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Organizational Design, Development and Change

ASSIGNMENT SOLUTIONS GUIDE (2013-2014)
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Q. 1. Briefly describe the factors which affect organizational design and explain the four approaches in assessing organizational effectiveness. Ans. Many factors affect the choice of an appropriate structure for an organization; the five factors are most common: size, life cycle, strategy, environment and technology. 1. Organizational size: As the organization becomes large, its structure also becomes more complicated. When an organization is small the structure would be simpler. As an organization grows, it becomes increasingly difficult to manage without more formal work assignments and some delegation of authority. Thus, large organizations develop formal structures. Tasks are highly specialized and detailed rules and guidelines. The type of structure that develops provides the organization with the ability to operate effectively. This is the only reason, whey the larger organizations are often mechanistic. 2. Organizations life cycle: Organizations, like humans tend to progress through stages known as a life cycle. Like humans, most organizations go through following four stages: (a) Birth: At an initial stage i.e. birth stage an organization does not have a formal structure. (b) Youth: In this phase, the organization starts to grow. The emphasis in this stage is on becoming larger. The company shifts its attention from the wishes of the founder to the wishes of the customer. The organization becomes more organic in structure during this phase. (c) Midlife: This phase occurs when the organization has achieved a high level of success. An organization in midlife is larger with a complex and increasingly formal structure. More levels appear in the chain of command. As the organization becomes older, it may also become more mechanistic in structure. (b) Maturity: Once a firm reached at the maturity phase, it tends to become less innovative, less interested in expanding and more interested in maintaining itself in a stable environment. Organizations in this stage are slowly dying.

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3. Strategy: An organization how is going to position itself in the market in terms of its product is known as its strategy. A company may decide to be always the first on the market with the newest and best product or it may decide that it will produce a product already in the market more efficiently. Each of these strategies requires a structure that helps the organization reach its objectives i.e. the structure must fit the strategy. Companies that want to be on the top in the market with the newest and best product probably are organic, because organic structure permits organizations to respond quickly to changes. 4. Environment: The environment is the world in which the organizations operate and includes conditions that influence the organization such as economic, social cultural, legal political, technological and natural environment conditions. Environment can be described as stable or dynamic. (a) Stable environment: In stable environment the customers desires remain consistent for a relatively long time. (b) Dynamic environment: In a dynamic environment, the customers desires keeps changing. In this environment, the technology, that a company uses need to be continuously improved and updated. In general, organizations that operate in stable external environment provide a level of efficiency that enhances the long-term performances of organizations that enjoy relatively stable operating environments. In contrast, organizations that operate in dynamic environment allow the organization to respond to environment change more proactively. 5. Technology: Technology is the main cause of change in organizations because they generally result in greater efficiency and lower costs for the firm. Technology consists of tools, equipment and techniques. Joan Woodward in the early 1960s, found that the right combination of structure and technology were critical to organizational success. She conducted a study of technology and structure in various firms. She classified three categories of coremanufacturing technology: small batch production, mass production and continuous process production. Small Batch Production: It is used to manufacture various custom goods. Each item is made somewhat differently to meet a customers specifications. Mass Production: It is used to create a large number of uniform goods in an assemblyline system. Workers are highly dependent on one another as the product passes from different stages. Continuous Process Production: The organizations using this type of technology create goods by continuously feeding raw materials, such as liquid, solids and gases. Such systems are equipment intensive. Woodward discovered that small batch and continuous processes had more flexible structures. The small batch and continuous processes work well in organic structures and mass production operations work best in mechanistic structures. Q. 2. Describe and discuss different perspectives of organization design and their relevance. Explain different restructuring strategies. Ans. Organization design is a formal, guided process that incorporates people, information and technology of an organization. It is used to match the form of the organization to

