1.1 Introdu Introductio ction n
This lecture introduces you to the important concepts met in organization theory. We shall learn what a theory is, what an organization is, and its importance in society We shall further differentiate between organization theory and other theories we learn in business business such as Organizatio Organization n Behaviour Behaviour (O.B.) (O.B.) Organization Organizational al Psychology Psychology and Management theory. It is assumed you have already covered Introduction to Business Course (DBA1O1).
1.3 What is Organization Theory?
Organi Organizat zation ion theory theory is the discip disciplin linee that that studie studiess the struct structure ure and the design design of organizations. Organization theory refers to both the descriptive and prescriptive aspects of the discip discipli line. ne. It descri describes bes how organi organizat zation ionss are actual actually ly struct structure ured d and offers offers suggestions on how they can be structured to improve their effectiveness. It is a body of knowledge about organizations which has been developed through the scientific method.
1.3.1 Sources of Knowledge (a) Common sense: When people share a common belief then. it must be true e.g.
opposites attract, “birds of a feather flock together.” Although common sense may at times be correct or true, it may sometimes present different versions of the truth. (b) Appeal to Authority. The second source of knowledge is appeal to authority. This
means that what experts say is correct (is the truth) and it is to be accepted. c) Deducti Deductive ve Reasoni Reasoning. ng. This This meth method od of buil buildi ding ng know knowle ledg dgee foll follow owss the the
following format: all short men are clever and Kariuki is a short man ness therefore, Kariuki is a clever person
(d) Unsys Unsystem temati aticc Rese Researc arch. h.
Thi This form orm of crea creati ting ng know knowlledge edge ent entail ails the the
carryi carrying ng out of resear research ch and making making conclus conclusion ionss without without follow following ing a system systemati aticc (sci (scien enti tifi fic) c) meth method od for for exam exampl ple, e, one one i4ay i4ay want want to find find the the propo proport rtio ion n of cars cars in and Nairobi which are Toyotas. He or She stops at a main road e.g. Uhuru Highway,
counts all the cars that pass there, in terms of makes and at the end of his research, finds that
Toyotas
were
10%
of
the
cars ars
pas passing
throug ough.
He/She
there erefore ore
concludes that 10% of cars in Kenya/Nairobi are Toyotas.
this meth method od of buil buildi ding ng know knowle ledg dge, e, the the (e) Scientif Scientific/ ic/Syst Systema ematic tic Researc Research h . In this researcher follows a systematic (scientific) method which can be tested and followed by oth other
researcher hers
in
ord order
to
confirm
the
findi ndings.
In
the
systematic
of method the following steps are necessary: nece ssary: Step 1 State study objectives Step 2 State State in detail proposed data collection collection sources e.g. primary primary data or of secondary data Step 3 State data analysis methods Step 4 State data presentation
1.3.2 What is a Theory? A theory is a body of knowledge used to describe and predict. It is an integrated set of
statements that summarise and explain research findings. It is an explanation of some phenomenon and it consists of principles that describe relationships observed in some situation. In other words a theory tries to explain some practice observed in nature. In organization theory the primary focus is the study of organizations at the macro level. In other words we are trying to learn the whole organization or departments: the way it is structured: the ways the various variables relate to each other and the way groups behave in an organization set up.
Purpose of Organization Theory 1.4.3.
The purpose of organization theory is to explain the component parts of an organization and their relationships so that some prediction can be made about how they are likely to behave under certain conditions. It is a way that scholars try to see and think about organizations based upon patterns and regula1ities in organization design. It is a theory that studies organizations, their structure and the relationships between its various parts.
It focuse focusess on organi organizat zation ionss as entiti entities es in themse themselve lvess i.e the whole whole organi organizat zation ion..
1.4. Management Theory, Organizational Behaviour and Organization Psychology 1.4.1. What is Organizational Behaviour?
Organizational behavior refers to the behavior of people in organizations. It tries to underst understand and the behavio behavior, r, attitu attitudes des and perfor performan mance ce of people people in organi organizat zation ions. s. In additio addition n it discus discusses ses human human psycho psycholog logica icall proces processes ses that that can affect affect behavi behavior or in organizations for example it tells us how a system of rewards affects a person’s behavior and performance in organizations. Organizational behavior derives its concepts from political science, psychology, anthropology and social psychology.
Organizational behaviour as a theory seeks increased understanding of human behaviour in organizational settings. It seeks to find out how individuals behave the way they do and how one can change their behaviour and guide them to behave in a certain way. Thus
Organi Organizat zation ional al Behavio Behaviour ur (O.B) (O.B) is about about indivi individual dualss (thei (theirr attitu attitudes des,, percept perception ions, s, motives).O. B is defined as a field that seeks enhanced knowledge of behaviour in organi organizat zation ional al setti settings, ngs, through through the scient scientifi ificc study study of indivi individua duals ls and indivi individua duall processes. The goal of such knowledge is to enhance both organizational effectiveness and individual well being.
1.4.2. What is Organizational Theory?
Organizational theory focuses on the design and structure if organizations. It also looks at organizations as social systems. The discipline of organization theory derives its concepts from sociology, and anthropology. Organizational theory therefore studies organizations from their macro aspects
1.4.3. 1.4.3. How does does Organiz Organizatio ational nal The Theory ory Differ Differ from Organiz Organizatio ational nal Beh Behavio avior? r?
Organizational theory looks at an organization as a whole - its objectives, goals, structure and context. On the other hand organizational behavior looks at the micro elements of the organization, the individual worker
1.4.4. What is Management Theory?
Management theory on the other hand is the study of a particular group (managers) in the organization. How this group behaves, what makes them do what they do and how they can be made made to behav behavee in a way way that that benef benefit itss the the orga organi niza zati tion on is in the the fiel field d of management theory.
1.4.5. What is Organizational Psychology?
Organizational psychology is a science of behaviour and mental processes. Psychology is a study of mind or the soul. Thus in psychology, we study both the mental experiences such as hunger and thirst or anger and their outward manifestations such as drinking or aggression.
1.5 Importance of Organization Theory
For people who are or will be managers, organization theory provides significant insight and understanding to help them be better managers in a rapidly changing world. For example, one of the greatest threats to organization today is the inability of management to adapt to the speed and chaos of technological change. Although companies have made mass massiv ivee inve invest stme ment ntss in tech techno nolo logy gy,, they they are are only only begi beginn nnin ing g to impl implem ement ent the the organizational and management changes needed to make technology and the internet competitive weapons. Understanding organization theory can help managers make these necessary changes by helping them see and understand how technology interacts with other elements of organization and its environment. In a very real sense organization theory can make managers more competent and more influential by giving them an understanding of how organizations work. Organization theory provides ideas, concepts and ways of thinking and interpreting that help the managers effectively guide their organizations. When the old approaches are no longer working, organization theory helps managers understand why and develop new approaches to meet changing conditions. The concepts provided by organization theory helps managers describe organizations more accurat accurately ely,, concise concisely ly and specif specifica ically lly.. The relati relations onship hipss of variab variables les presen presented ted by
organi organizat zation ionss theory theory help help manage managers rs predic predictt outcom outcomee of action actionss taken taken and propos proposee solutions to organizational problems. 1.5.1 Level of Analysis
In systems theory, each system is composed of subsystems. Systems are nested within systems and one level of analysis has to be chosen as the primary focus. Four levels of analysis normally characterize organizations. The individual human being is the basic building block of organizations. The human being is to the organization what a cell is to a biological system. The next higher system level is the group or department. These are collections of individuals who work together to perform group tasks. The next level of analy analysi siss is the the orga organi niza zati tion on itse itself lf.. An orga organi niza zati tion on is a coll collec ecti tion on of grou groups ps or departments that combine into a total organization. Organizations themselves can be grouped, together into the next higher level of analysis, which is the inter organizational set and community. The inter organizational set is the group of organizations with which a single organization interacts. Other organizations in the community also make up an important part of an organization’s environment.
Organizatio Organization n theory focuses focuses on the organizational organizational level of analysis analysis but with concern for groups and environment. To explain the organization, one should look not only at its characteristics but also at the characteristics of the environment and the departments and groups that make up the organization.
Organi Organizat zation ion theory theory does does consid consider er the behavi behavior or of indivi individual duals, s, but in the aggreg aggregate ate.. People are important but they are not the primary focus of analysis. Organization theory is a macro examination of organizations because it analyzes the whole organization as a unit. Organization Organization theory is concerned concerned with people aggregated aggregated into departments departments and pts organizations and with the differences in structure and behavior at the organizational level of analysis.
A new approach to organization studies is called meso theory. Meso theory [meso means re in between] concerns the integration of both micro and macro levels of analysis. Individuals and groups affect organizations and the organizations in focus influence
se individuals individuals and groups. To thrive thrive in organizations, organizations, managers and employees need to under underst stan and d mult multip iple le leve levels ls simu simult ltan aneo eous usly ly.. For For exam exampl plee rese resear arch ch may may show show that that employee diversity enhances innovation. To facilitate innovation, managers need to understand understand how structure structure and context context [organizati [organization on theory] theory] are related to interaction interaction among diverse employees [organizational behavior] to foster innovation, because both macro and micro variables account for innovation.
Organization theory is directly relevant to top and middle-management concerns and partly partly relevan relevantt to lower lower manage management ment.. Top manager managerss are respon responsib sible le for the entir entiree organization and must set goals, develop strategy, interpret the external environment and decide organization organization structure structure and design. design. Middle Middle management management is concerned with major e departments such as marketing or research and must decide how the departments relate to the rest of the organization. Middle managers must design their departments to fit work unit technology and deal with issues of power and politics; inter group conflicts and info inform rmat atio ion n and and cont contro roll syst system emss each each of whic which h is part part of orga organi niza zati tion on theo theory ry.. Organization theory is only partly concerned with lower management because this level of supervision is concerned with employees who operate machines, type letters, teach class class and sell sell goods. goods. Organi Organizat zation ion theory theory is concern concerned ed with with the big picture picture of the organization and its major departments.
