Chapter 8

INP3004/MAN3360
Dr. Steve
 Organizational Research
Macro vs Micro Levels
Macro level Organizational level
Study what makes one organization more successful than another
in terms of its structure, hierarchy, upper management strategies
and policies, history, etc.
Micro level Individual level
Study worker productivity, satisfaction, communication between
workers, etc.

Macro vs Micro research - Very little empirical data at

macro level due to difficulty of conducting this type of
research
Sample size, cooperation, # of orgs w/ variable of interest.
Talk in terms of Organizational Theory
 Organizational Theories

1. Classical Theory
2. Neo-Classical Theory
3. Systems Theory
 Classical Theory
Components
Classical Theory Highly structured, bureaucratic approach
to organizations
Four Components of classical theory
1. Differentiated Activities Organizations divided by
function, but rely on relationships between functions
Ex: Research, Personnel, Finance, Marketing, etc.
2. People Though Orgs consist of activities and tasks,
people run the show
Ex: Communicate, perform tasks, report to superiors
3. Cooperation toward a goal People must cooperate to
reach common org goal
Ex: Make profit to continue operation, provide quality
product/services, etc.
4. Authority Supervisor-subordinate relationships
Ex: Manager tells worker what to do and how to do it
 Classical Theory
Principles
Four Principles of Classical Theory that guide four
components
1. Functional Principle Division of labor (Horizontal) departments are
set up so that people in each dept perform similar work
Allows one manager to supervisor many similar tasks
2. Scalar Principle Chain of command (Vertical) structure of org such
that each level has its own level of responsibility
each worker has only one supervisor to report to
3. Line/Staff Principle Differentiates between personnel
Line responsible for meeting org goals production, engineers, faculty, etc.
Staff support lines activities personnel dept, quality control, admin,
custodial, etc.
4. Span of Control Number of subordinates under each mgr
Flat each worker has more autonomy
Tall more authority to supervisors
Scalar Principle Functional vs Scalar Principles
Vertical Structure

Functional Principle
Horizontal Structure
 Neo-Classical Theory
Neo-classical theory softer version of classical theory
based on following challenges to bureaucracy:
Differentiated activities some orgs allow people to get
involved in many different activities
Less specialization
People people are interchangeable, rules arent
When someone leaves org, the position usually remains
Cooperation toward a goal Not everyone in org shares
the same goal
Some might see profit as goal, others environmental concern
Authority Supervisors do not always direct subordinate
performance
Current trend toward more autonomy and participative decision
making
 Neo-Classical Theory
in Comparison to Bureaucracy
Neo-classical theory:
More humanistic approach uses psychological
principles of behavior
Scalar principle need not be so rigid
Distinction between line and staff often blurred
Span of control size depends on several factors
(no magic number)
Consider mgrs ability, amount of supervision reqd,
quality of workers, type of work, etc.
 Systems Theory

Systems Theory developed to account for

modern orgs need to adapt to changing
environment
Treats org similar to biological system
(Darwinian model)
Must consider org within the context of its
relationship to the environment
Cannot study individual or small group
behavior in isolation, all part of an interacting
system affecting all other parts
 Systems Theory
Five Parts to an Organizational System
1. Individuals bring KSAs & personalities to org
2. Formal Organization system structure
3. Small Groups made up of interrelating
individuals
4. Status and Role differences in status and role
dictate behavior norms more so than the individual
5. Physical Setting physical environment &
technology
 Systems Theory Model
Output Users
Input Resources
Consumers
Families
Banks Clients
Government
Environment
Non-consumers
Material suppliers

Feedback

Input Process Output

Human Resources Organizational Structure Products/Services
Financial Resources Admin Decision Making Satisfaction
Physical Resources Org policies, procedures Reputation
Materials Production process Profit/loss
Information Org Climate Wages/Salaries
Taxes
 Organizational Structure
Coordinating Mechanisms
1. Mutual Adjustment Informal communication between workers
who adjust to one another
You wash, Ill dry
Organization Complexity

2. Direct Supervision One person tells the other what to do

Manager provides instruction to stock clerk
3. Standardization of Work Processes Strict operating
procedures w/little room for individual input on how
Routine assembly line work
4. Standardization of Work Output Specify exact quality of
product or service (quality control)
Every pizza tastes the same regardless of who made it
5. Standardization of Skills & Knowledge Everyone doing a
particular job gets the same training
Certified Public Accountants
 Mintzbergs
Basic Parts to all Organizations
Strategic
Apex

