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Organizational Behaviour

Canadian Edition
Schermerhorn, Hunt, Osborn, Currie

Prepared by: Joan Condie


Chapter 2

The High-Performance
Organization
Questions

What is the high-performance context of


organizational behaviour?
What is a high-performance organization?

What are the management challenges of high-


performance organizations?
How do high-performance organizations
operate?

Schermerhorn, Hunt, Osborn, Currie Organizational Behaviour, Canadian Edition Copyright 2005 John Wiley & Sons Canada, Ltd.
High-Performance Context of
Organizational Behaviour

Changing customer expectations


Competitive environment and demand for high
quality and strong service
Focus remains on total quality management,
continuous improvement
Needs of customer are paramount

Schermerhorn, Hunt, Osborn, Currie Organizational Behaviour, Canadian Edition Copyright 2005 John Wiley & Sons Canada, Ltd.
High-Performance Context of
Organizational Behaviour

Changing workforce:
Greater diversity more women, more visible
minorities, aging workforce
Generation X workers want: greater autonomy,
challenging work, flexible work schedules; work in a
team; loyalty not important to them
Skill deficiencies in many high school graduates;
in a knowledge-driven economy, lack of basic skills
means need for expensive remedial training

Schermerhorn, Hunt, Osborn, Currie Organizational Behaviour, Canadian Edition Copyright 2005 John Wiley & Sons Canada, Ltd.
High-Performance Context of
Organizational Behaviour

Changing Organizations:
Constant change sometimes deliberately
pursued through process re-engineering
Expanding use of information
technology electronic commerce
Movement towards a free-agent economy
individuals contract their services to a changing
mix of employers
Concept of shamrock organizations three leaves
comprised of core full-time workers, outside
contractors, and part-time workers as needed
Schermerhorn, Hunt, Osborn, Currie Organizational Behaviour, Canadian Edition Copyright 2005 John Wiley & Sons Canada, Ltd.
What Is a High-Performance Organization
(HPO)? Five Key Components

1. Employee involvement
2. Self-directing work teams
3. Integrated production
technologies
4. Organizational learning
5. Total quality management

Schermerhorn, Hunt, Osborn, Currie Organizational Behaviour, Canadian Edition Copyright 2005 John Wiley & Sons Canada, Ltd.
Key Components of HPOs

1. Employee involvement
Decision making by employees enhances
productivity and satisfaction
Traditional organizations have low involvement
(people just do their jobs); HPOs have
involvement through participative management
(where workers have responsibilities for day-
to-day decisions) or empowerment, where
workers make many decisions affecting them
and their work
Schermerhorn, Hunt, Osborn, Currie Organizational Behaviour, Canadian Edition Copyright 2005 John Wiley & Sons Canada, Ltd.
Key Components of HPOs

2. Self-directing work teams


Empowered to plan, do, and evaluate their
own work
Useful in downsized entity with fewer
managers; enhances satisfaction and utilizes
employee expertise

Schermerhorn, Hunt, Osborn, Currie Organizational Behaviour, Canadian Edition Copyright 2005 John Wiley & Sons Canada, Ltd.
Key Components of HPOs

3. Integrated production technologies


Use of technology to make manufacturing and
services flexible; extensive use of computers,
just-in-time approach
Job design and information systems are
included

Schermerhorn, Hunt, Osborn, Currie Organizational Behaviour, Canadian Edition Copyright 2005 John Wiley & Sons Canada, Ltd.
Key Components of HPOs

4. Organizational learning
Gather information to anticipate change and
prepare for adaptation
Information put into the organizations memory
to use in future situations
Share information across functions

Schermerhorn, Hunt, Osborn, Currie Organizational Behaviour, Canadian Edition Copyright 2005 John Wiley & Sons Canada, Ltd.
Key Components of HPOs

5. Total quality management


Commitment to high quality results, continuous
improvement, meeting customer needs

Schermerhorn, Hunt, Osborn, Currie Organizational Behaviour, Canadian Edition Copyright 2005 John Wiley & Sons Canada, Ltd.
Management Challenges of
High-Performance Organizations