1.6 The Meaning of an Organization
An organisation is a consciously coordinated social entity with a relatively verifiable boundary that functions on a relatively continuous basis to achieve a common goal/ or goals. This definition brings out certain facts about an organization. These facts are that organizations are: ♦
Consciously Consciously coordinated coordinated This implies implies that management management deliberatel deliberately y allocate allocate
tasks and responsibilities. ♦
Social entity This implies that the unit is composed of people or groups of people
who interact with each other while performing their various tasks. The interaction pattern that people follow in an organisation does not just emerge rather it is meditated
♦
An organisation has a relatively identifiable boundary. This boundary exists to identify members from non- members. Members enter into explicit and implicit contracts with the organisation.
♦
People in an organisation have some continuity or bond.
♦
Organisations exist to achieve certain goals.
1.6.1 Characteristics of Organizations All organizations exhibit the following characteristics:
(a) Composed Composed of people people who interact interact with with each other other (b) Have identifi identifiable able boundaries boundaries.. (c) Are consciously consciously coordinat coordinated ed and structured. structured. (d) Are relatively relatively continuous. I.e. are established to last. (e) Have goals, goals, which they they strive strive to achieve. achieve. (f) It is a system: system: i.e. it is composed of subsyste subsystems ms of parts which which constitute constitute a unitary whole.
1.6.2 Benefits of Organisations In this this sectio section n we wish to find find the the answe answerr to the questio question” n” why why do we study study organizations?”
Organisations pervade all aspects of contemporary human life - society as a whole, the economy and even our personal lives. You may be interested, in pursuing a career in management. As a manager you may want to know how organisations operate and how to structure them so that they become effective. You may also want to pass a required course in a university or college - thus you may have to study organisation theory. Organisations also satisfy us with our needs which include: (i)
Basic ne needs (b (biological ne needs)
Thes Thesee are are the the need needss nece necess ssar ary y to main mainta tain in life life.. They They incl includ udee the the need need for for food,
water
and
biological needs.
shel helter.
Many
organisati ations
are
formed
to
satisfy
the
(ii)
Social needs.
These are needs that satisfy man’s desire for love, affection, social acceptance, recognition and self-fulfilment. (iii)
Econom Economic ic utilitie utilities: s: - thes thesee are are the the good goodss and and servi ervice cess that hat prov proviide
man with material material well-bei well-being. ng. The food food he eats, eats, the car he drives drives,, e.g. are examples. Other economic utilities include roads, education and medical services. (iv)
thesee refe referr to the the benef benefit itss man man rece receiv ives es asso associ ciat ated ed Political Political utilities: utilities: - thes with political with political stability, national defence, security and internal stability.
(v)
Social utilities: - these are benefits attained through association with other people
e.g. sense of belonging, talking with other people and social contacts, provides man with some of his most gratifying experiences. (vi)
Religious Religious utilities: utilities: - helps man to find answers to questions on death, life,
morality and the universe. (vii)
hese hel help a man achi achiev evee his his des desires ires in art art and and Aesthetic Aesthetic utilities:utilities:- thes music.
(viii)
Time utilities: - compared with an individual effort, an organisation can make
available a good for use by an individual within a short time what would take years for an individual to manufacture. For example one individual would take years if not decades to make an aeroplane but through the use of an organisation, the same can be made within a year or less. (ix)
Place utilities: utilities: - these are benefits enjoyed by people who live in different
climates of goods produced in another climate for example an individual living in a cold climate e.g. Greenland is able to enjoy a cup of coffee grown in a hot climate. (x)
manufa fact ctur urer er who sell sellss a pick pick-u -up p vehi vehicl clee to a farm farmer er Form Form utilitie utilities: s: - a manu exemplifies this. The manufacturer converts raw materials into the form of the truck for the farmer who needs to know nothing about the manufacturing process. These utilities overlap. To some extent there can be a trade-off of utilities. In other words, more or less of some utilities can be traded for more or less of other utilities. For example economic utilities might be used with political utilities. In
similar version, a political utility can be used as a way of making an economic utility. (xi)
Organisations also store utilities: Organisations permit society to create and
stor storee adva advanc nces es in know knowle ledg dgee and and tech techno nolo logy gy and and to pass pass them them alon along g to succeeding generations; thus with organisations, it is not necessary to re- invent the wheel or other technological, social and cultural advances. This permits rapid and higher level of technological advancement as succeeding generations start from a higher level. (xii)
Organi Organisati sations ons enable enable human human beings beings to enjoy enjoy consum consumer er surplus surplus . Consumer
surplus is the difference between the total utility the consumer receives from a quantity of a good and the total rice he pays for that quantity. Let us explain this further. The law of diminishing marginal utility postulates that the first unit of a good has more utility than the second unit of a good For example suppose the utility of the first glass of milk to a hungry customer is kshs 30 while the utility of the second glass is Kshs 28 and so on as depicted in the table below. Customer surplus is the difference between the price he/she pays for the glass of milk and the utility of that glass of milk to the consumer.
Table l: Calculation of the Consumer Surplus Unit
Utilities
Price
numbers
(utils)
paid( kshs)
1 2 3 4 5 6 7 8
30 28 26 24 22 20 18 15
15 15 15 15 15 15 15 15 Total
(a) Other benefits of organisatio organisations ns
Consumer surplus( kshs
15 13 11 9 7 5 3 0 55
In addition to the benefits cited above organizations do provide the following other benefits •
They bring together resources to achieve desired goals and outcomes.
•
They are able to produce produc e goods and services efficiently.
•
They facilitate innovation and creativity.
•
They enable the use of modern technology.
•
Are able to adapt to and influence a changing environment.
•
They create value for owners, customers cu stomers and employees.
•
They accommodate on-going challenges and diversifying ethics and the motivation and coordination of employees. They are able able to accomm accommodat odatee and utiliz utilizee ethnic ethnic and other other divers diversiti ities es among among
•
organizational participants
1.7 Relationships in Organisations
In almo almost st all all orga organi niza zati tion onss the the foll follow owin ing g rela relati tion onsh ship ipss are are like likely ly to exis exist: t:
•
Accident Relationships
•
Parasitic Relationships
•
Mutual Relationships
•
Transcendental Relationships
•
Let us now briefly explain each of these;
1.7.1. Accidental Relationship.
This is an association in which no participant deliberately associates with another, yet from such an association benefits often accrue to at least one participant. For example a man who happens (without planning the association) to walk down the street of a crime ridden neighbourhood at the same time with a policeman is less likely to be hurt or robbed by his assailants because of his association with the policeman which occurred
merely by accident. In a business scenario, this can occur when an executive of a clothing store gets an idea for a new type of garment from two charting ladies in the street.
1.7.2 Parasitic Relationship
This type of relationship exists when one gains from an association at the expense of another. For example a flea gets its nourishment from its host- a dog, a cat or a human being. In a business organisation, a parasitic relationship exists when one organisation as a matter of policy receives support, advantage or service from another without payment or proper return.
At another level, a relationship where work is extracted for less than appropriate pay is parasitic. Another parasitic relationship can be demonstrated by firms which conspire to form a monopoly and charge unreasonable prices to customers.
1.7.3 One-Way Relationship
In this relationship, one party benefits without harming or helping the other. The one providing the benefit indifferently tolerates the one benefited. Here the relationship is deliberate at least on the part of the benefited one. An example is a business organisation that goes about its normal business while permitting itself to be observed by a student. However, for this relationship to be one- way, the organisation being researched must not expect any form of benefit- including a copy of research project.
1.7.4 Mutual Relationship
This relationship is both deliberate and mutual for both parties. Both parties expect to benefi benefitt from from this this associ associati ation. on. Most Most relati relationsh onships ips in nature nature are mutual mutual or mutual mutually ly beneficial. In most business organisations relationships are mutual. Both expect to make profit. In addition, the relationship between the organization and its employees is mutual.
1.7.5 Transcendental Relationship.
This type of relationship calls for much more than mutual. It requires the participants in the relationship to aspire for more than their individual benefit or profit. The participants
in a transcendental relationship aspire for benefits to accrue not only to him and his partner but also to other individuals, organisations and society not directly associated with the relationship. In a transcendental relationship, a person acts in such a way that his advantage will also be the other’s advantage rather than his advantage being other’s disadvantage disadvantage.. Achieving Achieving transcendent transcendental al relationshi relationships ps in organisatio organisations ns offers offers a great challen challenge ge in the human human societ society. y. Nevert Neverthel heless ess the advanta advantages ges are great. great. In nature nature,, transcendental relationships can be seen in animals when it leaves its meat (after being satisfied) to others. In the human society it requires an exceedingly high degree of personal personal honesty and responsibil responsibility ity which for some reason, God has not bestowed bestowed upon many humans.
1.8. Complexity of Organizations
Organizations are complex structures. This is because they are composed of complex bein beings gs in the the form form of human human bein beings gs.. Human Human being beingss brin bring g thei theirr dive divers rsit ity, y, thei their r temperament, and their attitudes in to the organization making quite a complex whole. Human beings are basic building blocks of organisations. Human beings are biological rather than machine systems Consequently, organisations are extremely complex systems far more complex than other systems. The human organisation has many characteristics of simpler systems but it also incorporates new forms o f complexity. The sources of these complexities are characteristics formed in human groups which include: o
Norms and values which are intangible and hard to detect.
o
Cultural dimensions such as music and art.
o
System elements (human beings) display awareness.
o
The structure of elements and roles continuously changes.
o
Inform Informati ation on is proces processed sed throug through h abstr abstract act forms forms of languag language, e, symbol symbolss and meaning systems.
Organisation managers must be sensitive to social system complexity if they are to understand and cope with organisational systems. In the human organisation, a large number of dimensions interact so that it is impossible to completely understand and
predi predict ct future future behavio behaviour. ur. These These dimens dimension ionss are interc interconn onnect ected ed so that that changin changing g one element affects the whole system.
1.9 Informal and Formal Organisations
Informal organizations that are also referred to as work g roups are: o
Formed in every formal organisation by its members.
o
Parallel to the formal organisation.
o
Are a shadows of the formal organization .
1.9.1 Why do Informal Organisations Arise?
In almost all organizations informal organizations exist to serve the following purposes: o
To satisfy social needs.
o
To provide a sense of belonging.
o
To provide information on approved behaviour.
o
To provide a sympathetic ear.
o
Assist individuals in meeting objectives.
o
To provide opportunity for influence and creativity. c reativity.
o
To enable members to perpetuate cultural values.
o
Provides the members with an additional channel of communication.
o
Provides satisfaction and stability to members.
o
Compensates for managerial limitations.