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achieve the objectives of the organization. The universal perspective of an organization design consists of: the bureaucratic model; the behavioural model; and the contingency perspective: The Bureaucratic Model: Max Weber, a German sociologist, has provided an idea of bureaucracy. A bureaucracy is a form of organizational structure in which people can be held fully accountable for their actions because they are required to act in accordance with rules and standard operating procedures. Basic Elements of the Bureaucratic Structure are: Formal rules and behaviour rules Uniformity of operations Functional division of labour based on functional specialization Rational allocation of tasks Impersonal orientation Promotion based on technical competence Limited discretion of officers Legally based tenure Employment based on merit Qualifications tested Proscribed authority-legally defined The Behavioural Model: This model has developed from the Human Relations School of Management thought. In this model the performance of an organization is believed to depend on human beings, their behaviour, characteristics and their mutual relationships emerging from work patterns and organizational settings. The important factors are needs, motivations, attitudes, values, leadership, group behaviour, perceptions, communications, responsibility and authority relationship, etc. The behavioural models of organization design indicate the social and psychological implications of organizational life. The most popular behavioural models of organization design- the socio-technical systems theory and Likerts System 4 Organization. Socio-technical Systems Theory: Socio-technical system theory in organizational development is an approach to complex organizational work design that recognizes the interaction between people and technology. It refers to the interaction between societys complex infrastructures and human behaviour. It is a theory about the social aspects of people and society and technical aspects of machines and technology. It refers to interrelated social and technical aspects of an organization. Likerts System 4 Organization: System 4 is emphasized by Rensis Likert. He used a psychological analysis of organizations and conducted extensive research using questionnaires. The four basic systems of organization Likert outlined are: System 1: Exploitive Authoritative: In this type of management system the job of employees is abided by the decisions made by managers. The employees do not participate in decision making. The organization is concerned with completing the work only. The organization uses fear and threats to get the work done from employees.

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System 2: Benevolent Authoritative System: In this system, employees are motivated through rewards rather than fear and threats. Information may flow from subordinates to managers. Same like system 1, decisions are also made by the top management. System 3: Consultative System: In this type of management system, subordinates are motivated by rewards and a degree of involvement in the decision-making process. There is a greater flow of information from subordinate to management. System 4: Participative System: In this type of system, management has faith in their employees. Subordinates express their opinions and do teamwork. Teams are linked together by people who are members of more than one team. Contingency Perspective: The contingency approach to organizational design tailors organizational structure to the sources of uncertainty facing an organization. The structure is designed to respond to various contingencies things that might happen and therefore must be planned. According to Contingency Theory, the structure of an organization depends on the circumstances at any given time. The key contingency factors include: Strategy External environment Technology, and Size Strategy: An organizations strategy refers to the objectives of an organization and provides different ways to attain these objectives. The strategic planning is an organizations process of defining its strategy or direction and making decisions. Strategic planning is the formal consideration of an organizations future. External environment: The organization and the environment are not closed systems because they influence each other. The organization cannot be successful if it is not in step with its environment. Thus, it is surrounded by two types of environment: general environment and task environment. A number of factors are influenced in general environment such as: economic, socio-cultural forces, political forces, labour unions, customers and competitors. The socio-cultural environment is concerned with the societys attitudes and cultural values. The technological environment also has a bearing on the conduct of the organization. Technological changes affect many aspects of society and the organization. Moreover, Burns and Stalker discovered that there are two forms of environments: a stable environment and an unstable environment. A stable environment remains constant whereas an unstable environment keeps changing. Technology: Technology is the usage and knowledge of tools, techniques or methods of organization for producing things. Technologies significantly affect human ability to control and adapt their natural environments. Technology has affected society and its surroundings in a number of ways. In many societies, technology has helped develop advanced economies. It can be most broadly defined as the entities, both material and immaterial, created by the application of mental and physical effort in order to achieve some value. Size: Organizations have different sizes. Large organizations have different structural design as compare to small organizations. Small organizations have very few specializa-

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tions, rules and procedures, narrow span of control and informal decision process. Large organizations have enlarged specialization, formal decision process and wide rules and procedures. RESTRUCTURING STRATEGIES There is a relationship between organization development strategies and structure. It is shown in the following table: Strategies of Organizational Development Organizational growth Organizational growth is increased by vertical differentiation by growing number of jobs and departments. Increasing delegation in administration. Specialization and divisionalization increased. Increasing formalization by the way of planning, resource allocation procedures. Specialized professional staff increased. Establishing new roles of staff. Increased delegation. Structural Changes

