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Orgs 2000 term notes

By tina199459 Dec 03, 2013 6299 Words

The organization has set of features shared by modern large scale organizations called bureaucracy (Max Weber – note, very strategic design-y)
o Features include:
o 1. Clearly delineated positions and jobs – with required qualifications o 2. Formal hierarchy of positions – line of authority setting out power/limitations (“chain of command”)
o 3. Formal rules and standard operating procedures
o 4. Training, career paths, reward systems (aka advancement) Macro/Micro analysis
o Macro – organization and external organizational environment o Micro – groups & teams and interpersonal relations
o Organizations are complex systems and what happens on one level affects another  Unanticipated consequences of changes!
3 lenses
o Strategic design
 View of the organization: input-throughput-output system  Key concepts: activities, interdependence, resources (esp. information)  Key processes: grouping, linking, and aligning
 View of the environment: resource base (source of inputs), competitive market  Role of the leader: “organizational architect”, strategist  Stimuli for change: lack of internal alignment, lack of “fit” between organization & environment

 Obstacles to change: inadequate information (“they don’t get it”), inadequate analysis (“the case isn’t convincing”)
o Political system
 View of the organization: an arena for conflict
 Key concepts: power & influence, interests
 Key processes: conflict, negotiation, coalition building, networking  View of the environment: external stakeholders
 Role of the leader: forging coalitions, identifying and leveraging interests, negotiating  Stimuli for change: shifts in dominant coalition, in power of stakeholders  Obstacles to change: entrenched interests (“they won’t buy in because they stand to lose”) o Cultural perspective

 View of the organization: a social construct – what we think it is  Key concepts: identity, symbols, values, basic assumptions  Key processes: meaning and interpretation, legitimating
 View of environment: social and cultural network
 Role of the leader: articulating vision, symbolizing the culture, understanding and leveraging the culture
 Stimuli for change: challenges to basic assumptions, contending interpretations  Impediments to change: dominant culture, established mindsets (“they can’t see it”) Levels of analysis
o Individual
o Group
o Organization
o Teams
o Gender and Diversity


Incentives and Motivation
Change and CSR


Strategic design – systems deliberately constructed to achieve certain strategic goals o Efficiency (accomplishing strategic goals with least resources)+ effectiveness (goals accomplished to standards) emphasized

o Assumption: organization has a strategy for creating value (value proposition/distinctive competitive advantage) – establishes what activities will lead to success o Key strategic question: which activities should be inside the boundaries of the organization and which outside?

Key elements
o Information processing and enhancing system
o Task – basic element – smallest unit of activities needed to be done to achieve overall strategic goals
 Vary in complexity, routinization and interdependence
o Task interdependence
 Sequential interdependence – one task completed and then handed off to next stage  Harder to manage than pooled, easier than reciprocal
 Pooled interdependence – tasks undertaken at same time and final result put together  Easiest to manage
 Reciprocal interdependence - tasks conducted in repeated interaction with each other  Hardest to manage
o Organizational design choices begin with strategic grouping – differentiation of clusters of activities, positions, and individuals into work units
o Then they must go through linking – ensure that resources and information flows efficiently and effectively between activities/groups
o Lastly must use alignment mechanisms (incentive systems, information systems, etc.) to ensure people have the resources AND incentives to carry out tasks assigned to them Strategic grouping – gathering tasks, functions, disciplines and separating from others o Assumption: coordination and communication are easier within unit than across units o Basic criteria

 Activity (function)
 Product/technology (business division/unit)
 Market/customer (geography/customer segment)
o Grouping by expertise/function – bringing together individuals who share similar functions, disciplines, skills, and work processes

Three strengths
 1. Development of deep functional expertise and a high degree of specialization  2. Economies of Scope – easy to transfer resources across activities within functions
 3. Allows for creations of separate alignment systems each tailored to every function’s needs/strengths
Four weaknesses


1. Backward flows of information can be difficult due to sequential interdependence between functions (e.g. from marketing to eng) -> therefore not responsive to changes in consumers
 2. As specialization increases, individuals develop narrower perspectives  3. Difficult to assess costs
 4. Tendency to expand levels of management over time – this can inhibit efficient and effective info flows
 Frequently adopted by new businesses – maintained over time by organizations that have a single major business or share similar technologies across similar markets Grouping by Output/Product – organizes on basis of service/product provided