1.9.2 Comparison of Informal and the Formal Organisation. o
Goals. The informal organisation also has goals that could either be congruent to
those of the formal organisation or not. o
Norms. A norm is a standard of behaviour expected from group members. Formal
groups have norms and so do informal groups. However, the pressure to conform to the informal group member’s norms is greater.
Role. A role consists of the total pattern of expected behaviour. In the formal are to
o
orga organi nisa sati tion on,, it incl includ udes es but but goes goes beyo beyond nd the the offi offici cial al cont conten entt of the the job job a large large descri descripti ption. on. Inform Informal al group group member memberss are also expect expected ed to have have a role. role. Whether or not the informal group supports the role of group members, has a major impact on the role of members in the formal group. Leadership. In the formal organisation leaders (or managers) are appointed. The
o
formal group leaders emerge from the group; there is no formal title attached to the individual. formal al orga organi nisa sati tion on has has a stru struct ctur uree- an orga organi nisa sati tiona onall char chart, t, Structure . A form
o
hierarchica hierarchicall and horizontal horizontal differenti differentiation ation and formal formal coordinating coordinating mechanisms mechanisms..
In the informal organisation there is also a structure, with hierarchical levels and horizontal differentiations. However, there are no formal structures or coordinating mechanisms Differentiation is informal. Cohesiveness. This refers to the degree of attraction that the group has for each of
o
its its memb member ers. s. This This is impor importa tant nt in both both the the form formal al and and info inform rmal al orga organi nisa sati tion. on. Cohes Cohesiv iven enes esss is meas measur ured ed by such such thin things gs as loya loyalt lty y to the the grou group, p, feel feelin ing g of responsibi responsibility lity for a group effort, defending defending against against outside outside attach, attach, friendline friendliness, ss, e.t.c. In the informal group, cohesiveness is usually stronger. The size size of the the form formal al work work grou group p is dete determ rmin ined ed by the the need need of the the Size. The
o
organi organisat sation ion.. The size of the informal informal group is determ determine ined d by the size of the formal group. The size of the informal group is usually smaller. the form formal al grou group, p, the the conc concept ept of syne synerg rgis ism m achi achiev eves es grea greate ter r Synergis Synergism. m. In the
o
importance.
1.9.3 Benefits of the Informal Organisation •
Assists in accomplishing work in work in organizations.
•
Helps Helps to remo remove ve weakn weaknes esse sess in the the form formal al stru struct ctur uree e.g. e.g. wher wheree a mana manage ger r has give given n order orderss whic which h may may be incon inconsi sist sten entt with with organ organis isat atio ional nal needs needs eg. eg. 8.00 to 5.00 pm.
•
Leng Length then enss the the effe effect ctiv ivee span span of cont contro roll by exch exchan angi ging ng know knowle ledg dgee and and exper experie ienc ncee with within in the the group group,, work worker erss are are able able to lear learn n what what is expec expecte ted d of them without needing supervision.
•
Compens Compensate atess for violat violation ionss of formal formal organi organisat sation ion princi principle pless for exampl examplee a mana manage gerr may may need need the the help help of an empl employ oyee ee to achi achiev evee effi effici cien ency cy or effectiveness.
•
Provi Provide dess addi additi tiona onall chann channel elss of comm communi unica cati tion on to some some exte extent nt,, whic which h is t faster and accurate.
•
Provi Provide dess emot emotio ional nal supp suppor ortt to empl employ oyee eess whic which h is nece necess ssar ary y for for effi effici cien entt per perfo form rman ance ce for for empl employ oyee eess but but whic which h the the form formal al orga organi nisa sati tion on does does not not provide.
•
Encourages better management. The acceptance by managers of the fact that formal structures alone may not lead to efficiency in their organization.
1.9.4 Dysfunctions of Informal Organisations •
May work counter to the purposes of the formal organisations especially when the formal group goals are counter to the organisation’s goals.
•
Reduc Reduces es the the degr degree ee of produ product ctiv ivit ity y and and contr control ol by manag manager erss .Due .Due to the the influence of the informal group on members behaviour, the manager is unable f the to control the members, nor predict outcomes
•
Reduces Reduces the number number of practi practical cal altern alternati atives. ves. The solida solidarit rity y develo developed ped in the inform informal al groups groups streng strengthe thens ns their their cohesiv cohesivene eness ss and thus thus reduce reducess manage manager’s r’s ability to change the groups of workers.
•
Increases the time required to complete activities. Informal workgroup behaviour such as gossiping, consultations, long coffee breaks, e.t.c are time consuming and can lead to delay in task completion.
•
Resistance to change. To the extent that change can affect informal groups they will resist change. Therefore assuming change is functional, then any resistance to the change is dysfunctional. o
Source of rumours.
o
Group conformity to unacceptable standards.
1.9.5 Managing Informal Organisations. When Managin Managing g Organiz Organizatio ations ns Manager Managerss should should be Guided Guided by the Followi Following ng Principles; o
Compatibility Try to set organizational goals that are compatible with those of the
members of the informal group o
o
Influence. Try to influence the informal group members rather than forcing Togetherness. Try to work together with the informal group members for the s not
interests of both the formal and the informal organizations.
1.9.6 Characteristics of Informal Organizations. Standards Standards of behaviour. behaviour. Just as formal formal groups groups develop develop laws, taboos and beliefs beliefs about
what is right and wrong so does the informal group.
Informal groups apply pressure pressure to members members to conform to group Pressure to conform. Informal norms.
Informal leadership. leadership. Informal groups have leaders who guide and direct the members
through persuasion and influence.
Status systems. Informal groups also display status differences. Status is a differentiation
of social position from associates. It is the amount of prestige a person has and defines the person’s position in terms of importance in the group. Status depends upon the following factors: a) External factors- these are factors that the individual brings to the organisation. Such
as sex, education, age ethnicity and personality.
b) Internal factors- These are determined by the job one has e.g. job title, pay, and work schedule.
LECTURE TWO EVOLUTION OF ORGANIZATION THEORY
2.1 Introduction
In this this lectur lecturee we shall shall trace trace the developme development nt of organi organizat zation ion theory theory from the pre classi classical cal period period to the present. present. We shall shall discus discusss the classi classical cal theori theories es then then the neo classi classical cal theori theories es after after which which we shall shall briefl briefly y touch touch on some some modern modern theori theories es and principles of managing organizations
2.3 Pre-classical Period
The evolution of organization can be traced from the following periods:
The Pyramids of Egypt
The pyramids of Egypt could not have been completed without sophisticated organization practices and structures of the modern period. pe riod.
The Chinese Empire
The construction of the Great Wall of China could not have been accomplished without the sophisticated administrative and bureaucratic structures we know today.
The Catholic Church
The Catholic Church has also practiced many elements of classical theories for over two thousand years.
The Roman Empire
The extensive bureaucracy of the Roman Empire could not have been maintained in such a form and for such a long time without the application of a management theory that we know today.
2.4 The Classical Theories
The classical theories were developed in three streams/approaches namely: a) The The Admin Adminis istr trat ativ ivee theor theory y b) The theory theory of Bureau Bureaucra cracy cy c) The Scient Scientifi ificc Manage Managemen mentt Theor Theory y
2.4.1. Administrative Theory:
This theory was largely developed by Henri Fayol (1841 1925) who was a French industrialist. He described a number of management principles that go towards capturing the entire flavor of the administrati administrative ve theory of management. management. Some of those principles principles are: •
Division of work (or specialization): One should work at activities in which
he/she has comparatively higher skills. This should lead to higher productivity. •
Authority Authority and responsibility responsibility Authority is the right to give orders. Each person
should should have an approp appropria riate te author authorit ity y to go with with the given given respo responsi nsibil bility ity.. Responsibility is the task to be accomplished. •
Discipline There must be respect and obedience to the rules and objectives of the
organization. •
Unity of Command To reduce confusion and conflicts each member should
receive orders from and be responsible to only one superior. •
organization is effective effective when members members work together together b Unity of direction An organization towards the same objective.
•
Subordination of individual interest to general interest The interests of one
employee or group of employees should not prevail over that of the organization. Rather, the general interest must be maintained as paramount. •
Remuneration of personnel should be fair -not exploitative, and should reward
good performance.
•
Centralization - A good balance should be found between centralization and
decentralization. •
Scalar Chain-There Chain-There is a scalar chain or hierarchy dictated by the unity of
command linking members of the organization from the top to the bottom. •
Kindlines nesss and justi justice, ce, largel largely y based based on predet predeterm ermine ined d convent convention ions, s, Equity Kindli should prevail in the organization.
• •
Stability of tenure of personnel Job security should reward good performance. Initiative A manager who has initiative, and can get others junior to him to do it,
is far superior to the one who does not have this ability. •
Esprit de corps “Unity is Strength” Superior performance comes from working
togeth together; er; thus, thus, everyo everyone ne in the organi organizat zation ion should should be encour encourage aged d to work work together and have a sense of belonging. •
Technical Technical ability Technical ability predominates lower down the ladder and
management ability higher up. •
emphas asiz ized ed the the impo import rtan ance ce of plan planni ning ng,, organ organiz izin ing g comma command ndin ing, g, Fayol emph coordination and controlling in organizations.
•
Fayol recommend rational selection of and training of workers together with
professional training for managers.
2.4.2 The Theory of Bureaucracy
The theory of bureaucracy was developed by sociologists who took a relatively scholarly descriptive point of view. The most famous of those sociologists was Max Weber (1864 -1920) who was a German Sociologist. He published most of his works towards the end of the 19th Century. Max Weber identified identified the following following as the, main characteri characteristics stics of bureaucracy: •
Labor is divided so that the authority and responsibility of each member is clearly defined.
•
Offices Offices or positions positions are organized in a hierarchy of authority resulting resulting in a chain of command.
•
All organization’s members are to be selected on the basis of technical qualifications through formal examinations or by virtue of training or edu cation.
•
Officials are appointed not elected.
•
Administrative officials work for salaries and are career people.
• •
The officials are separate from owners how The officials are subject to strict rules and controls regarding the conduct of their official duties. Those rules are impersonal and uniformly applied to all people and cases.