Growth via diversification

Technological development

Obtaining a secure domain

Improving managerial techniques by It is depending on the methods adopted. enhancing flexibility The above mentioned strategies are mutually exclusive. Growth is possible only by increasing volume of operations and required different approaches. The level of diversification depends on the companys share, technological synergy, regulations and management capacity. Q. 3. Describe and discuss the trends in the present day work organisations and the role of Management in quality of work life. Ans. Emerging Trends in Work Organizations Organizations have entered a new era characterized by rapid, dramatic and turbulent changes. These changes have transformed how work is performed by employees in diverse organizations. Several emerging trends are impacting organizational life. Like globalization, diversity, flexibility, flat and networks. Organizations operate in a global economy that is characterized by greater competition, greater economic interdependence and collaboration. To stay competitive, more organizations are accepting offshore outsourcing. Most of the companies whether in manufacturing or services, can find some part of its work that can be done off-site. One major consequence of globalization is greater mobility in international capital and labour markets. This creates more opportunities because there are more potential customers. Globalization is causing a rapid increase in diversity in organizations. Organizations with greater diversity can understand and penetrate wider and enhanced markets. Globalization and diversity trends are forcing organizations to become more flexible and adaptable.

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Companies design their work systems in four domains: virtual organization, flexible and adaptive workforce, contingent pay and democratic governance. I. Job Insecurity and Work Intensification: Work intensification is the process of raising the expected workload of an employee by increasing the amount of tasks to be undertaken. It can arise because businesses are under pressure to increase their return on assets or to balance an increase in labour costs. Job insecurity is a condition in which employees lack the assurance that their jobs will remain stable. It has grown significantly since the mid 1980s. Job insecurity can be experienced with different degrees of intensity. If one is confident of being able to find other work, being made redundant can be unpleasant. But, if one is not confident about the prospects of re-employment, feelings of insecurity can be very intense and damaging to well-being. Insecurity is also related to the prevailing climate of restructuring, delaying etc. II. Flexibilization and Casualization: Flexibilization represents flexible working patterns. Employees dont protest to flexible hours and working but it aggravates opposition. Flexibilization let employees to spend more time with their families. But working class people in bind alley jobs dont like flexibilization. They claim it as a high labour turnover, absence, low commitment and poor performance. According to Shirley Dex and Fiona Scheibl, flexible working arrangements are common in small organization. They divide the employer in three groups: holistic, selective and resistant. Moreover, the UK Government introduced a campaign, called Work Life Balance. This campaign was to help employees to recognize the benefits to adopt flexible working patterns. This help employee to become more productive and better motivated. Casualization is a way that shows the strength of employees introducing zero hour contracts, when there is no assurance of work and employees are permanently on standby. It is benefitted to employees as the employees have no right under any law. III. Macdonaldization: Macdonaldization is a modern approach of Taylorism. It is a process of rationalization that results in an efficient, logical sequence of methods that can be used to complete a given task in a controlled way. It is a process to producing goods and services where work process is divided into small parts, systematically analyzed to maximize profit and repetitive task that produce goods. IV. Commodification: Commodification is the transformation of goods and services into a commodity. It is used to describe the process by which something which does not have an economic value. Karl Marx focused on the commodification of the labour process where activity of labour by individual workers was transformed into conceptual labour. V. Rescheduling Working Arrangements: Various alternative ways are available of scheduling the work in days and hours. The working arrangements are reshaping the traditional schedules. These arrangements help employees balance work with their non-work responsibilities and activities. Compressed Work Week: Compressed works week also known as a flex schedule that gives benefit of an extra day off by allowing finishing usual number of working hours in fewer