Techno Middle Support

Support Line Staff

Operating
Core
 Mintzbergs
Basic Parts to all Organizations
1. Operating Core Individuals producing the goods or services
Production workers
2. Strategic Apex Top level management responsible for
overall effectiveness of the org
President, CEO, VPs, Top Mgrs
3. Middle Line Connects apex to operating core, chain of
command
Middle managers
4. Techno Structure People who design the work, plan it, and
train workers
Analysts, I/O psychologists, Human Factors specialists
5. Support Staff Provides services to org to assist function,
but not directly related to org mission
Custodial, mailroom, security
 Re-organizing & Downsizing

Restructure in response to environmental changes

Reorganize to change roles and authority
hierarchy, rename, split, combine departments
Downsize or right sizing to layoff large numbers
of workers
Sent packing
Fired Pink Slip
Rightsized Canned
Axed
Laid off Riffed
Walking papers
 Reasons for Downsizing

Automation machines do work of people

Obsolescence positions become obsolete
Salary Expense cut costs to survive by cutting
salary

Pink Slip
 Who gets the Axe?
Strategic Apex?
Very high salaries, could save big $$
However, most responsibility, make big decisions
Operating core?
Lots of workers, perhaps dont need as many
However, they make the products, low salaries dont save that
much $$
Middle line?
Can reorganize and eliminate many middle mgr jobs and fairly high
salaries
Support Staff?
Can be contracted or leased out, save on senior salaries and
benefits
Techno Structure?
In house advisors/analysts can be replaced with outside
consultants that charge more, but only work when you need them
 Before Downsizing
Organizational Chart of SteveMart

President
($300k)

Regional Regional
Vice-President Vice-President
($150k) ($150k)

Vice-President Vice-President Vice-President Vice-President

Pensacola Orlando New York Boston
($100k) ($100k) ($100k) ($100k)

Production Sales Production Sales Production Sales Production Sales

Manager Manager Manager Manager Manager Manager Manager Manager
($50k) ($50k) ($50k) ($50k) ($50k) ($50k) ($50k) ($50k)

Total Salary = $1,400,000

 After Downsizing
Organizational Chart of SteveMart

President
($300k)

Vice-President
($150k)

Sales
Manager
($100k)

Production Production Production Production

Manager Manager Manager Manager
Pensacola Orlando New York Boston
($50k) ($50k) ($50k) ($50k)

New Total Salary = $650,000

 Organizational Social System

Social System informal structure apart from the formal

organizational structure
Three components
1. Roles Expected behavior in a given position, related to
the task
One person can be production worker and coach of company
softball team
2. Norms Acceptable behaviors w/in a group developed
through experience and maintained by peer reinforcement
and punishment
Dress, lunch breaks, topics discussed
3. Organizational Culture Attitudes, behaviors, customs,
and habits of organization
The way we do things around here
 Organization Development

Organization Development (OD) Change

aspects of the organization (rather than job) to
increase productivity, motivation, etc.
Uses psychological principles to improve orgs
effectiveness.
Takes place throughout the org from line worker to
upper management
OD consultant like an Org Doctor
Diagnoses orgs problems
Prescribes a corrective intervention
Rechecks with follow-up evaluation
 Organization Development
Components
1. Change Agent Usually a consultant educated
in business or psychology
Capable of diagnosing org problems, developing ways
to correct, and implementing the changes or
instructing the org on how
2. Client Org or individual or group
Ethical considerations do not want to help managers
at expense of employees even though mgr might be
the client
3. Intervention What change agent is paid to do
(change program)
 Empowerment

Giving more power and decision-making authority to

employees within a context of less traditional managerial
oversight
Spreitzers (1997) four dimensions of empowerment:
1. Meaning Believing that what you do matters
e.g., being energized and passionate about your work
2. Competence Sense of self-effectiveness
e.g., having the confidence to perform successfully
3. Self-determination Behaviors initiated and regulated by ones self
e.g., sense of responsibility and ownership of work
4. Impact Belief that you can effect organizational outcomes
e.g., making a difference
 How many psychologists does it take
to change an organization?
One, but it has to want to change.