The above specifications by Max Weber were necessary because during this period and before, most organizations were managed on a “personal” family like basis. Employees were were loya loyall to an indi indivi vidu dual al rath rather er than than to the the orga organi niza zati tion on or its its miss missio ion. n. The The dysfun dysfuncti ctional onal conseque consequence ncess of the practi practice ce were were that that resour resources ces were were used used to realiz realizee individual desires and goals rather than organizational goals and needs. Employees in effect owned the organization and used resources for their own rather than to serve customers and organizations.
Max Weber envisaged organizations that would be managed on an impersonal basis. He called called this form of an organizati organization on bureaucracy bureaucracy.. Max believed that organizations organizations that exhibited the characteristics that he described would be more efficient and adaptable to change.
2.4.3 Scientific Management Theory
First developed by Fredrick W. Taylor (1856 -1915), a mechanical engineer in the United States, the Scientific Management can be defined as:
•
The application of scientific method of study, analysis and problem solving to organizational problems. Or
•
A set of mechanisms or techniques for improving organizational problems.
Scientific Management focuses its unit of analysis on the physical activities of work. Scientific management deals with the relationship of a worker and his or her work. Thus, this this lays lays emphas emphasis is on man-ma man-machi chine ne relati relations onship hipss with with the object objective ive of improv improving ing performance of routine, repetitive production tasks. Scientific management advocates for an empirical detailed study of each job to determine
how it could be done do ne most efficiently.
The basic assumptions of scientific management theory are: •
Impr Improv oved ed resu result ltss in orga organi niza zati tion onss will will come come from from the the appl applic icat atio ion n of the the scient scientif ific ic methods methods of analys analysis is to organi organizat zation ional al proble problems. ms. In other other words, words, the the scie scient ntif ific ic mana manage geme ment nt appr approa oach ch hold holdss that that scie scient ntif ific ic solu soluti tion onss to probl problems ems of managem management ent of organi organizat zation ionss are superi superior or to those those of other other approaches.
•
Scie Scient ntif ific ic manag managem ement ent focu focuse sess prim primar aril ily y on work work itse itself lf and not not on the the particular person doing the work.
•
Each Each work worker er is assu assume med d to be a clas classi sica call econ econom omic ic manman-in inte tere rest sted ed in maxi maximi mizi zing ng his his monet monetar ary y incom income. e. The The compl complic icat atio ions ns of emot emotio ional nal and and social actions and reactions of persons in organizations are not emphasized.
The basic principles of scientific management as expounded by Fredrick W. Taylor are as follows: •
Devel Develop op a scie scienc ncee for for each each elem elemen entt of man’ man’ss work work in orde orderr to maxi maximi mize ze the the organizations output.
•
Scientifically select and then train, teach and develop the worker.
•
Management should heartily cooperate with the workers so as to ensure all the work is being done in accordance with the principles of science.
There is almost equal division of the work and responsibility between management
•
and the workers. The management should take over all work for which they are better fitted than the workers, and the workers should should do the work for which they are better fitted.
Application of the piece rate principle: This is the principle by which workers are paid
by piece rates on the basis of standards set by motion and time studies rather than on other basis. Piece rates are effective in motivating workers. Tailor Tailor’s ’s piece piece rate rate syste system m was called called the differ different ential ial piece piece rate rate syste system. m. Under this system, workers were paid a low piece rate up to a standard (a standard was based on a first class man performing under average conditions). At higher levels of output the worker was paid a higher rate. Tail Tailor or’s ’s reco recomm mmen enda dati tion onss were were desi design gned ed to redu reduce ce the the inef ineffi fici cien enci cies es and and the the waste wastefu fuln lnes esss of the the past past thro through ugh prac practi tici cing ng scie scient ntif ific ic rath rather er than than rule rule of thum thumb b methods.
2.4.4. Comparison of the Classical Theories
i.
The theories were mainly developed during the early part of the 20Th century.
ii. ii.
The The thre threee stre stream amss were were form formed ed on sim simil ilar ar assu assump mpti tions ons abo about ut organ organiz izat atio ions ns organ organiz izat atio ions ns as a stru struct ctur uree of rela relati tions onshi hips ps of human human bein beings gs with with goal goals, s, objectives, roles, activities, activities, power etc that exist when persons work together.
iii iii.
Thei Theirr main ain goal goal was was to find find out out what what need needss to be made made to organ organiizati zation on structures and relationships to improve efficiency in the organizations.
iv.
They considered the environment to be either static or to have an insignificant role in organizational efficiency
However the three approaches had the following dissimilarities:
i.
They were ere deve eveloped ped by separ parate groups ups of writers workin king totall ally independently of each other:
ii.
Bureaucracy acy dev developed ped mainly by sociologi ogists who gener nerally took a scholarly point of view.
iii. iii.
Admi Admini nist stra rati tive ve theory theory and scient scientif ific ic manage manageme ment nt develo develope ped d by write writers rs who were were prac practi tici cing ng mana manage gers rs;; they they were were not not mere merely ly cont conten entt at desc descri ribi bing ng organi organizati zations ons;; they they prescr prescribe ibed d practi practical cal purpos purposes es for better better organi organizat zation ional al performances.
iv. iv.
Admi Admini nist stra rati tive ve theori theories es focuse focused d on overal overalll rela relati tivel vely y macr macro o aspe aspect ctss of levels levels organization organizations. s. The scientific scientific management management theory looked at the micro aspects — the worker, and the foreman. Bureaucracy also looked at the macro aspects of the organization.
2.4.5 Evaluation of the Classical Theories The Administrative theory
1. The The pri princip nciplles of of administration administration as postulated by Henri Fayol fail to be universal truths. 2. The princip principles les lack lack scientif scientific ic derivatio derivation n and verifi verification cation.. 3. The adminis administra trati tive ve theory is power center centered. ed. It is thus in philosop philosophic hical al conflict conflict with those who desire limited individualism. 4.
Admini Administr strati ative ve theory suffer sufferss from the dysfunct dysfunction ionss of bureauc bureaucrac racy y such such as lion rigidity, impersonality, and excessive ca tegorization.
5.
Administrative theory suffers from superficiality, oversimplification and lack of realism. It is satisfied with theoretical rather than actual.
However, as a theory of organization, the Administrative theory is critical because: (i) It recognizes the need for: •
Specialization
•
Unity of command
•
Discipline
•
Separation of individual and organization interest.
(ii) (ii) It also also intr introdu oduce cess esse essent ntia iall prin princi cipl ples es that that even even today today lead lead to organ organiz izat atio ion n efficiency.
The theory of bureaucracy
1. Most Most of the the char charact acter eris isti tics cs desc descri ribe bed d by Max Max We Webe berr trul truly y desc descri ribe be an ideal ideal organization. They described what should be rather than what is. However, to the extent that organizations aspire to achieve the characteristics described by Max Weber, their efficiency and effectiveness can be maintained. 2. Some Some of the aspects aspects envisag envisaged ed by Weber, Weber, however, however, have have sometime sometimess taken on a negative meaning .e.g. being associated with endless rules and red tape.
The Scientific Management Theory
The basic problem with the scientific management theory is that it assumed man to be purely an economic man interested only in the satisfaction of his basic needs. His rationality and motivation were purely financial/materialistic. These assumptions were not realistic and man was motivated by more than his basic needs as later proved by the neo classists.
2.4. 2.4.6 6 Wh What at Pres Prescr crip ipti tion on did did Each Each Th Theo eory ry have have on how how to Be Best st Stru Struct ctur uree Organizations? The Scientific Management Theory
Scientific way to do work
Scientific selection of personnel
Financial incentives Separation of management and workers
The theory of Bureaucracy
Contribution to organization theory •
well defined hierarchy of authority
•
A clear division of
• •
A system of rules covering rights and duties of each position A system of procedures dealing with work situation
•
Recommended impersonality of inter personal relationship
•
Selection /promotion based on technical competence.
Criticisms
i.
Lack Lack of empi empirrical ical evi evidenc dences es
ii. ii.
Assu Assum med peop peoplle are are mach machiines nes
iii. iii.
Igno Ignore red d prac practi tica call situ situat atio ions ns
2.4.7. Wh What at Pres Prescr crip ipti tion onss did did each each Th Theo eori rist st ‘hav ‘havee for, for, how how to Be Best st En Ensu sure re Compliance — to ensure in other words that each worker carried out the task to which he or she is assigned?
Scientific Management Theory
Standards
Procedures
Incentives
Administrative theory
Discipline
Unity of command
Bureaucracy
Rules and procedures Hierarchy of authority
2.4.8 What was the Environment of the Organizations that Theorist Focused on.?
i.e. what influenced the theorists to make the type of recommendations that they made.
The tasks facing workers then were relatively routine and repetitive
Effici Efficienc ency y rather rather than than creati creativit vity y was the rule rule conseq consequent uently, ly, the theori theorists sts were were justi justifie fied d in making making the type of recomm recommenda endatio tions ns that that they they made made about about how to perform those tasks.
What was it about the environment of the organizations each theorist focused on that influenced the prescriptions for how to structure organizations and gain compliance?
•
During During the time, time, the organi organizat zation ionss enviro environme nments nts were were relati relatively vely simple simple and unchanging.
•
Technology was generally static over long periods
•
Political environment was also stable
•
Equality and democratic ideas were developing
This type of environment motivated organization theorists to come up with the type of proposals they came up with on how to structure organizations and to motivate workers.
2.5. The Neo Classical Theories
The neo classical theories are based on the classical theories. They seek to address the shortcomings of the classical theories. A4 few of the neo classical theories are discussed here below.
