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

2. 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.
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3. 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
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4. Theories of Organizations
Classical Theory
Four basic components to any organization
A system of differentiated activities
People
Cooperation toward a goal
Authority
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5. Theories of Organizations
Classical Theory (cont’d)
Four major structural principles
Functional principle
Scalar principle
Line/staff principle
Span-of-control principle
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6. Theories of Organizations
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7. Theories of Organizations
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8. Theories of Organizations
Structural Theory
Seven basic parts of an organization
Operating core
Strategic apex
Middle line
Technostructure
Support staff
Ideology
Politics
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9. Components of Social Systems
No formal structure apart from its functioning
Have three informal components:
Roles
Norms
Organizational Culture
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10. 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
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11. Roles (cont’d) Key concepts Role conflict Role ambiguity Role overload
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12. 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
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13. 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
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14. 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
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15. Organizational Culture (cont’d)
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16. 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
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17. 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
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18. Downsizing
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19. Downsizing
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20. 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
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21. Global Organizations
Evolution of global cultures: International → Multinational → Global
Hofstede’s four main dimensions:
Power distance
Individualism-collectivism
Masculinity-femininity
Uncertainty avoidance
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22. Global Organizations (cont’d)
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23. 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
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24. Organizational Change
Forces responsible for organizational change today
Technology
Business based change
Small intentional organization change can grow to produce unintended change
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25. Corporate Social Responsibility
Corporate volunteering
Sustainability
Intersection of economic, social, and environmental goals
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