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days. Work for 10-hour days each week with one day off with a 4/40 schedule, or work 80 hours in nine days with an extra day off every other week. Compressed work week reduce the commuting costs. The organizations also get benefitted in terms of reducing energy consumption during 3 day shutdown, improving system of hiring new employees and extra time available for building and equipment maintenance. Part-Time Work: The concept of part time work is increasing rapidly in modern era. Part time work can be classified as temporary part time work and permanent part time work. In temporary part time work, employee is classified as temporary and works less than the standard i.e. 40 hour works week. In permanent part time work employee is classified as permanent but he works lesser hours that the standard workweek. Organizations usually hire part time workers to hold on the labour costs. Job Sharing: Job sharing is one alternative work option. It splits the full time work between two or more people according to a schedule. Two people share the same position in a company, each working a part of the week. Telecommuting: Tele-commuting is a work arrangement in which employees enjoy flexibility in working location and hours. In other words, the daily commute to a central place of work is replaced by telecommunication links. Telework is a term that refers to substituting tele-communication for any form of work related travel and eliminating the distance restrictions of telecommuting. Telecommuting offers benefits to communities, employers and employees. For communities, telecommuting can offer fuller employment, reduces traffic congestion, saves fuel, reduces energy use, and relieves the strain on transportation infrastructure. For companies, telecommuting expands the talent pool, reduces the spread of illness, reduces costs, and increases productivity. For employees, telecommuting improves worklife balance, reduces fuel usage, frees up the equivalent of 15 to 25 work days a year. Call Centres: Call centre is a centralized office used for the purpose of receiving and transmitting requests by telephone. A call centre is operated by a company to administer incoming product support or information inquiries from customers. Outgoing calls for telemarketing, clientele, product services and debt collection are also made. It is often operated through an extensive open workspace for agents with work stations that include a computer for each worker, a telephone set connected to a telecom switch. Most major businesses use call centres to interact with their customers. VI. Growing Relevance of Knowledge Work: The importance of knowledge work is being increasing nowadays. The nature of knowledge work is different from the traditional industrial work. Charles Despres and Jean-Marie Hiltrop have defined following difference between knowledge Work and traditional work: The Role of the Management in QWL: Management plays a vital role in improving QWL. Management has to try to make the quality of employees work life satisfied. Management has to take following steps in improving QWL: Set-up appropriate work rules which can help to create and maintain pleasant ambiance in which employees can work effectively. Creating an atmosphere where employees can deal with nobility and admiration.

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 Promoting open communication among employees. Developing flexible work policies and procedures. Ensuring that employees should behave as a professional. Provide training to managers and supervisors on work life matters. Provide free assistance to employees through Employee Assistance Programme, confidential counseling to resolve personal problems. Provide referral service to resolve personal problems. Provide services in order to support employee health. Treating employees fairly and ensure all of them follow the same rules and regulations. Provide personal accountability training for staff. Provide quality of work life programmes in eldercare, childcare, social inclusiveness etc. How to Measure QWL? In an organization following listing is used to measure the quality of work life: Job Involvement: It represents the extent to which an individual is personally involved with his work role. Usually, individual spends more time and energy in a job. People with high involvement are more productive and better motivated as compare to lesser involvement in job. Skill variety, achievement and challenge help to improving job involvement. Job Satisfaction: Job satisfaction defined as a pleasurable emotional state resulting from the appraisal of ones job. It is ones feeling or state of mind regarding the nature of their work. Job satisfaction can be influenced by a variety of factors like quality of relationship with supervisor, quality of the physical environment in which work is performing and the degree of fulfillment in their work. Sense of Competence: Sense of competence states the confidence which an individual has. Job involvement and sense of competence supports each other. The more an individual engage himself in a work has more competence. This way he becomes more motivated. Job performance: Job performance is based on job involvement, job satisfaction and sense of competence. As an individuals job involvement, job satisfaction and sense of competence rises, job performance also rise. Productivity: Productivity is a measure of output from a production process, per unit of input. As the job performance increases, the output per unit also increases. Thus, job characteristics and productivity indicates in higher productivity. The Effect of Quality Work Life: The following are the positive aspects of QWL: Develop communication and co-ordination among the workers and organization provide help to incorporate different jobs for better work performance. Improved working environment that enhances workers motivation to work in a healthy atmosphere. QWL contains group discussions, skill improvement, enhancing capabilities and building confidence that results in increasing output.