2.5.1. The Hawthorne Experiments
The experiments were carried out between 1927 and 1933 at the Chicago Hawthorne plant of the Western Electric Company: Four studies were carried o ut namely:
a) The illumination studies
Thes Thesee studi studies es were were expec expecte ted d to dete determ rmin inee the the rela relati tion onsh ship ip betw betwee een n the the leve levell of illumination and worker’s productivity. It was expected that worker’s productivity would incr increa ease se with with incr increas easin ing g leve levels ls of illu illumi mina nati tion on.. The The stud studie iess fail failed ed to prov provee any any relationship between worker’s productivity and level of illumination
b) The Relay Assembly Test Room Studies
Thes Thesee studi studies es were were carr carrie ied d out to dete determ rmin inee the the rela relati tions onshi hip p betw betwee een n work worker er’s ’s productivity and improved benefits and working conditions. The studies found out that there was no cause - and - effect relationship between working conditions and output. Rather, there were other factors that affected worker’s output such as his/her attitudes and supervisor behavior.
c) The Interviewing Program
A group of employees were interviewed to learn more about their opinions with respect to their their work, work, workin working g condit condition ionss and superv supervisi ision. on. The worker workerss sugges suggested ted that: that:
•
Psychological factors help determine whether a worker is satisfied or dissatisfied in any particular work situation
•
The person’s person’s need for self-actu self-actualizat alization ion determines determines his/her satisfaction satisfaction in the work.
•
A perso person’ n’ss work work grou group p and and his his rela relati tion onsh ship ip to it, it, also also dete determ rmin ines es his/ his/he her r productivity
d) The Bank Wiring Room Studies
This study was expected to study the effect of group influence on workers productivity. The researchers found out that an informal grouping and relationship was a critical factor in the workers’ productivity. The informal group determined the group’s productivity, and func functi tion oned ed as a prot protect ectiv ivee mech mechani anism sm (ser (serve ved d both both for for inte intern rnal al and and exter externa nall purposes).
The Hawthorne Experiments concluded that: i.
An indu indust stri rial al organ organiz izat atio ion n is a soci socio o tech techni nica call syst system em.. The The soci socio o part part is the huma human n aspec aspects ts that that need need to be take taken n care care of in order order to incr increa ease se work worker ers’ s’ productivity and the technical system are the physical aspects that also need to be improved.
ii.
Emplo ployee att attitudes and mora orale are also import ortant as det determinant nantss of productivity.
iii. iii.
Other Other factor factorss includ includee worker’ worker’ss person personali ality ty and super supervis visor’ or’ss behavio behavior. r. These These two also affect worker’s altitude and morale.
iv. iv.
A wor worker ker’s soci ocial group group has a prev prevai ailling effe effect ct on his his or her alt altitude tude and and productivity.
Criticisms of the Hawthorne studies
1.
The The phil philos osop ophi hica call basi basiss By emphasizing the social needs of human being rather than the economic needs and self-interest, these studies conflict the philosophical basis of economic theory.
2.
Methodolo ology The study methodology lacks the basis for generalizations.
3.
Findings The cause - and - effect relationship conclusions lack general support and scientific verifiability.
Contribution
The Hawthorne Studies have however made the following contribution to Organization theory
As a basis for organization theory Research, the Experiments were important. They were some of the earliest scientific studies in human b ehavior.
Their finding on the importance of informal groups is also a key to organization theory.
Their emphasis on employee altitude towards work as an additional to other factors was a breakthrough in organization theory.
2.5.2 Mary Parker Follet
She was a philosopher and political scientist. She was also a social worker among the poor in Boston. She proposed the following principles:
•
Emphasized the importance of subordinating individual freedom to that of the group
•
Stressed the importance of democracy in decision making -by involving all in order to find a solution. Recommended the use of power with rather than power over. Observed that Power cannot be delegated but authority can. Power is the capacity to get things done. Authority is the right to give orders. Power should be exercised with rather than over. Power over is dominance or control, based on force. Power with is a jointly developed power. She emphasized that power is a basic to management especially when used with.
•
Defined conflict as the difference in opinion or interests. She emphasized that conflict cannot be avoided, and therefore must be used to manage organizations. Noted that there are three ways of managing conflict:
Dominance - one side wins over the other Compromise - each side gains something to settle the conflict; also
each each side side loses loses someth something ing.. In both both domina dominance nce and compro compromis mise, e, the basic causes of conflict are not settled. Follet recommends a third way.
Integration of desires. In this way a solution that fully meets the goals
of each party in a dispute is found. Both parties get what they want. Neither party gives up anything. Integration lets the parties creatively discover alternatives that satisfy both parties in conflict. In integration, conflict is used to creatively discover alternatives that satisfy both parties.
Follet also brought a new way of looking at leadership. She defined a leader as one with a vision vision of the future future and can articu articulat latee the common common purpos purposes es toward towardss which which the organization is striving. The leader focuses the energies of people towards that purpose. A leader not only knows the technical aspects of his job, but also understands the total situation and the relationship among its many parties. Leaders also train and develop their followers.
2.53 Chester Barnard
Barnard was writing in the 1 930s
Was the President of New Jersey Bill Telephone Company Contributed to organization theory in three areas: i.
the the imp impor orta tanc ncee of indi indivi vidu dual al beha behavi vior or
ii.
theo heory of compliance
iii. iii.
theo theory ry of orga organi niza zati tion on str struc uctu ture re
1. The importance of the individual
-
Bernar Bernard d was the first first person person after after the Hawtho Hawthorne rne studie studiess to emphas emphasize ize the importance and variability of the individual in the work setting. He emphasized that an essential element in organizations is the willingness of
-
persons to contribute their individual effort to the organization.
-
The individual is always the basic strategic factor in organizations.
-
Consequently the individual regardless of his history or his obligations must be induced to cooperate or there cannot be cooperation.
2. Barnard’s Theory of Compliance
Barnard’s theory of compliance consisted of four basic elements. i.
the willingne gness to cooper perate is a bas basic eleme ement of the individual ual in the organization
ii.
in comply complying ing,, the indi individ vidual ual surre surrende nders rs his his person personal al prefe preferen rences ces i.e. i.e. surre surrende nderr or foregoes other preferences in order to comply in an organization.
iii. iii.
An indi individ vidual ual is is only only wil willin ling g to comp comply ly if if he is suff suffici icient ently ly induc induced. ed.
iv.
The leve level/q l/quant uantit ity y of induc induceme ements nts determ determine iness his his degre degreee of comp compli liance ance..
Barn arnard
note oted
that
material
incentives ves
by
thems emselves
are
not
enough.
Other incentives include: •
Opportunities for distinction
•
Prestige
•
Personal power
•
Coercion (i.e. sometimes force is necessary to obtain compliance).
3. Barnard’s theory of organization structure
-
Emphasized that the organization was a structure of decision makers
-
Stressed the importance of communication in organizations
-
Stressed the role and importance of informal organizations in communication and cohesiveness
-
He was also one of the first organization theorists to take a system’s view of organizations.
2.5.4 The basic Elements of the Neo-Classical Theories were:
i.
Indi Indivi vidua duall needs needs.. Reco Recogn gniz izes es the exist existen ence ce of, and the varia variabi bili lity ty of indivi individu dual al needs, and characteristics e.g. feeling, emotions, and perceptions.
ii.
Work Work Groups Groups-- recogn recognize izess the exis existen tence ce and and the impo import rtance ance of of inform informal al group groupss in organizations.
iii. iii.
Part Partic icip ipat ator ory y Managem Management ent - emphas emphasiz izes es the need need of invol involvi ving ng emplo employe yees es in decision making especially on things that affect them.
2.6. The Information Processing Theory
i.
The The Info Inform rmat atio ion n Proc Proces essi sing ng theor theory y view viewss orga organi niza zati tions ons as open syst system emss whic which h face two basic situations a)
Enviro Environme nmental ntal thre threats ats and and uncertai uncertainti nties es
b) b) Task Task unce uncerrtaint aintyy- thi this is the the dif differ ference ence bet between ween the the amou amount nt of inform informati ation on already already posses possessed sed by the organi organizat zation ion and the amount amount of information required to perform the task.
i.e. Task uncertainty Information required to perform the task MINUS the information already possessed by the organization.
ii. ii.
The The orga organi niza zati tion on must must have have the the mech mechan anis ism m and be stru struct ctur ured ed in such such a way that it can diagnose the information it has, and the information required. In
par parti ticu cular lar the the orga organi niza zati tion on must must be able able to gath gather er,, inte interp rpre ret, t, and use use the the appropriate information in order to reduce this task u ncertainty iii. iii.
The The seco second nd assu assump mpti tion on of the the info inform rmat atio ion n proc proces essi sing ng theo theory ry is that that given given the various sources of uncertainty a basic function of organization structure is to create the most appropriate configuration of work units (as well as the linkag linkages es betwee between n them) them) to facil facilita itate te the effect effective ive collec collectio tion, n, proces processin sing g and set distribution of information.
iv. iv.
The The third third assu assump mpti tion on of the the theory theory deal dealss with with the sub sub syste systems ms or the the various various ma departments of an organization. Because the sub systems have different degrees of differ different entiat iation ion (that (that is to say they they have differ different ent time time perspe perspecti ctives ves,, goals, goals, technology etc) the important question is not what the over all organization should be but rather what are the optimal structures for structures for the the different sub units within the organization.
v.
The inform informati ation on proc process essing ing theory theory views views the the organi organizat zation ion as havi having ng the tasks of the organization vary in their degrees of their uncertainty as work related uncertainty increases, so does the need for increased amount of information and thus the need for increased information processing capacity an
organ ganization
wil will
be
more
effective
when
ther here
is
a
match
between the information information processing requirements facing the organization and the information processing capacity of the organization if an orga organi niza zati tion on ( or sub sub unit units) s) face face diff differ eren entt cond condit itio ions ns over over time time more more effe effect ctiv ivee unit unitss will will adap adaptt thei theirr stru struct ctur ures es to meet meet the the chan changed ged a way information requirements
2.7 The Contingency Theories
The contingency theories relate to how the organization structure adjusts to fit with both the internal environment environment such as work technology technology and the external environment environment such as given economic or political legal.
Contingency means that one thing depends upon another thing or that one characteristic depends upon another characteristic. What works in one setting may not work in another
setting. There are no universal principles that app ly to every organization. There is no one on e
best way. Contingency theory means it depends. The most efficient organization structure
various may be contingent upon the size, technology, strategy and since organizations are open differ different ent syste systems, ms, its enviro environme nment. nt. These These contin contingenc gency y factor factorss are discus discussed sed in chapters 6 and 7.