Two strengths
 1. Transparency of performance – costs/profits are clear of each function (business)
 2. Clear strategic focus – each business division head is responsible for profitability/growth of a complete “value chain”
 Four weaknesses
 1. Difficulty of sharing resources – lead to duplication of activities across business units
 2. New business creation difficult – business units focus on expanding their own business instead of finding new opportunities OR competing across units  3. Functional specialists are spread – can lose touch with innovation in own fields  4. Distributing activities across different units can lead to missed learning opportunities in core functions

 Structure associated with strategies that emphasize efficiency, where info on cost/profitability is crucial
Grouping by Market – gathers together people who perform different activities/tasks and produce different outputs but serve same customers/market



Two strengths
 1. Capacity for deep customer knowledge and close relationships  2. Tailor products/services to different needs
 Three weaknesses
 1. Duplication of activities/resources
 2. Erosion of deep technical expertise
 3. Missed opportunities for synergies and learning
 For strategies that are customer-focused (customers with different needs and tastes). Often in service industries
Matrix organization – picks two strategic grouping dimensions and gives them equal weight in org structure – each manager of each operating unit reports to two bosses – one for each dimension

 Strength: balancing two equally important grouping dimensions  Four weaknesses from complexity
 1. Confusion
 2. Higher costs
 3. Delays in decision making
 3. Heightened potential for conflict
Front/back structure – divided into two parts. “Front end” faces customer and organized by market – developing and producing products. “Back end” is organized by product – business units that include technology dev, production, logistics

Two Strengths
1. Close integration of tech development and production (back end) 2. Building deep customer knowledge and close relationships (front end) Three weaknesses
1. Fragmentation of technical expertise (back end)
2. Poor integration between market needs and tech development 3. Ensuring adequate integration/synergy between the front and back ends can be difficult
o Modular/Network structures – self organizing network. The subunits come together and cooperate to deliver a specific product or service. New development. Not much info in reading o Line – activities in the direct “value chain” providing products/services to customer o Staff – support activities (so finance, legal, HR, PR, IT) Linking – designing structures and processes to connect and coordinate organizational units and subunits whose tasks are interdependent but have been separated by strategic grouping decisions o Intensity of linking mechanisms is influenced by level of interdependence (pooled, sequential, reciprocal – the task interdependence earlier)

o Dotted line relationships – lower ranking person is formally responsible for supplying all relevant information to higher ranked person but that they have no formal authority over them beyond the information flow (“easy fix” for lack of horizontal information flow) o Liaison roles – assigning responsibility for coordination across groups to individuals  These people are conduits for info and expertise

 Primarily information-focused role
 Not a full-time responsibility but combined with other activities o Integrator roles – coordinate activities and decision processes  More of a general management role
 Have “carrots and sticks” to help their role
o Permanent cross-unit groups – formal mandate for representatives of different task/work groups to pool expertise and coordinate efforts to a certain product/client/market/problem. Often combined with other activities (not full-time assignment)

o Temporary cross-unit groups – like permanent groups, but project is the grouping dimension. Disband after the project. Heads of project teams play an integrator role o IT Systems – enhance support for linking and coordinating mechanisms – and even can be seen as own linking mechanisms

o Co-location – putting people and subunits that need to exchange information in the same location o Challenge in designing linking mechanisms – determining which add value and which do not Alignment – ensuring the units and individuals assigned certain tasks and activities by grouping and linking have the resources and motivation to carry them out

