Report on Organizational Development & Change

A.     NATURE AND FORMS OF ORGANIZATION

1. Organization  defined

“…derived from the Greek word organon meaning tool. … used in both daily and scientific English in multiple ways. “            

An organization is a group of people intentionally organized to accomplish an overall, common goal or set of goals. http://www.managementhelp.org/org_thry/org_defn.htm

An organization is a social arrangement  which pursues collective goals, which controls its own performance, and which has a boundary separating it from its environment.

2.     Nature and forms of organization

NEW FORMS OF ORGANIZATIONS ARE GEARED TO MAKE ORGANIZATIONS MORE RECEPTIVE, ADAPTIVE AND GENERATIVE – ALWAYS FOCUSED ON MEETING THE NEEDS OF STAKEHOLDERS.  EXAMPLES OF NEW FORMS/NEW ORGANIZATIONAL STRUCTURES,  E.G. JOINT VENTURE TO BUILD A COMPLEX, TECHNICAL SYSTEMS SUCH AS A SPACE SHUTTLE, NETWORK OF LARGE CONSTRUCTION COMPANIES. COMMON CHARACTERISTICS OF NEW FORMS OF ORGANIZATIONS:

STRONG EMPLOYEE INVOLVEMENT	Inputs to the system starts from those most in-the-know about  whether the organization is achieving its goals or not, thus the org stays highly attuned and adaptive to the needs of stakeholders.
ORGANIC IN NATURE	Less rules and regulations, at times no clear boundaries and always-changing forms.
AUTHORITY BASED ON CAPABILITY	Ensures that the organization remains a means to an end and not an end in itself.
ALLIANCES	Takes advantage of economies of scale, e.g. collaborations, networks, strategic alliances/mergers, etc.
TEAMS	Shares activities to take advantage of economies of scale at the lowest levels of activities and ensures full involvement  of employees at the lowest levels.
FLATTER, DECENTRALIZED ENVIRONMENT	Less middle management, resulting in top management exchanging more feedback with those providing products and services; also results in less overhead costs.
MINDFULNESS OF ENVIRONMENTS, CHANGES, PATTERNS AND THEORIES	Priority on reflection and inquiry to learn more experience; develop learning organizations (as discussed in next table)

http://www.managementhelp.org/org_thry/new_forms.htm

VIRTUAL ORGANIZATIONS are an emerging grouping  where members interact with each other completely, or almost completely, via telecommunications and where members may never actually meet each other.  The following are classified as virtual organizations:

SELF-MANAGED TEAMS	Usually made up of 5-15 people geared to produce a product or service; interdisciplinary; with authority and timely access to production resources; self-managing (access to resources, scheduling, supervision, choice of processes, rotating of roles – authority or leadership at any given time will rest on who has the most expertise regarding the work at at hand; members are trained in problem-solving and team-building; work best in environments where complex technology is used to deliver outputs and in dynamic marketplaces and organizational environments.  Theses teams pose a unique challenge to traditional managers as it can be extremely difficult for him or her to let go of control.
LEARNING ORGANIZATIONS	Formed out of the need for organizations detect and quickly repair its errors to remain relevant in a dynamic environment. Continuous feedback to and within the organization that will allow it to unlearn old beliefs and remain open to new feedback is afforded in these organizations. Managers manage less, facilitate more and provides for time to work on the feedbacks – exchange, inquire, reflect – and gain consensus. Systems theorist Peter Senge, in his The Fifth Discipline notes that “continually expanding its capacity to create its future --- for a leaning organization, ‘adaptive learning’ must be ‘generative learning’, learning that enhances our capacity to create.”
SELF-ORGANIZING SYSTEMS	Often change their structure and processes to conform with feedback and their ultimate purpose is to survive and duplicate in an ever-changing and complex environment; differ from SELF-MANAGED TEAMS because in these systems an ultimate purpose is assigned to each team member; requires strong current goal/purpose, continual feedback, continuous and shared reflection around the current processes; manager puts high value on communication and “a great deal of patience” and the ability to focus on outcomes rather than output (focus in on learning than on method).

3.     Theories of organization

Organizational performance may be appreciated with less difficulty by, first, acquiring a background of the theories of organization. This section  from http.//www.cedu.niu./-bailey/web564/organization/organization.htm derived from Gareth Morgan’s “Images of Organization” views the   

ORGANIZATION as MACHINES, ORGANIZATIONS as BRAINS, ORGANIZATIONS  as ORGANISM.

ORGANIZATION as MACHINES	According to Morgan, this view is the “basis for bur3eaucratic organizations. When managers and leaders think about an organization as a machine, their management style is very mechanical. … managers with this mindset tend to manage and design organizations as machines made up of interlocking parts that each play a clearly defined role in the functioning of the whole.”
ORGANIZATIONS as BRAINS	Morgan’s emphasis is on “the importance of information flow, information processing, learning, and intelligence.” The organization is viewed as “a neural network of energy, information, exchange and processes … an organization can think, learn and problem solve”; consistent with the definition of “learning organizations”2.
ORGANIZATIONS  as ORGANISM	This is the view “most adapted by human performance technologists … “ as it “focuses the attention on understanding and managing organizational needs and environmental relationships” … encourages seeing each organization as unique and in a constant state of change or growth” … “the basis for the open systems approach to organizations” … “builds on the principle that organization, like organisms, are open to their environment and must achieve an appropriate relationship with that environment if they are to survive” …

“This ORGANIZATIONS  as ORGANISM approach challenges the performance consultant to begin organization design with an analysis of the ENVIRONMENT (external forces) and its relationship to the organization’s mission, processes, products and services (internal forces). The success or survival of the relationship between the external and internal forces is determined by appropriate organizational PERFORMANCE MEASURES”  (as shown in the image below).