Cannot change an org if you dont understand:

1.What can be changed
2.What outcome you expect to accomplish
3.Those things that can affect the change
Model of Organizational Change

Intervention Activity
Organizational Work Setting

Social
factors
Organizing Physical
arrangements setting
Technology

Individual
Behavior

Organizational Organizational Individual

performance Outcomes development
 Model of Organizational Change
(Robertson & Porras)

Organizational Work Setting Four interacting

components
1. Organizing Arrangements structure,
administrative system, reward systems
Ex: bureaucracy or open systems approach
2. Social Factors org culture, norms, roles,
management styles
Ex: formal or casual, personal or business relationships
3. Physical Setting layout of building
Ex: factory, offices, cubicles
4. Technology machines required to do job
Ex: computers, phones, tools, production line
 Model of Organizational Change
(Robertson, Roberts, & Porras)

Individual Behavior changes in the work setting

affect worker behavior
Ex: New technology may frustrate workers affecting org
culture and negatively impacting performance and
satisfaction
Organizational Performance if individuals work
hard and cooperate, then org benefits
Individual Development knowing one
contributes to orgs success makes one feel better
about self and org, thus providing motivation to
work harder
 Overcoming Organizational
Resistance to Change
Due to increased ambiguity in the environment and other
undesirable effects, individuals often resist change in an
organization
Dirks, Cummings, & Pierce (1996) used the concept of
psychological ownership to understand why people
promote or resist change
Three needs related to psychological ownership:
1. Self-enhancement: Individuals desire to maintain high levels
of self-esteem
2. Self-continuity: Individuals attempt to maintain stability of
their self over time
3. Control and efficiency: Individuals attracted to situations
where control and efficiency are likely to occur
 Resistance to Change
Three types of organizational change:
1. Self-initiated vs. imposed change: Individuals are more likely
to accept self-initiated change (change seen as a result of their own
choosing)
2. Evolutionary vs. revolutionary change: Evolutionary change is
more likely to receive positive reactions as it is a gradual more
comfortable change process
3. Additive vs. subtractive change: Additive change is often
viewed more favorably, as the employees dont feel as though they are
losing something
Additional ways a consultant can ease concerns in a change
situation:
educate about the reasons why change is needed
provide feedback sessions during the change interventions
 Organization Development
Intervention Activities
Diagnostic fact finding using tools such as
interviews, records, observations, surveys
Intergroup team building, conflict resolution,
developing interpersonal and communication skills
Education & Training improve KSAs
Coaching & Counseling behavioral
interventions, behavior modification, defining
goals, encouraging empathy
Life & Career Planning identify individuals life
& career goals, plan ways to help achieve them
OD Intervention Depends on: Client, Type of
Change, and Role of Change Agent
Total Org
Client Group
Individual
Conceptual

Type of Behavioral
Change
Procedural

Structural

Role of
Change Agent
 Change Agent Roles

1. Acceptance Allows clients to explore their own

problems (Rogerian-like approach)
Active listening (hmm, uh huh)
2. Catalyst Allows self discovery by client, but
provides feedback
If you think thats the problem, then why?
3. Confrontative Probes clients and challenges their
views providing supporting data
You say you the guys on the line have gotten lazy, but their
performance has actually improved over time
4. Prescriptive Doctor/patient-like relationship
I think this is the problem and this is what you should try
 Culture Change
What is necessary for an org to change its
culture (norms, beliefs)?
1. Strong leader need a persistent leader to
help employees who are resistant to change
2. Clear vision vision of what the new culture is
and how workers will be effected must be clear
and gain commitment at all levels
3. New work procedures cant change if
everything remains the same (how decisions are
made, communication channels, policies)
4. Org must be open to learn No one knows for
sure what will happen, but must be willing to try
 Total Quality Management
Total Quality Management (TQM) or Total Quality
Leadership (TQL)
OD intervention begun by W. Edwards Deming (American
Physicist)
First adopted by Japanese business
Became popular in U.S. after success of Japan
Based on premise Continuous Process Improvement
 Total Quality Management
How does it work?
1. Employee Involvement gets everyone involved
in decision making. How?
a) Sharing info goals, org performance, mission
b) Develop knowledge training at all levels
c) Reward org performance rewards tied to org
performance, not individuals
d) Redistribute power more autonomy to workers
2. Quality Control strive for consistent high quality
3. Customer Satisfaction emphasis on client
4. Org Policies consistent with TQM rewards for
quality, not speed
 Re-engineering

Re-engineering 3 part approach to changing an

org tear down and make better
1. Identify orgs distinctive competencies what
does the org do best?
2. Assess Core Processes determine which
processes are working and which are remnants
of past management
3. Re-organize horizontally by process - cut out
unnecessary middle management (more
autonomy to workers)
 TQM vs. Re-engineering

TQM
Gradual improvement
Bottom-up:
participative decision-
making in planning TQM
and execution
Results in new processes
Re-engineering
Drastic change
Top-down:
management decides
how to re-engineer
Often results in downsizing
 Does OD work?
Like therapy, a single dose is often not effective
Empirical findings
No change about 50% of the time
Negative change less than 10% of the time
Positive change about 40% of the time
Results similar to that of psychotherapy with therapy
many people still dont get better, some do, very few get
worse.