A common failure of organizational redesign efforts is a lack of organizational congruence – misaligned supporting systems and processes
o Performance measurement systems – system to indicate whether or not a design is effective based on its performance. Need to be designed so that they do not pull groups in incompatible directions that undercut linking

o Rewards and incentives – useful tool for changing behaviour.  Criteria for general principles:
 Incentives should link performance to pay and directly link performance to specific standards and objectives
 Rewards should relate directly to the nature of performance required at each level of the organization.
 Rewards should be directly linked to objectives that are within the group’s or individual’s power to control
 Incentive plans should match measurement periods for rewards to relevant performance plans
 One view – individuals oriented to material rewards
 Prone to “free ride” off others – can be unproductive without negative sanctions  Other view – most individuals want to do a good job
 Main challenge is to design reward system that doesn’t misalign rewards with requirements of org’s strategic intent – “perverse incentives” o Resource allocation – assessing adequacy of resource to carry out assigned tasks – very difficult to implement

o HR Development –Allocating resources of people as well as developing (training) and “creating” them (hiring)
Strategic organizational design process
o Disruption of flow of business – redesign efforts take up time and attention of managers and tie up organizational resources
 Information is not processed adequately – employees do not recognize the value of different kinds of info, how to interpret it, how to add value, or how to pass it on o Risk to LT relationships with customers/suppliers – they do not know who to talk to in the organization because of changing positions

o Stress – loss of continuity, departure of key people = damages core competencies of company. People worry about job loss
o Good design process (Nadler/Tushman)
 1. Those that emerge from consideration of widest possible range  2. Design process involves people who understand the organization  3. Developed with implementation in mind
 4. Making people responsible for making the change work feel as if were part of shaping the change
o Stimulus for change
 Response to growth – more products, broader range of customers, etc.  Internal problems – lack of coordination, excessive conflict, unclear roles, poor work flows, etc.
 Environmental changes (most frequent) from external business environment  Organization seen as “throughout-put” – takes inputs from environment, adds value through internal processes, and distributes to users outside the organization  Input-set – environment

 Output-set – market
 Shifts in the environment can change the design – organization must fit the environmental pressures
Understanding an organization
o 1. Know its strategy – what is the organization trying to accomplish? How does it differentiate itself? What does it do better than others?
o 2. Map its design
 What is the grouping structure?

 How are the units created by the structure linked?
 Are the basic systems aligned with each other? Do they positively reinforce each other?  Does the organization design fit the demands of its environment and of its strategy? Strategic organizational design process

o 1. Generate design criteria
o 2. Generate grouping alternatives
o 3. Evaluate grouping alternatives
o 4. Identify coordination requirements
o 5. Generate structural linking mechanisms
o 6. Evaluate structural linking mechanisms
o 7. Conduct impact analysis
o 8. Refine and eliminate designs
o 9. Identify issues for operational design and alignment
o 10. Identify issues for implementation


Political system – sees organization as a social system constructed as an arena for competition and conflict among individuals, groups, and other organizations whose interests and goals differ o Roots of conflict lie in different interests, disagreements requiring action, including negotiation, coalition building, exercise of power and influence

o Asks “Who’s defining the problem? What gives them the power to define it? Who’s advocating my solution and why? How can I get an outcome that serves the interests of me and my group? o Decisions must be political – have to have buy in of those with power to implement/block them Interests – what people want and what’s at stake for them o Assumption: people act rationally to serve their own interests (economic man) o Collective interests – those shared by others belonging to same group o Groups:

 Formal structure
 Demographic groups
 Division of labour
 Location
 Professional/occupational category
o Stakeholder perspective – identifies groups that have a share stake (i.e. set of collective interests)
o 1. Analyzing what interests are and what priority they have for individuals and collective actors  Multiple interests at same time – LT/ST, competing, autonomy/cooperation  Collectives also have multiple interests

 Therefore, the way decisions are made, they depend mostly on how key decision makers see and assign weight to their interests
 These interests are also dynamic – they change
 Can be latent – do not realize they exist until an event happens  To carry out an action, one must understand what interests will be affected by it Power – ability to affect behaviour of other people

o 1. Influence – someone does not have formal authority but has ability to persuade others. Legitimate
o 2. Authority – legitimate and decreed upon by organizational hierarchy/formal positions o 3. Coercion – domination – not considered very legitimate. Breeds resentment. Basically punishing someone

o Sources of power:
 Personal characteristics – charisma – gift of grace. Emotional connection between leader and followers. Unstable, requires constant proofs, difficult to transfer  Energy
 Focus