Mission                                                                                                                                           Performance             Inputs           Transformation                          Outputs                                         Measures                                    Requirements

E

N

V

I

R

X X X

PROCESSES PROCEDURES EFFICIENCIES

O

N

M

E

N

T

The theories of organization are also grouped as economic or behavioral, even as some theories appear to have emanated  or are influenced by both economic and behavioral disciplines.

ECONOMIC THEORIES	SALIENT FEATURES
MICRO-ECONOMIC MODELS	Information technology (IT) is a factor of production, like capital and labor
TRANSACTION COST THEORY	Firms attempt to minimize transaction costs internally and externally.
AGENCY THEORY	The firm is the nexus of contracts among agents who make decisions. Information systems  shrink the number of agents and reduce costs.

BEHAVIORAL THEORIES where concepts from Sociology, Psychology, Political Science, Organizations and IT reinforce each other.	SALIENT FEATURES
DECISION AND CONTROL THEORY	Decisions are made under conditions of risk and uncertainty; centralization and hierarchy reduce uncertainty.
SOCIOLOGICAL THEORY	Bureaucracy, and Standard Operating Procedures (SOPs) help stabilize organizations but slow down their ability to change.
POST INDUSTRIAL THEORY	Flatter organizations; dominated by knowledge workers; and decentralized decision making.
CULTURAL THEORY	IT must fit organization’s culture to be accepted.
POLITICAL THEORY	Information systems are outcomes of political competition for policies, procedures, and resources.

Toyota’s Lean Enterprise Model (1970s)                                                                                    http://www.wbdg.org/resources/chngorgwork.php

Key principles:

·        Define value from customer perspective

·        Identify the value chain (internal processes that add value for the customer)

·        Eliminate non-value added processes across the organization

·        Waste and inefficiencies reduction in support functions

Some key organizational changes:

·        Reduced, “lateralized”  hierarchical structure (cross-unit organizational groupings, fewer layers, more decentralized decision-making)

·        Blurred boundaries (focus on task and knowledge sharing)

·        Team-based organizational structure (teams as basic building blocks, managers serve as social supporters and coaches rather than as commanders)

·        Continuous change (cycles of reflection and reorganization)

Some influential organization theories:

WEBERIAN (Maximilian Carl Emil Weber)	o   Authority comes in 3 variants: legitimate, traditional, and charismatic. o   Elements of the bureaucratic structure: .- Rules and rule-bound behavior                        - Competence-based promotion - Uniform operations, continuity despite change - Merit-based employment   in personnel                                                        - Merit-based employment            - Division of labor based on specialization          - Legally defined hierarchy of authority - Rational task allocation                                     - Limited discretion of officers - Impersonal orientation                                       - Specific sphere of competence - Membership = career                                         - Legal basis of tenure - Equitable treatment of employees by management
MARXIST/SOCIALISM Socialism will be achieved via class struggle and a proletarian revolution that represents the transitional stage from capitalism to communism.	·        State or collective ownership and administration of the means of production and distribution of goods (socialism) ·        Creation of an egalitarian society
SCIENTIFIC MANAGEMENT /TAYLORISM Frederick Winslow Taylor (1856-1915) pioneered in analyzing human behavior at work – interaction of human characteristics, social environment, task, and physical environment, capacity, speed, durability and cost to remove human variability – (using as his model the machine with its cheap, inter changeable parts, each of which does one specific function) His machine model of organizations entailed breaking down each task to its basic detail, teaching the worker how to do it and limiting the worker’s moves to only those that are essential to his job.	·        Started during the Industrial Revolution (late 18th c., development of steam power, creation of large factories) that led to great changes in textile production, among others. The factories and railroad buildings posed great challenges to organization and management, requiring management of large flows of material, people, and information over large distances that, in turn, created the need to systematically approach emerging management concerns. ·        Rules and laws developed through hundreds of experiments (just as the workman is) govern the head of the business ·        Equitable work standards ·        Organizations are arranged in hierarchy, systems of abstract rules and impersonal relationships between staff ·        Dehumanization of work (according to resisting workers, some of committed sabotage) but Taylor was cognizant of fatigue and safety (workday length, introduction of breaks). ·        Objectives: o   The development of a science for each element of a man’s work to replace the old rule-of thumb methods; o   The scientific selection, training and development of workers instead of allowing them to choose their own tasks and train themselves as best as they could; o   The development of a spirit of hearty cooperation between workers and management to ensure that work would be carried out in accordance with scientifically devised procedures; and o   The division of work between workers and the management in almost equal shares, each group taking over the work for which it best fitted instead of the former condition in which responsibility largely rested with the workers. ·        The theory remains popular having been modified and updated.