process of coordinating the structure elements Range of theories Classical org theory – assume one best way to design/structure org (early 1900s) Tall hierarchy best w/ formal authority Neoclassical theory – human relations focus w/goal of ee satisfaction Flatter structures w/decentralization

Org Design Contingency Approaches – Lawrence& Lorsch (1969); now most accepted org design Design depends on org’s environment Including economy, competitors, geography, suppliers, workforce Studies comparing orgs in stable v unstable environments resulted in models of ‘mechanistic’ v ‘organic’ orgs

Org Design Mechanistic Orgs – stable environments with little change in product, market, or technology Allows specialization of tasks given that people have time to develop their expertise Organic Orgs – unstable environments Little specialization; need broad knowledge to deal w/changing conditions Little authority; rely on participative decisions Effectiveness results when form matches environment

Mintzberg’s Theory Orgs composed of 5 basic elements; which one is dominant determines most effective design for that situation Operating Core: ees who do the basic work related to product/service Strategic Apex: top-level execs who run it Middle Line: mid-managers who go- between operating core & strategic apex

Mintzberg (cont.) Technostructure: specialists who standardize org systems Support Staff: indirect support services Mintzberg specifies 5 designs based on which of the 5 groups dominates… 1) Simple structure: small, informal,w/one person in charge 2) Machine bureaucracy: specialized, power at top; can be routine/boring

Mintzberg (cont.) 3) Professional Bureaucracy: power in operating core (univ.) but still some rules coming from strategic apex 4) Divisional Structure: autonomous units organized by central headquarters; middle line has most power 5) Adhocracy: informal, often team-based; support staff has power

Org Change and Org Development Ch 16

Org Change and OD Org Change – in structure, technology or people 1 st order – minor, incremental changes 2 nd order – major changes, all levels Org Development – methods used to implement org change Change required due to demographics, regulations, competition, technology…

Group Discussion Situation A: a new system is introduced at a large university that will replace the practice of transmitting memos on paper. Situation B: A very popular employee who has been w/the org for many years is retiring. He’ll be replaced by someone new from outside.

(cont.) Discuss major impediments to change for each situation Identify ways to overcome these impediments Does the nature of the situation seem to call for different ways of overcoming the impediments?

Lewin’s Force Field Analysis Model UnfreezeDesired State Refreeze To unfreeze, produce imbalance betw driving and restraining forces. To refreeze, new structure must support and reinforce new system to avoid slipping back to old ways. developed 50 yrs ago, still prevalent today

Driving & Restraining Forces To increase driving forces: Create urgency for change (crisis) Ees need to know about competitive threats, org’s financial problems Customer-driven change (complaints) To reduce restraining forces: Communicate (increase procedural justice) Train ees so they can use new skills All else fails, coercion (Continental Airlines – firing majority of senior execs). Best when need quick change

Employee Resistance to Change Main reasons for creating resistance: Direct costs (need to see change as positive, not loss of power/status) Saving face – in political situations want to prove decision or person was wrong Fear of unknown – make change explicit Incongruent org systems – rewards don’t encourage new behaviors

Refreezing Through org structure changes Through org reward systems consistent with new changes Lewin’s model effectively describes change process, but overlooks: Change agents Diffusing change

(cont…) Change agents – person who forms & communicates change, then builds commitment (facilitator) Some orgs rely on external consultants, but typically internal people Transformational leaders Diffusion of change – often works best if start w/pilot project, then spread.

Evaluating Change Using Kirkpatrick’s training evaluation model: Reactions – did ees like the change? Learning – what was acquired from the change? (new skills learned?) Behavior – what changes in job behavior occurred? (individual-level) Outcomes – what changes in productivity occurred? (org-level) Reactions measure restraining forces, learning reflects change itself, behavior measures refreezing success.

OD Interventions OD implements org change w/emphasis on org effectiveness Tries to improve org capability to solve problems & cope with change Client-consultant relationship (process consultation) Facilitator observes group, then works w/them (conflict mgmt)

OD Interventions Total Quality Movement (TQM) Developed by Deming (U.S.) in 50’s, exported to Japan, then back to U.S. in 80s Focus on managing process of work and challenge ees to constantly improve quality Teach stats to measure variance in quality Emphasis on immediate feedback re:quality Continuous improvement (kaizen) is key

OD Interventions (cont.) Management by Objectives (MBO) – develop specific org goals Goals mutually set w/ ee involvement Includes evaluation component Quality of Work Life (QWL) – encourage ee participation to improve sat Could include job enrichment Use of ‘quality circles’ to fix specific problems

OD Interventions (cont.) Survey feedback – employee opinion surveys with unit/dept follow-up meetings to solve problems The process raises ee expectations that change will occur, so mgmt must commit

OD Assessment Does it work? Work best if use combination of interventions w/mgmt support Difficult to evaluate given multiple causes of any change (need quasi-experiments) Ethical concerns Ethics of behavior interventions from ee perspective? (coercion)

Culture & OD Values/goals of OD fit U.S. culture (democratic) Other cultures expect leaders to make decisions w/o ee input Cultural diffs in resistance to change affect OD success (England, China value tradition; U.S. values change)

Trice & Beyer (1993) Describe change along 4 dimensions Pervasiveness – % of org activities that will be affected by change Magnitude – distance betw old and new Innovativeness – degree to which new ideas are unprecedented Duration – how long it will take and how permanent it will be

Trice & Beyer Institutionalization of change – takes years, may continue to see residue of old culture Includes removal of prominent people who represent old culture Symbolic message Removes resistance