 Sensitivity to others and ability to understand how they see interests  Flexibility
 Ability to tolerate conflict
 Submerging one’s ego and getting along
 Willingness to engage in conflict to further one’s actions is a source of power  Scarce or valued expertise
 Past performance/track record
 People believe can cultivate future relationships with “high fliers”  Formal position
 Provides guide to resource allocation, info flows, evaluation of employee performance, task assignments, conflict resolution
 Proximity of subunit to head of organization – greater the power  Informal network position
 Size of network and position in network is crucial
 Centrality – how many links you are between powerful individuals within a network
 Network clusters are better and more efficient than redundant interconnected, tightly knit networks
 Network position is a great source of influence for 2 reasons o 1. Info advantage in can confer
o 2. Potential for coalitions
 Holes in an organizational network where there is no direct link between subunits that could benefit from being linked – structural holes
o Someone who bridges these wholes has power because he has
disproportionate say since he has contact with both
 Many social networks: task-related networks, friendship networks, advice networks o How to identify where power resides in an organization:
 Reputation – ask people who has power in the org
 Representational indicators – which groups’ interests are over repped  Observation of consequences – which groups benefit most from resource allocation  Symbols of power
o Sources of power: Personal characteristics, scare & valued expertise, track record/contribution to org. performance, formal position in org. hierarchy, informal network position Using political lens to take action:

o 1. Map interests and power
 1. Supporters – whose cooperation do you need
 2. Blockers – whose opposition could hold you up
 3. Potential stakeholders – who will be affected
 4. Existing coalitions – who are the friends/allies of potential supports/blockers and what are their collective interests
 This provides guidance on a) how to convince key stakeholders that your initiative serves them, and b) how to tailor your initiative so that incorporates key stakeholders o 2. Getting buy-in – getting people to commit to action

 Escalation of commitment – people are more likely to commit to something that they have already invested resources into
 Publically made – less likely to back in
 More resources = more commitment
 Giving stakeholders chance to provide feedback – illusion of influence – feeling that they have some effect on the group
 Risk: having potential supporter back out
o 3. Finding allies & building coalition
 Set of allies who act together to support certain policies/activities  Long-term can be a general coalition to provide reciprocal support for each other’s interests
 Dominant coalition – upper management acting together in their interests



 Idea of reciprocity mostly
4. Building a network
 Built on reciprocity (I do for you, you do for me), and trust. Have values, i.e. currencies:  Rewards-related
 Task-related
 Relationship-related
 Status-related
 Key to establish trust to overcome initial barrier and begin with reciprocity  Maintaining relationships are a crucial time sink – may take up to 80% of managers’ time  Choose type of network to maintain

5. Building negotiation skills


Cultural perspective focuses on social and personal identities carried by people. Cultural understandings are collectively shaped and rooted in the past
o Limitations of managers, structural authority, influence, and rationality best describe human behaviour
o Emphasis that people must learn these things to be fully functioning members of org Schien’s model of culture:
o Pyramid going from top to bottom:
o 1. Artifacts/behaviours (symbols) – what you observe
o 2. Espoused values – what you are told (normative)
o 3. Basic assumptions – what participants take for granted (cognitive) Centrality of symbolism – meanings guide behaviour. Key is that symbols influence people to act in certain ways
o Vehicle for meaning – notions of personal identification o Denotative meaning – direct and instrumental use of symbol o Connotative meaning - expressive and general uses of symbol o 4 domains of symbols to examine for interpretation:

 1. Symbols are cultural objects whose artifacts can be categorized  2. Produced and use by people and groups within orgs for certain purposes – the intentions of symbols creators and users must be understood

 3. Have a historical period and social context that shapes it  4. Mean different things to different people so effect of them on different people must be examined
 This is at heart of cultural perspective of orgs
 Part of all aspect of the organization
 Leadership itself can be seen as symbolic action
 Symbolism is the elementary process to make org behaviour possible and meaningful
Culture broken down into cultural products and cultural processes o Cultural products: tangible social constructions that are explicitly produced o Cultural processes: more general, implicit features of social life that underlie and prefigure cultural products

o Distinguish between structure and culture
 Structure represents institutional conditions that characterize a given society  Culture represents the values, beliefs, norms, etc. to societal culture  As culture shifts so does structure. Reverse is true as well. With without the other is incomplete and fails

o Taking a cultural perspective involves considering the historically grounded pattern of meanings that guide a group
Organizational culture – business orgs and social systems where people must do things together o Orgs are within and across cultures and even generate their own culture