The Population Ecology Theory
The Population- Ecology theory can be explained by the following characteristics:
The The carr carryi ying ng capa capaci city ty of the the envir environ onme ment nt is limi limite ted. d. An exce excess ss popul populat atio ion n of organizations leads to congestion and subsequently to the survival of only those organizations successful in creating a niche in the market place. Like Like biolog biologica icall elemen elements ts organi organizat zation ionss are doomed to die unless unless they meet meet the envi enviro ronm nmen enta tall test test of fitn fitnes ess. s. Envi Enviro ronm nmen enta tall forc forces es sele select ct out out the the most most appr approp opri riat atee stru struct ctur ural al form formss for for surv surviv ival al from from amon among g popu popula lati tion onss of crea crease sed d orga organi niza zati tions ons on the the basi basiss of fit fit betw betwee een n stru struct ctur ural al attr attrib ibut utes es and and environmental characteristics. The population- ecology theory shifts away from preoccupation with organization at the individual level towards population level. It is not the fitness of any single organization that is of interest. It is the group or groups of organizations and they may be influenced by actions and events with which they have no obvious or direct links Management has no effect in deciding whether or not the organization will survive or die. die.
Envi Envirronme onment ntal al
fact factor orss
solel olely y
organization.
Criticism of the Population Ecology Theory
det determ ermine ine
the the
survi urviva vall
of
any any
The Population- Ecology theory is not without problems. The following has been cited as the major weaknesses of the theory: The The clai claim m that that the the orga organi niza zati tion ons’ s’ exis existe tenc ncee and and surv surviv ival al is dete determ rmin ined ed by the the environments’ carrying capacity means that the theory cannot b e used to predict about the the futu future re.. This This is becau because se the the conce concept pt of envir environ onme ment ntal al carr carryi ying ng capac capacit ity y is immeasurable and cannot be estimated. It can only be measured on ex post or retrospective basis. Thus the theory cannot be used to make organizations adapt to their environment and therefore ensure survival. Thus as an organization theory it is therefore inappropriate. The concept of fitness is not clearly defined by the theory. In other words it is insufficient to state that only those organizations that environment determines as fit survive. To do so would be tautological. A more meaningful and causal pattern must be presented for a theory to be acceptable. To claim claim that that organi organizat zation ionss are like like biolog biologica icall organi organisms sms also also ignore ignoress the fact fact that that organizations are created by men- a biological organism- to meet its objective. To clai claim m that that a biol biolog ogic ical al organ organis isms ms,, man, man, can crea create te a biol biologi ogica call orga organi nism sm,, an organization, endows man with supernatural powers. The population ecology theory also ignores the role of managerial managerial decision makers. To assume assume or argue argue that that manager managerss should should be passiv passive, e, helple helpless ss elemen elements ts comple completel tely y dependent dependent on environmental environmental forces is to denigrate denigrate the important important role managers managers can play in determining the success or failure of an organization.
Definition of Goals
An organizational goal is a desired state of affairs which the organization attempts to realize. It is that future state of affairs which the organization as a collectivity is trying to bring about. It can also be b e defined as a state of affairs or situations which does not exist at present but is intended to be brought into existence in the future by the activities of the organization. A goal or purpose is an unrealized state or condition that the members deem desirable.
All organizations are established for a purpose. This purpose may be referred to as a goal
or mission. Different parts of the organization establish their own goals and objectives to hel help them hem meet eet the the over overal alll goal goal,, missi ission on or purp purpo ose of the the orga organi niza zattion. ion. The overall goal for an organization is often called the mission the organization’s reason for existence. existence. The mission describes describes the organization’s organization’s vision, its shared shared values and beliefs, and its reason for being.
The missio mission n is someti sometimes mes called called the offici official al goals, goals, which which are the formal formally ly stated stated definition of business scope and outcomes, the organization is trying to achieve. Official goal statem statement entss typic typicall ally y define define busine business ss operat operation ionss and they they may focus focus on values values,, markets, markets, and customers customers that distinguis distinguish h the organizatio organization. n. Whether Whether called called a mission mission statement or official goals, the organization’s general statement of its purpose philosophy is written down in a policy manual or the annual report.
In each of the above definitions, it is important to note that there are two elements that goals describe. These elements are:
Future desired end results to which Present efforts arte directed
Both the terms “goals” and “objectives” are considered to have the same meaning in this context. Other aspects of goals are the following;
Goals are Ideal States
Goals represent targets established at certain points in time therefore it is inevitable that actual actual perfor performan mance ce of organi organisat sation ion tends tends to be less less consis consisten tentt and less less perfec perfectt than than anticipated.
Sometimes the goals may be too low, harmful or otherwise misplaced.
Thus it would be meaningless to evaluate organisations in terms of effectiveness using such types of goals.
Most organiz organizatio ations ns are multifu multifuncti nctional onal and the they y general generally ly seek to accompl accomplish ish several different goals at the same time.
The realisation of one goal may inhibit the attainment of another. For instance, a high rate pr of return may be well achieved at the expense of long-term organizational growth. Thus, effectiveness in the attainment of one goal may be inversely related to effectiveness in b) attainment of another.
Assessment of effectiveness on the basis of goal attainment depends upon the extent to which goals are measurable.
Whil Whilee some some goal goalss are are easi easily ly meas measur urab able le e.g. e.g. sale sales, s, numb number er of produ product ctio ion n units units,, profi profitab tabili ility, ty, many many organi organisat sation ionss do not have have such such identi identifia fiable ble object objective ives. s. Servic Servicee organisations such as social welfare agencies and voluntary associations are examples of organisations with non-measurable goals.
Interpretation of some goals is also subject to wide differences of interpretation
Despite such problems however, the goal attainment remain an important measure of (organizational effectiveness.
3.4. Official and Operative Goals a) Official goals refer to:
The formally stated outcomes that the organisation states it is trying to achieve. What the organization should be doing, the reason it exists and the values that underlie its existence Aims normally written down in a policy manual in a charter or in the annual report. Goals emphasised in public pronouncements by the top officials of the organizations. Goals that describe a value system.
Goals Goals that that serve serve the purpos purposee of legiti legitimis mising ing the organi organisat sation ion to the variou variouss parties such as customers, taxpayers, suppliers and employees.
Official goals are therefore the general purposes of the organization as put forth in the
charter, annual reports, public statements by key executives, and other authoritative pronouncements. b) Operative goals on the other hand represent the real aims of the organisation. They:
Desi Design gnat atee the the end end resu result ltss soug sought ht thro throug ugh h the the actu actual al oper operat atin ing g poli polici cies es of the organisation. Tell Tell what hat the orga organi nisa sattion ion is act actual ually trying ying to do regar egardl dles esss of what what the the official goals say are the aims. Describe desired operational activities and are often co ncerned with the short run
Operative goals designate the end results sought through the actual operating procedures of the organization and explain what the organization is actually trying to do. Operative goals describe specific measurable outcomes and are often concerned with the short run. Operati Operative ve goals goals repres represent ent actual actual goals, goals, while while offici official al goals goals repres represent ent stated stated goals. goals. Operative goals pertain to the primary tasks an organization must perform. These goals concern concern overal overalll perfor performan mance, ce, boundar boundary y spanni spanning, ng, and mainte maintenanc nance, e, adaptat adaptation ion,, and production activities
Operative Operative goals are therefore the ends bought through the actual operating policies of
the organization; they tell us what the organization is actually trying to do regardless of what the official goals say are the the aims.
prisons. The prisons in An example of an official goal is the one often stated regarding regarding prisons. most countries are said to have the official goal of rehabilitating the prisoner. However in actual practice the operative goal is to provide custodial care and to punish the offender. Official goals perform an important role in organizations. They give the organization a favorable image and thus provide a source of legitimacy and hence justify its activities.
However, most organizations end up practicing operative goals rather than official goals because: Organizational members lack knowledge of wha t the organization’s official goals are. Perceptions about how best to accomplish official goals differ between the different organizational participants. Stated official goals cannot be achieved for financial and other reasons. The operati operative ve goals goals of an organi organizat zation ion are the outcom outcomee of comple complex x exchang exchanges es between individuals and groups pursuing a diversity of aims. While the official goals of an organization may remain unchanged over time, the operat operative ive goals goals of an organi organizat zation ion at differ different ent points points in time time may well vary vary substantially as a sequence of the exchanges between the individuals. Some organizations also puipose1y puipose1y avoid articulati articulating ng specific goals so as not to attract potential competition or become a focus of opposition groups.
3.5 Types of Goals
There are many ways of classifying goals, one way, discussed by Perrow, classifies goals into five categories’ according to “whose point of view is being recognized”, that of society, society, the customer, customer, the investor, investor, the top executive or others. others. Thus organizations organizations may be said to have: Societal goals: The point of view recognized here is that of society in general. Societal
‘goals relate to the goods produced and services provided by an organization to enhance general welfare, maintain order, and generate and maintain cultural values eing recogniz nized her here is that of the Outpu Ou tputt goals: goals: The point of view bein public for which goods are produced or services provided. Examples would be the creation of consumer products, business services health care, and education programs. System goals: The point of view being recognized here is that of the organization itself and the manner in which it functions, independent of the goods it produces or services it renders. Examples would be the goals of growth, stability, and profit and market share.
Product Goals: The point of view being recognized here is that of the actual good or
service which is produced or provided. Product goals relate to the characteristics (quality, styling, uniqueness, variety) of the goods and services in question. Derived Goals: The point of view being recognized here is that of the top management
of an organization, and what it chooses to do with the power and resources it accumulates while pursuing other goals. For example top management may use its power and wealth to further certain political aims, or to support the arts or higher education, or to contribute to the personal development of its employees.
You could also classify goals to help you catalogue what you know about goals and the goals role they play in organizational life. One scheme of classifying goals was proposed by R.C. Davis in his classic. The Fundamentals of Top Management. A summary is may presented in Table 2.1 below.
Table 2.1 Classification of Objectives
Type
of Focus
Serves
Example
Objective
Primary
Seco Second ndar ary y
Short Term
Production
and Primary
distribution of goods and beneficiary
by 10% by end of fiscal year
services,
1990.
Supp Suppor ortt
groups.
funct functio ions ns
to Secondary
To meet meet all major major occupat occupation ional al
achiev achievee product production ion and beneficiary
safety
distribution of goods and groups.