Environmental linkages
Internal integration

Middle manager roles

Upper-level leadership

Greenfield sites versus redesigns

Schermerhorn, Hunt, Osborn, Currie Organizational Behaviour, Canadian Edition Copyright 2005 John Wiley & Sons Canada, Ltd.
Challenge 1: Environmental Linkages
HPO is an open system, influenced by external
environment and influencing it in turn
Need to keep tuned in to changes in environment, e.g.,
changing customer expectations
Need to develop missions or visions that focus all
energies on how the organization addresses its inputs
(problems and opportunities); involvement of all
employees in vision directing is crucial for acceptance
Need to be aware that outputs include not only the
product or service provided, but also impact on quality of
life of organizational members, impact on society
through activities

Schermerhorn, Hunt, Osborn, Currie Organizational Behaviour, Canadian Edition Copyright 2005 John Wiley & Sons Canada, Ltd.
Challenge 2: Internal Integration

Smooth integration of all five components needed


yet not easy
E.g., self-directed teams using production
technology, involved in decision making but also
working with others above and below, also involved
in the decisions relevant to them, tracking
appropriate info for organizational learning and
maintaining focus on high quality
HPO may be an island within a larger, more
traditional organization that may even oppose it
Schermerhorn, Hunt, Osborn, Currie Organizational Behaviour, Canadian Edition Copyright 2005 John Wiley & Sons Canada, Ltd.
Challenge 3: Middle Manager Roles
Implementing the HPO components can bring
challenges that must be addressed by middle
managers:
Resistance from employees (e.g., prefer individual work)
Resistance from managers (fear loss of traditional role;
uncomfortable with move to being facilitators and
coaches)
Tensions between components (e.g., total quality
management (TQM) focus on quality may conflict with
demands from involved employees to address other
aspects of concern)
Schermerhorn, Hunt, Osborn, Currie Organizational Behaviour, Canadian Edition Copyright 2005 John Wiley & Sons Canada, Ltd.
Challenge 4: Upper-Level Leadership

Deciding how many HPO components to use


May only be comfortable with 1 or 2, not all 5
Trying to extend North American business practices
internationally
Self-directing teams and employee involvement wont be
adopted easily in countries where status, power, and
prestige are basic work values
Workers with appropriate training may not be available
Training & development of middle managers, whose
roles are drastically changing and who may resist

Schermerhorn, Hunt, Osborn, Currie Organizational Behaviour, Canadian Edition Copyright 2005 John Wiley & Sons Canada, Ltd.
Challenge 5:
Greenfield Sites versus Redesigns

Greenfield site = starting the HPO from scratch


Best success record
Redesigning a traditional organization
Less success than greenfield sites but more
successful than unchanged traditional
organizations
Why would it be easier to create a successful
organization on a greenfield site than through
transforming an already-existing organization?
Schermerhorn, Hunt, Osborn, Currie Organizational Behaviour, Canadian Edition Copyright 2005 John Wiley & Sons Canada, Ltd.
WestJet Airlines: An HPO Example
Employee involvement flat, lean hierarchy,
with extensive empowerment; heavy team emphasis
Integrated production technologies internet
technology used for ticketless travel, dispatch, revenue
management, parts replacement
Organizational learning sharing of business
information through letters and newsletters to
employees, recovery/learning centre doubles as back-
up for main computer and training facility
TQM WestJet Spirit comprised of strong work ethic,
strong desire for quality work, desire to go beyond the
call of duty, helping others, doing the right thing
Schermerhorn, Hunt, Osborn, Currie Organizational Behaviour, Canadian Edition Copyright 2005 John Wiley & Sons Canada, Ltd.
WestJet Airlines: An HPO Example

Other HPO aspects


Has clear mission and vision, reflected in core
values and company culture
Hiring supports culture and mission through
emphasis on WestJet Spirit, values of hard
work and fun
Profit-sharing; over 80% of employees are
shareholders; these compensation policies
support motivation and commitment
Successful adaptation to environmental
changes despite fierce competition
Schermerhorn, Hunt, Osborn, Currie Organizational Behaviour, Canadian Edition Copyright 2005 John Wiley & Sons Canada, Ltd.
Copyright
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