Culture and control
 Coercive theories say that to get people to do things, management must hold a whip above them
 Exchange theories say that most people work for tangible rewards like money  Over time, orgs develop own standards for appropriate behaviours  So shunned if over produce or under produce – interests of the group can differ from org’s interests

 Creation of competing cultural norms with managerial ideals has few possible solutions:  1. Alter organizational structure and hope culture will follow  2. Create preferred org culture directly by recruitment, selection, training, placement, and long-term career development

 3. Promote conceptual models of thought and action for employees to follow  Stories play important role
 Censorship is impossible when people keep talking
 Important for managers to pay attention in day-to-day dealings Subculture and segmentation
 Subcultures are group of people who share common identities based on characteristics that override their org roles/relationships
 Divisions can include:
 Management/labour
 Occupational interests
 Education backgrounds
 In general, subculture emphasizes segmentalist model of org culture  Common occurrence – shift over time and with environmental changes. This can lead to changing loyalties
Organizations and cultural context
 There is a trend both in theory and practice that cross-cultural relationships between orgs is happening
 Gradual change from environment will influence employees  Working internationally, for example, means that have to understand basics of another culture and its nuances
 Colliding meanings – words/actions/gestures with multiple meanings across cultures


Questions to ask for Strategic Lens
o What is the strategy of org as a whole? How well is it understood and implemented by members at various levels?
o What is basis for formal grouping structure? Are the roles and responsibilities clearly defined and understood? On what activities does the structure focus attention? o What other units does any one unit need to interact regularly to carry out assigned activities? Are adequate linking mechanisms in place?

o How is performance of org and members being measured? What are the incentive systems and are they effective?
o Do people have the resources and motivation they need to carry out their tasks? What are the barriers getting in the way?
Questions to ask for Political Lens
o Who has power and status? What is the basis of their influence? Is power concentrated or are the multiple power centres?
o What are the key arenas of conflict? Who are the key actors and what are the causes for disagreement? What are the interests of the key actors?
o What, if any mechanisms of conflict resolution exist, and how effective are they? o Who benefits most from the current patterns in the organization and why?

Who gets credit in the organization when things are going well? Who gets blamed when they are not? Do those who get blamed have the power to make changes that will improve performance? o How well does info about problems move up hierarchy? How open are those in positions of formal authority to suggestions from below?

Questions to ask for Cultural Lens
o What artifacts, stories, symbols, and observed behaviours provide important clues to the culture of the org? How much uniformity is there?
o What are the espoused values of the org and how are they transmitted? How widely? o Are there any inconsistencies between behaviour observed and espoused values? o What are the basic assumptions in people, actions, and inconsistencies? o Do those at the top have the same perceptions and beliefs as those at the bottom? Do different units or groups share these or are there significant differences?

o What message are those at the top of the organization hearing from those in positions of authority? How are they interpreting them?
o Who is identified as a good manager/worker? What does this reveal about basic cultural assumptions?
o What is the emotional atmosphere in the organization?
Effective action steps
o Specific and concrete
o Comprehensive
o Effective on all 3 lenses
o Consistent with your analysis


Team has variety of definitions, changing today too with virtual world Internal processes of a team: how they coordinate activities, make decisions, allocates tasks, develop trust, and develop shared identity -> critical to team

o Organizational context has a very important influence on processes 3 lenses on team structures/processes
o Strategic
 Grouping/linking/aligning mechanisms –what are they and how effective are they o Political
 Influence structure, interests, conflict, and decision making o Cultural
 Identities, values, norms, habits as a team, and possible existence of subcultures o Identifying the problems faced is the first step in addressing them  First resort is to improve strategic design

 Strategic design and culture can interact in setting generally agreed upon rules which become norms
 Strategic design and political system can interact in changing decision making process to change level of voice of individuals on the team
3 lenses on teams in organizations
o Organizational context of the teams and how it affects the team’s composition, internal processes, and effectiveness
o Gratton (Faultlines)
 Teams have to bridge strong subcultures that are rooted in and reinforced by external organization
 Basically large focus on relationship building across differences  “The internal dynamics of the team are affected by the political and cultural subgroups in the organization that are represented on the team.”