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Helps in increasing productivity. Provide employees work life balance. It attracts genius employees to make them devoted towards the organization. Making employees appreciated. Reduced frequent absence of employees. Gain the reputation of being a preferred employer. Keep hold of valued employees. Conditions for Successful QWL Programmes: The following conditions are required for successful QWL programmes: Strong leadership. Shared acknowledgement for change. Allocating adequate resources to manage the changes. Introducing third party to providing new ideas and help to eliminating disbeliefs. A mutual planning for change. Q. 4. What is Organisational Diagnosis? Discuss the importance of it. Briefly discuss interview as a method for organisational analysis. Ans. The structure and functions of organizations are somehow related to the structure and functions of human system. An organization is structured with various subsystems. Human subsystems depend on the ingredient parts. If human system gets into a trouble due to some problem in a part, his problem gets diagnosis by a doctor. Doctor examines the entire system by taking some medical tests. But, when an organization faces some problem, an organizational specialist tries to analyze the system. The only difference between a human system and organization system is that human organism normally functions as a whole because it has a mind, whereas an organization contains several parts having own independent minds. Even if there are no problems in human being and an organization, a diagnostic check up should be conducted periodically. Organizational diagnosis refers to an analysis of the organization. The analyses are conducted on the basis of its structure, subsystems and process in order to identify the strength and weakness of structural components to improve the effectiveness of the organization. Just as in the medical sciences, there are few things that cannot be diagnosed, similarly management science is also having few problems of organizations that are not easy to diagnose. But if the diagnosis are done well, various problems can be solved and organizational effectiveness can also be improved. Organizational diagnosis is the first stage where we collect information in a scientific manner. Organizational diagnosis helps organizations identify the gaps between what is and what ought to be. Once we gain a shared vision of the desired state, we identify barriers and work toward solutions. The Six-Phase approach to organizational diagnosis is tailored to the specific needs of each company: Phase 1: Define: Develop a shared understanding of the task, issue, or problem along with a plan for diagnosis. Phase 2: Diagnose: Examine organizational archival reports/documents and utilize information gathered through interviews, focus groups, questionnaires and surveys, along with objective observations to collect relevant data.

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Phase 3: Analyze: After collecting the data, use statistical analysis methods to interpret the data and develop practical recommendations. Phase 4: Presentation of Findings: This phase involves determining an effective intervention strategy. Phase 5: Action Planning: We work with key players from the organization to develop an action plan that: Fits the needs of the organization Will yield measurable results Will enhance the organizations capacity to manage change Is catered to the organizations situation, culture, context, and maturational cycle. Phase 6: Reinforce: Maintaining a focus on the desired state and helping organizations sustain change initiatives. The reinforce phase ensures effective implementation of our action plan and outlines the next steps to take once the action plan has been implemented. Organizational Analysis is the second stage, where we analyze the information in a scientific manner and develop a strategy or action plan. It includes: Culture and Climate Analysis Employee Opinion Analysis Market Research Analysis Competitive Analysis Company SWOT Analysis Environmental Scan Analysis or Development Skill and Competency Assessment Feedback Analysis. These analyses help in developing master strategies, goals, objectives, tactics and structural redesign. Organizational analysis helps in understanding functioning of organizations, planning for growth and expansion, improving organizational effectiveness and general improvements and solving organizational problems. Organization Analyses are necessary for an organization for following reasons: 1. For enhancing the understanding of organizations function: The main purpose of this analysis is to enhance the understanding of human behaviour or to enhance the understanding of the society to understand the organizational life. 2. Planning for growth and diversification: Organization analyses are necessary for planning growth and broaden new horizons. These analyses may expose the strength and diversification that amy further be used for growth and for removing the weak spots from the new plans. 3. Improving Organizational effectiveness or Planning General Imrovements: Organizatonal analysis, action steps are initiated for harmonizing administration, introducing new management systems and processes, reducing unwanted expediture, changing personnel policies, training, introducing timesavers etc. 4. Organizational Problem Solving: If any of the sub system start creating problems, the diagnosis study carry out in order to identify the source of the problem and take necessary actions.