(OSHA) by 1990.
services. One year
or
accounting cycle, Long Long Term Term
To incr increa ease se sale saless of widge widgets ts
less Primary secondary
groups. Two Two to twen twenty ty year yearss or Prim Primar ary y
and
health
standards
and To reduce the number of quality control rejects by 20% within the next 12 months. and and To incr increa ease se mark market et shar sharee to 31% 31%
more. Equilibrium
secondary
groups. Maintain status quo with Primary environment,
Improvement
Increase efficiency
Explicit
effectiveness, Publicly Publicly stated. stated.
(formal Official) Implicit
What hat
peop peoplle
(operational,
work toward.
by
1995.
and To maintain market share at 10%
secondary groups. operating Primary
January
through 1995. and To
and secondary
reduce
electrical
cons consum umpt ptio ion n (Ksh (Kshs. s.)) by 15% 15%
beneficiaries, by January 1. External External groups To increa increase se hiring hiring of minori minoriti ties es and top by 10% by January 1, 1991. management. Operational act actual ually To fill fill six six posi positi tion onss as soon soon managers. as possible.
unofficial) Source B.J. Hodge and William P. Anthony 1988 page 276
Primary Objectives
These are objectives that are tied directly to satisfying the needs and desires of the orga organi niza zati tion’ on’ss prim primar ary y clie client nt grou group p (pri (prima mary ry benef benefic icia iari ries es). ). What Whatev ever er type type of organization organization is considered, considered, it is basically established to provide goods and services to some special group that may be called the primary client group.
This primary objective is of paramount importance to the organization because it by establishes the base for defining other supporting objectives by setting the basic purpose of the organization. Also it can be a determining influence on the structure and process used in the organization. It sets the stage for an organization’s operations because the process, technology, and even personnel are selected on the basis of what is required to produce and distribute products and services that will satisfy primary client needs and desires.
Secondary Objectives
All organizations must satisfy the needs and desires of a variety of secondary client groups, and these needs and desires become the basis for determining the organization’s secondary objectives. For example the organization’s employees expect certain utility from the organization in return for their contribution to it. This utility can take many forms, wages and salaries, pleasant working conditions, and a host of fringe benefits, are but a few examples. Whatever form they take, however, secondary goals are the personal goals of secondary client groups that can be satisfied only if the organization concentrates
on providing utility that the group desires.
Short -term and long-term objectives
This classification is not a new category per se, but a different way of looking at primary and secondary objectives from the view point of establishing some sort of time boundary as soon for them.
Short-term goals Are those that the organization hopes to accomplish within a year.
Accounting cycles are often used as the time frames for these short term goals. The organization then strives to attain this type of goal within the bounds of its accounting cycle.
Long-term goals Are those that cannot be accomplished within the time frame of year or
so. A few years ago, long-term ranged from five to ten years. Now that period has been prolonged to range up to twenty years. The reason for this is that technology has greatly increa increased sed manage managemen ment’s t’s abilit ability y to foreca forecast. st. Whatev Whatever er its its defini definitio tion, n, the long-t long-term erm objective of an organization will provide the overall direction for it for a considerable number of years. It is important to keep the long-term objective in mind when setting short short term term object objective ivess so that that their their accomp accomplis lishmen hmentt can direct directly ly contrib contribute ute to the attainment of long term goals. At the same time, it is important for management to review the long term goals each year in order to reaffirm or alter them as the base for the future direct direction ion of the organiza organizatio tion, n, whethe whetherr the organiza organizatio tion n deserv deserves es to be in a state state of equilibrium or improvement.
Equilibrium Objectives
Those organizations that wish to remain in or achieve a steady state will develop what might be termed equilibrium objectives. These objectives are such that their attainment would allow the organization to preserve its relative share of the market and its relative shar sharee of reso resour urce cess over over time time.. Basi Basical cally ly,, an orga organi niza zati tion on that that adop adopts ts equi equili libr briu ium m objectives makes a conscious decision also to adopt the adaptation strategy for staying in tune with its macro environment. This means that it will monitor this environment with a view to making internal internal changes that will allow it to remain remain in consonance with outside pressures. This means that the organization is in a reactionary mode in that it is reluctant to adopt objectives that would require shaping or molding the macro environment.
Improvement Objectives
The desire to improve operations and to accomplish projects more efficiently is one of the universal goals of most organizations. So for reasons of efficiency, conservation and tradition, today’s organization counts the improvement objective among its goals.
Explicit Objectives
Organizations frequently set formal, official objectives that are printed and circulated primarily to those outside the organization (e.g. owners, government, or the media). These might appear in the annual reports, in press releases, or in other organization prono pronoun unce ceme ment nts. s. Thes Thesee obje object ctiv ives es may may not even even be the the actu actual al objec objecti tive vess of the the organization. They may be formally stated only for public - relations purposes.
Implicit Objectives
The actual or unofficial objectives that the organization works toward in reality might be to the different from the formally stated. This might occur for several reasons. •
Lower - level managers may not be aware of explicit objectives and may for the therefore formulate their own objectives.
•
Explici Explicitt object objective ivess may be deemed deemed unreal unrealist istic ic or unattai unattainabl nable, e, and less less ambitious ones may be implicitly set.
•
Personal objectives of managers may cloud or even negate formal objectives.
For whatever reasons, it is important to note that formally stated objectives may not be the actual objectives that guide behavior in organizations.
3.6 Functions of Organizational Goals
Viewed in broad perspective organizational goals perform several important functions which vary according to time and circumstances among other things. Organizational goals perform the following functions: Guidelines nes for action action . By desc a) Guideli descri ribi bing ng futu future re desir desired ed resu result lts, s, goal goalss serv servee as
guid guidel elin ines es for for acti action on,, dire direct ctin ing g and and chan channe neli ling ng effo effort rtss and and acti activi viti ties es of organizatio organizational nal participant participants. s. In this regard, regard, goals provide focus, and direction direction for organizational activity by prescribing what should be done. b) “Constraints” To the extent that goals prescribe what “should be” done, they also serve to prescribe what should not be done. An Organization that commits itse itself lf to cert certai ain n goals goals redu reduce cess the the amou amount nt of disc discre reti tion on it has, has, to purs pursue ue other other outcomes. For example, an organization that commits itself to maximizing immediate stock holders’ dividends in effect reduces, the amount of financial resources available for expanding production capacity or investing in research and development of future pro produ duct cts, s, Thus Thus,, by thei theirr natu nature re,, goal goalss funct functio ion n to const constra rain in the the acti activi viti ties es of organizational participants. c) Source of legitimacy Goals also provide a source of legitimacy for an organization by justifying its activities and indeed its existence to such groups as customers, politicia politicians, ns, employees, employees, stockholders stockholders and society society at large. large. Prominent Prominent examples of organi organizat zation ionss and their their stated stated offici official al goals goals that that provid providee legiti legitimac macy y includ include: e: provi visi sion on of medi medica call serv servic ices es aime aimed d at cure cure,, and and prev preven enti tion on of Hospitals- pro diseases. Prisons and mental hospitals therapy and rehabilitation Churches- divine worship and spiritual salvation
Universities - teaching, research and public service
Recognition of legitimacy greatly enhances an organization’s ability to deflect critics and obtain resources and support from its surrounding environment. This largely explains the fundraising success of such organizations as the Girl Guides, Boy Scouts, The Salvation Army, and the Red Cross. d) Standard the exte extent nt that that goal goalss are are clea clearl rly y stat stated ed and and Standardss of per perform formance ance:: To the understood they offer direct standards for evaluating an organization’s performance. Once organization establishes goals in such quantifiable areas as sales, market size, or profit, the degree to which they have been obtained should be easily verifiable. e) Source of motivation: The goals of an organization can serve as an important source of employ employee’ ee’ss motiva motivatio tion n and identi identific ficati ation. on. In fact fact organi organizat zation ional al goals goals give give incentives to members. This phenomenon is clearest in organizations that offer their members bonuses for achieving specified levels of sales, or whose pay schemes are tried directly to annual profit. f) Rationale for organizing Organizational goals provide a basis for organizations desi design gn;;
orga organi niza zattional onal
goal goalss
and and
orga organi niza zattional onal
struc tructu turre
int interac eractt
in
that that the action actionss necess necessary ary for goal goal accomp accomplis lishme hment nt may impose impose unavoi unavoidab dable le restrictions on employees activities and resource initialization patterns, necessitating implem implement entati ation on of a variet variety y of organi organizat zation ionss design design element elements; s; commun communica icatio tion n patterns, patterns, control mechanisms departmental departmental structures structures etc. for instance, instance, the more the goals of a functionally structured organization call for diversification, the greater will be the need to evaluate alternative structural arrangement such as product or customer departmentalization.
3.7 Goal Formulation 3.7.1 Responsibility for Goal Setting
The process of setting organizational goals should ideally begin at the top levels of the organization in order to set the basic direction for an entire organization. However, even though the ultimate responsibility for goal setting rests with the top management group, it
is important that they gather sufficient input from within and without the organization to make intelligent intelligent decisions decisions about the goals that the organizatio organization n on will seek. First-line First-line managers and production workers can add valuable input to production oriented goals, and the same can be said for sales managers and the sales force about establishing sales goals. These members are most familiar with the conditions surrounding the process of goal achievement. The management group at every level should set goals for their respective respective departments departments and divisions. Goal setting should be shared, involving all members of management and often non-managers as well, depending on management philosophy, technology and so on. Often objectives are set by a dominant coalition of managers, experts, or those with special interests and influence in the organization. These individuals might not, in fact, be charged with the formal responsibility for goal setting, nevertheless they can be very influential when it comes to establishing those goals toward which the organization works, both formally and informally. Because of the impact, actual as well as potential, that it can have on goal setting, the dominant coalition must be considered when goals are being set.