o Ancona et. all (X-Teams)
 Continue to interact with organization around them after formation  Strategic
 Organization contains resources that the team needs: information + expertise + facilities
 Political
 Organization is a set of stakeholders who have a stake/interest in team’s activities  Cultural
 Organization holds basic assumptions and what a good team process is, leader, how teams perform, and if it violates them, it may be seen as a “failure” regardless of output
 Effective team manages all three lenses of organizational environment  Scouts to ensure has all info + expertise
 Develops processes for continuous interaction with stakeholders  Actively shapes how it is perceived


3 paradigms of diversity:
o Discrimination and fairness paradigm
 Dominant way of understanding diversity

Prejudice has kept members of demographics out of organizations. As a matter of fairness/federal laws, need to restructure makeup of organization to let it more closely reflect society. Need managerial processes that ensure all employees are treated fairly and no unfair advantage

 Basically beyond affirmative action
 Many bureaucratic, rigid companies use it
 Progress measured by how well company achieves its recruitment and retention goals rather than degree to which conditions in company allow employees to draw on their personal perspectives
 Limitations:
 Color-blind, general blind ideal is built on the assumption that “we are all the same.”
 Pressure to make sure that differences do not count
o Access and legitimacy paradigm
 Acceptance and celebration of differences
 Living in increasingly multicultural country. Needs a demographically more diverse workforce to gain access to differentiated market segments. Multilingual. Diversity isn’t just fair, it makes business sense

 Many consumer companies that have used market segmentation based on gender, racial, and other demographic differences have frequently used this type  Pros: market-based motivation helps entire company understand and get behind  Cons: tend to emphasize role of cultural differences in a company without analyzing those differences to understand them – people feel like their demographic is being used o Learning and effectiveness paradigm

 Draw upon cultural background – incorporate employees’ perspectives into main work of organization and enhance their work by rethinking primary tasks and redefine components
 Differentiation in which objective is to place different people where their demographic characteristics match those of important constituents and markets  Integration
 “We are all on the same team, with our differences – not despite them” o 8 preconditions to making the paradigm shift to learning and effectiveness  1. Leadership must understand that diverse workforce embodies different perspectives and approaches to work

 2. Leadership recognize both the learning opportunities and challenges that expression of diversity presents for an organization
 3. Organizational culture must create exception of high standards of performance from everyone
 4. Organizational culture must stimulate personal development  5. Organizational culture must encourage openness
 6. Culture must make workers feel valued
 7. Organization must have a well-articulated and widely understood mission  8. Organization must have an egalitarian, non-bureaucratic structure Sociological differences
o Life cycle effects – people at different stages in life have different attitudes, interests, identities o Cohort effects – people born in different times are shaped by different historical effects, technologies, social and economic forces


Manager: someone who has people reporting to him/her
Shifts in trends in employment
o More part-time and contingency employees, outsourcing, etc. Stable employment falling 3 lenses:

Strategic perspective
 Employees are resources
 Assets to be used in value adding process that delivers on organization’s strategy  Costs
 Balancing investment in employees and cost control is the strategic design challenge of workforce management
 Assignment of formal roles and responsibilities and alignment systems are key tools in workforce management
o Political perspective
 Employees are stakeholders
 Interest in fate of organization and benefit from organizations’ success  The size and nature of their interest can vary considerably due to diverse interests  Balancing empowerment and control is a key political challenge  Use of political strategies can work for managers –but it is important to remember that strategic design tools can be used for political ends

 Employees can use political strategies to resist or to influence workforce management practices
 Unions and informal employee networking groups are examples o Cultural perspective
 Cultural challenge is balancing the overall organizational culture with the formation of subcultures
 Subcultures have norms and assumptions that can differ from those of the organization as a whole
 Can be congruent with overall culture or subversive of it Forced ranking systems
o Firms
 Pros
 Reduces effects of managerial reluctance to rate employees badly  Reduces ambiguity
 Identifies candidates for promotion
 Identifies low performers
 Encourages excellence
 Cons
 Limits managerial discretion
 Managers can thwart system by rotating best rankings
 May identify wrong candidates for promotion
 Adversely affects team morale
 May promote political contests
o Individuals
 Pros
 High performers get greater rewards
 Potential for more accurate/useful feedback
 Cons
 Damaged personal relationships
 Difficult to get ahead once at low level
 Focus is on past performance
 Vulnerability to measurement errors
Gist of reading (most of it common sense – flexibility in work, changing employment security, work advancement, etc.)
o Mismatch of practices – teamwork/downsizing don’t go well together o Legitimacy of practice to multiple stakeholders – some people will feel please/motivated, and some will feel cheated if changes to shape of career paths happen o Increased need for creative thinking to get work done