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Q. 5. What are the different sources of resistance to change? Discuss with examples. Describe the process of overcoming resistance to change. Ans. Resistance to Change Here Newtons third Law of motion is applied. It states that every action has an equal and opposite reaction. Actually, the real change will be effective only if driving forces and greater than restraining forces. Resistance needs to be avoided. It could be of two types: individual resistance and organizational resistance. Individual Resistance: Resistance has varying intensity in different situations. The first level of intensity occurs when a person comes to know about the proposed change. There are some issues which are not observed initially. These issues may not be found to cause resistance initially, but these issues become visible only at the time of discussing these issues. These issues may appear in different ways like rewards, punishment, and mistrust, fear of loss recognition and lack of resilience. The 3rd level of issues are ingrained because of conflicting values, visions, life goals etc. The different types of resistance of change are: Logical attitudinal and sociological. Logical resistance occurred due to disagreements with facts, reasoning and conceptual difference. Attitudinal resistance is on the basis of emotional or psychological reasons. Sociological resistance is due to social aspect. R.Likert described following reasons of individual resistance. Selective Perception: Employees may perceive same things/events in different ways. They also keen to see how the changes would be affected personally. Fear of Unknown: The changes or new patterns may disturb the employees usual life and it may also take time to adopt these changes. Lack of Information: Lack of information is related to what is expected or why the change is important and how this change will effect. Hostility Towards Change Initiator: The relationships with the change initiatives result in individual resistance. Organizational Resistance: Few sources of organizational resistance are: Inertia: Due to technology, strategy, structure, procedures and systems, organizations remain in steady state. Any changes creates the feeling of disturbance due to which resistance occurred. Limited focus: Since all the organizational systems are inter-related, any changes in one impact other organizational systems. Group Norms: Through previous working interactions, a group norm settles in. Changes in any of these norms seek new norms to be happened due to which resistance occurred. Threat to Expertise: Due to specialization and expertise, employee feels comfortable in an organization. If any changes are carried out in an organization, they feel that organization may require new expertise or specialization and their expertise will be obsolete. Threat to Power: Any changes in structure, technology, systems, procedures, delegation of authority causes threat to power.

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Resource Pressure: The above-mentioned changes cause various types of resources and manpower resource. Due to which resistance take place. Many researchers conducted research for understanding the causes of organizational resistance. Few of the causes are following: The proposed changes have not been documented. Employees are not provided adequate information about the change. Lack of clarity and involvement of the employees affected by the change. Enhancing workload during implementation. Resolution of the issues, worries and anxieties relating to job security. Overcoming Resistance to Change Overcoming resistance to change is a positive approach that provides new opportunities for a thorough understanding of contextual factors. Thus, instead avoiding these resistances should be admired. The issues should be explored and emotional issues should be separated, through which the real issues can be clarified and identified. Some Principles of Change Social and behavioural scientists have prescribed various principles or rules of change. Few of them are enlisted below: Organizational system consists of many inter-related or interdependent components. Changes in any of the component affect other components. Changes disturb the equilibrium of the organizational system, thus change interventions should be made in a planned way. Self-interest of stakeholders also helps in changing. Change agents must need to know how to analyze and manage the driving and resisting forces. A comprehensive design diagnosis is required for designing appropriate interventions. Employees should actively participate in making the change. An appropriate time frame also helps in making changes. High adaptability helps change agents in change plans. Through proper understanding of resistance employees can work best. Self-awareness is also required in planning for change. Accepting ownership in the change process. People dont resist change they resist pain or threat which they expect for themselves. Through power, people get everything what they want, by showing resistance people try to avoid what they dont want to get. Rather than suppressing, avoiding it manages resistance If people are invited to contribute to the change process and by giving the feedback about the change, the acceptance of organizational change will increase.

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