Strong pressure to change in organizations recently
Population ecology paradigm – assumption that organizations faced formidable internal and external constraints on change that any major transformation could occur only through replacement of one kind of organizational form by another

Why is change so difficult?
o Human nature – resistance to change is basic feature
o Organizational inertia – organization, by definition, are designed to produce predictable and repeatable outputs. Therefore stability is an inherent feature maintained by organizational systems and cultures. Resistance to change is embedded in the nature of organizations o Unanticipated consequences – changes even in simplest organizational design can have effect on other parts of the design that are difficult to predict since organizations are complex social structures

Types of change (3 lenses)
o Structural – typical one people think of. Changes in grouping, linking, aligning o Power structure – changes in who makes decisions, which individuals and groups influence decisions, and what interests are served by actions

 Most commonly seen after mergers and acquisitions
o Cultural – changes in norms, values, mental models, shared assumptions about organization  Changing not only people’s behaviors, but ways they think about activities and their own roles/identities

Problems in structural changes
o Unanticipated consequences
o Figuring out how to allocate costs across units, allocating clear responsibilities o Challenge of learning new roles
o Middle managers often find that their roles are least clear in new designs Problems in political changes
o Exert a strong influence on anyone who joins on them (if powerful) o Subunits resist anyone who takes over the unit but does not defend subunit interests/identity o Resistance from managers who have knowledge that is essential Problems in cultural change

o Very difficult because needs to change deeply embedded values o Established subcultures prevent change
Stage models of change
o Lewin’s (unfreezing – change – refreezing)
 Organizational inertia creates state of quasi-equilibrium  To succeed in change, must disrupt the equilibrium (unfreezing)  Create new equilibrium state that maintains new conditions (refreezing)  Unfreezing most successful if directed to reducing forces that block change rather than increasing forces for change

o Beckhard and Harris
 Change focuses on the future state of organization
 Effective change requires both diagnosis of present state and proactive management of transition state
 Many change initiatives fail because of erroneous assumptions about how organization currently operates, who will be affected by the change, attitudes toward the change, and capacity to change under time frame

o Tichy and Devanna – transformational leader
 Act I: Recognizing need for revitalization
 Act II: creating new vision
 Act III: institutionalizing change
o Evolutionary model – variation-selection-retention
 Variation may be frequent, but short-lived

If a local innovation is picked up and tried elsewhere in the organization, it is recognized as successful and retained
 1. Organizational inertia is not the same as lack of change  2. Model shows systemic forces that shape of fate of change initiatives  3. Change is not always planned changed initiatives by top-management o Senge (challenges in the 3 stages of change)

 Initiating the change – no time, help, relevance, walking the talk  Sustaining change – fear/anxiety, assessment, believers  Redesigning and rethinking – governance, diffusion, strategy and purpose Dimensions of change

o Scope of change – radical to incremental
o Pacing of change – punctuated to continuous
o Source of change – top-down to bottom-up
o Process of change – planned to emergent
o Radical change is very difficult and usually triggered by change in strategy or major crisis  Often need period of stability after one radical change before the next  Easier to win support if clear plan

 Undoes a lot of previous changes
o Top down approach
 Pros
 Speed – crisis
 Leadership – signal of who is in command
 Focus – resources used effectively
 Control – tight focus, no surprises
 Cons
 Lack of ownership and choice in subunits
 Threat rigidity – defensiveness
o Bottom-up approach
 Pros
 Helps create buy-in and commitment
 Slower speed is more conductive to working within political/cultural dimensions
 Less controlled processes may generate more innovative, unanticipated solutions
 Cons
 Fast speed is often out of sync with temporal patterns of culture and politics  Tight focus may increase efficiency at the cost of innovation  Runs the risk of being too slow
 May signal lack of top management leadership
 Potentially more expensive process
 Emergent nature may generate loss of focus, waste of time/resources Good action step
o Feasible
o Action, not an aspiration
o Considers consequences of action
o Works on all three perspectives


External environment – potentially everything outside organization’s boundaries that could affect it Strategic lens – sees a resource environment composed of organization that supply inputs, compete for input and output markets, and have formal power to regulate

o Takes inputs, adds values, sells output

Mapping – focuses on organizations and other social actors that populate it and engage in transactions
 Designing relationships and interactions that efficiently and effectively enable the organization to achieve its goals
 Organization-set model – maps environment in terms of input-set and output-set  Regulatory-set also mapped
 Competitors also mapped
o Have to be alert in changes of environment which they deal in o Improve relationships and interactions that help strategic goals of the organization o Traditional models tried to shield from uncertainties/instability  Distancing mechanisms (buffering, stockpiling of inventory, etc.) o New model – internal activities are more linked to important elements of organization-set  Tools used for managing networks with external actors are grouping, linking, and alignment Political lens – environment as set of stakeholders that have own interests to serve and stake in organization’s actions

o Key variables that analyses focus on
 Interests
 Power and influence
o Draws attention to how internal stakeholders can involve external stakeholders in organizational decisions/actions (same for when external stakeholder wants to influence an organization)
 Mobilization of interests of external stakeholders
 Coalition-building between internal and external stakeholders  Cooption as one stakeholder gets others to accept its own agenda through persuasion or other coercive means
o In general external stakeholders have a lower stake in the organization than do internal but have potential influence
 Stake held can be involved in a number of specific interests which may have differing priorities at different times
Cultural lens – institutional environment of values, norms, shared beliefs, and perceptions o Set of “rules of the game” that are shared across organizations occupying the same social space o Companies act on widely shared beliefs about what makes an organization successful that lead them to accepted recipes and therefore become similar, rather than distinctive  Developed institutional field to analyze this environment o Institutional field – those organizations that, in aggregate, constitute recognized area of institutional life (suppliers, consumers, regulatory agencies, competitors). o Social reference group – social actors who act as reference set for organization – measure performance and status of who serve as models of best practice o Press also has an important impact – it is important how an organization is seen and evaluated by external actors and the public – powerful effect on commitment and motivation even on employees

o Institutionalization – process by which certain organizational patterns become accepted as legitimate
 Isomorphism – structural similarity
 Coercive isomorphism – government regulates procedures  Normative isomorphism – professional groups decide the “right” way to do things  Mimetic isomorphism – most common, imitation of what’s successful o Set of tools for changing the institutional field

 Appealing to interests of key internal and external stakeholders  Invoking the example of social reference group in form of admired organizations  An action can be strengthened by attracting attention of external structuring agencies (reporters/media/rankings/etc.)

o National culture models exist basically – culture’s different across countries o


Today growing pressure for CSR to be a strategic priority
Environment is exerting pressure on companies by defining and framing the specific commitments that CSR entails
Companies frame CSR in cultural and strategic design terms
Business case for CSR
o Reputation risk – cost of losing reputation
 License to operate – access and acceptance of company in community it operates in  Company with a high reputation may face reputation-reality gap – strong confidence that top executives have in ethical level of operations is not justified (Google, Nike) o Potential cost savings/revenue improvement

 Improvement in labour conditions to productivity improvements for example Alliances with NGOs
o Engage them in providing feedback. Giving them a stake in the performance of the company Building responsible company
o Subunits and departments whose activities are important for CSR already exist (mostly) o Improving linking mechanisms, assigning special roles, etc. o Important is that metrics and measurement are strong and that there are no misaligned incentives o Politically, needs to have a strong influence – e.g. if CEO commits, stronger than if no comment  Staffing from outside of company does not help internal politics  Mobilization of interests of managers important

o Culturally, most difficult to change habits
 CSR soft and CSR hard-nosed subcultures
 Can take time to move from coexistence to integrated culture with CSR  External environment plays a big role here in positive reinforcement of growth of CSR

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