3.7.2 Determinants of Organization Goals
The following are some of the major factors that organizations must consider when setting goals: a) Consumer needs:
All organization exist to serve some consumer groups (primary beneficiaries) so they must carefully identify those people they will attempt to serve. A clear understanding of thes thesee consu consume merr needs needs is nece necess ssar ary y for for a mana manage geme ment nt group group to esta establ blis ish h prim primar ary y organization organization goals. In addition, addition, the organizati organization on should examine examine the needs of secondary beneficiary groups. In this way there can be an integrated set of goals aimed at satisfying primary consumer groups that also takes into account the needs of the secondary groups such as government, distributors, and so on.
b Technology:
Organizations tend to change their goals to accommodate technological advances. The classic example is this; once it became generally available, organizations began to change goals in accordance with the computer. Production and sales quotas were revised upward as technology made more rapid and efficient efficient production production and distribut distribution ion possible. possible. Such actions were tied to goals affected by the availability of the computer and its capability of increasing organizational efficiency.
c. Resources:
Having the most critical aspects of goal setting is recognizing the role of resources. It is not pract practic ical al for for inst instan ance ce to set set objec objecti tives ves that that requ requir iree more more reso resour urces ces than than the the organization can reasonably expect to acquire.
d. Management philosophy:
Because top management management is ultimately ultimately respnsib1e respnsib1e for establishing establishing the organizatio organization’s n’s goals, the values that this group holds will exert a major influence on the statement of goals. This set of values guides all management’s decision making, and it is recognized here that goal setting is a major choice area. The goals of an organization can even be taken as a reflection of the values that the management group seeks for the organization since goals represent a desired end-state of the organization.
e. Practices of others:
Often an organization sets its goals in response to what others in its industry are doing. For example, when a competitor brings out a new product, others in the industry must must take take this this into into acco accoun untt when when sett settin ing g sale saless and and prod produc ucti tion on goal goalss for for the the coming period. For example, in order to attract students as well as faculty universities try to bring out new courses and majors in response to the practices of other colleges and univer universi siti ties es.. In fact fact,, the the goals goals of othe others rs can can actu actual ally ly deter determi mine ne the the goal goalss of an organization.
f. Mandates
Occasionall Occasionally, y, organizatio organizations ns are mandated, mandated, in effect, effect, to set a particular particular goal. This can be demonstrated in the case of the Environmental Protection Agency (EPA) of the U.S. Governm Government ent.. When When settin setting g goals goals that that can affect affect the environ environmen ment, t, organi organizat zation ionss must abide by the rules and regulations of the EPA. Environmental impact studies must be conducted to measure the projected effect of certain construction projects. For example in cases such as housing developments, the developer must establish a and goal to protect the surrounding environment. Manufacturers are required to observe certain pro prote tect ctio ion n stan standa dard rds. s. Mand Mandat ates es then then can can have have a sign signif ific ican antt impa impact ct on the the entire process of goal setting and measurement.
3.7.3 Goal Setting Techniques
Officiall Officially, y, organizatio organizations ns often have a formal formal and explicit explicit means for establishi establishing ng goals, whether by a vote of the shareholders or the board of directors or by some other means. In actuality, the setting of goals or objectives is often quite different from the formal means that the organization espouses. In reality there are many factors that come into play in establishing goals; internal policies frequently exert a great influence on the process. A strong group or an individual in a key place can exert an inordinate amount of influence on setting goals and also on determining their priority once they have been it is selected. The following sections briefly discuss the main techniques that can be used to establish organizational goals and the priority placed o n them.
Conflict Setting goals by conflict can create the type of discussions that result in the
development of an effective base for conflict resolution. This means that conflict can provide provide the impetus impetus for the type of interaction that brings out the factors affecting the goals of all parties. Without the conflict one of the parties might set a good goal that would require the other(s) to set either sub-optimal or unreasonable goals. Conflict, because it does focus attention on its own resolutions, points out the way to effective goal setting. Unchecked, conflict can be potentially disastrous to an organization, and yet a healt healthy hy leve levell of conf confli lict ct can can brin bring g pres pressu sure re on the the sett settin ing g of real realis isti ticc goal goals. s. A management group can use it as a process to bring about the establishment of a sound goal program for the organization.
Compromises: It is not unusual for managers to set goals that are quite ambitious in their
initial form in order to establish a base for compromise as well as for an increased share of resources. Every organization has its own set of rules for such practices, and these rules of the game play an important role in setting courses of action for the organization. Managers who expect to use compromise set a given level of goal in the hope of bargaining away some of the advantages that might be associated with this level for other benefits. For example, a college administrator might set the goal for his or her unit’s share of capital funds at an optimistic level in the hope of bargaining with superiors for a larger share of current expense money. In other words, there is a deliberate attempt to establish a base from which to retreat in an effort to gain an overall advantage through compromise.
Cooptation: When an organization or a group of people absorb another, the act is termed
cooptation. As mentioned earlier, this can be seen when a company becomes a member of a larger organization. It is customary for its goals to be set in accordance with guidelines furnis furnished hed by the parent organizat organization ion.. This This means means that that the goals goals of the parent will determine to a large extent which goals of the members will fit into the overall, goal structure structure of the conglomerate. conglomerate. The goals of an organizatio organization n itself itself can be affected by the practices of its members. The management of the conglomerate must take the conditions and objectives of all its members into account when setting the goals of the entire organizations. Therefore cooptation can be viewed as a two-edged effect, with influence flowing from the top and the bottom of the organization.
Coalitions
While While discus discussin sing g the concept concept of organi organizat zationa ionall goals, goals, it must must be made made clear clear that that organizations as such cannot have goals except in a purely metaphorical or figurative sense. Attributing such things as goals and needs to organizations place us in a position of treating organizations as having anthropomorphic (human) characteristics it does not posses possess. s. In reali reality, ty, organi organizat zation ionss are mental mental abstra abstracti ctions ons,, incapab incapable le of having having an existence and behavior independent of the behavior of their members. In other words,
people have goals, organizations do not. At the same time, the opposite extreme of equating the goals of an organization with the sum total of the purposes and needs of its indi indivi vidua duall memb member erss is also also unacc unaccep epta tabl ble. e. The The perso persona nall goal goalss and and moti motive vess of an organization’s members may or may not be the goals of the formal organization. If organizations per se cannot be said to set and pursue goals, and if the goals of an organization are more than the simple sum of the personal goals in the organization, how then are the goals of an organization formulated? In an effort to explicitly deal with this appar apparen entt goal goal sett settin ing g dile dilemm mma, a, Cyer Cyertt and and Marc March h (196 (196)) propo propose se an alte altern rnat ativ ivee conceptualization of organizations and organizational goal setting. Rather than viewing organizations as integrated entities, they are seen as being comprised of interacting interest groups or coalitions that make competing claims on an organization’s resources. According to this model, organizational goals are determined by continued bargaining among various groups attempting to ensure that their differing interests are represented. For example stock holders bargain with employees over the relative division of profits, and departmental units bargain with one another for increased prestige and status. As a consequence of such exchanges, organizational goals represent compromises reflecting the relative power of various organizational, coalitions. Power and thus influence is achieved through control over critical events and essential resources. This approach emphasizes that the impact of organizational goals or organizational action is mediated by a continual process of bargaining in which various coalitions attempt to protect and advance advance their their specia speciall intere interests sts.. This This sugges suggests ts that that organi organizat zation ionss do not necess necessari arily ly formulate goals and subsequently allocate resources based on rational criteria, but rather on political influence. The impact of coalitions is not equal. A coalition or sub-group’s political position and power in the bargaining process largely depends on the nonactivities es and the centra centralit lity y of its work. Substi Substitut tutabi abilit lity y is a substitutability of its activiti function of the replace ability of a group’s activities. Centrality refers to a group’s importance and degree of connectivity of its assigned tasks. For instance an accounting department (sub group) typically performs a set of activities that are essential to the normal operations of a firm, exemplifying low substitutability. Likewise, the tasks it performs generally have substantive ramifications for such other departments as credit, centrality. In most instance instances, s, the sales, sales, production, production, and shipping shipping illustra illustrating ting high centrality.
greater greater a group’s group’s non substitutab substitutabilit ilityy and centrali centrality ty the more secure secure its politic political al position and power.
Throughout the bargaining process, side payments are employed by coalitions to induce other individuals individuals or groups in an organization organization to join with them in the pursuit of certain goals. goals. These These induce inducemen ments ts to parti particip cipate ate can take take any of numero numerous us forms; forms; money, money, perqui perquisit sites, es, privil privilege eged d person personal al treatm treatment ent,, grants grants of author authority ity,, positi position on etc. etc. Side payments are the price in return for which participants will accede to the demands of other participants or group of participants. Thus in exchange for decent wages and
acceptable working conditions, employees agree to produce. Similarly in exchange for dividends, shareholders agree to invest. Note that what is a goal for one participant is simultaneously a side payment for another participant and vice versa.
it should be noted that an organization will continue to be viable as long as the payments made to its various interest groups (coalitions) are sufficient to induce them to remain in the organization, or stated differently, if the utility the coalitions derive from the net balanc balancee of induce inducemen ments ts over contri contribut bution ionss is greate greaterr than than what what they they could could obtain obtain elsewhere.
Under favorable conditions, organizations often accumulate resources in excess of those necessa necessary ry to meet meet their their requir required ed side side paymen payments ts (that (that is inducem inducement ents). s). The result resulting ing difference between the total resources thus available to an organization and the total payments payments necessary to maintain maintain the contributions contributions of coalition coalition members members comprises comprises what organization slack. Slack may take many forms. In general it is that has been termed organization
cushion of unused or convertible resources which enables an organization to successfully adjust to various internal and external pressures as well as to initiate required changes in strategic posture. Liquid financial assets such as cash, marketable securities, and current account receivables receivables are perhaps perhaps the most utilitar utilitarian ian form of slack. Other forms forms of slack include dividends in excess of those required to ensure continued stockholder investment, wages paid at a level above that necessary to attract an acceptable labor force and so on.
The capacity to absorb and release slack allows an organization to successfully respond to variations in its workflow with minimal trauma.
Slack is of direct significance to the coalition process of goal formation. The structuring of conditions and the intensity of their bargaining are directly related to the availability of resources. The fierceness with which coalitions bargain is clearly affected by the state of the organization as whole. If times are good and the organization is rich in resources, the several groups can afford to be generous in the bargains they strike; competing and even conflicting goals may be simultaneously pursued. However, in those lean times when the organization organization is forced to struggle for its very survival, survival, hard bargaining bargaining takes place with the result that the desires of weaker groups are sacrificed.
3.7.4 Organizational Decision Making Bounded Rationality
The classical economic theory portrays organizational decision makers as maximizing intended outcomes based on complete information. This representation flows from two fundam fundament ental al assump assumptio tions ns upon upon which which classi classical cal econom economic ic analys analysis is rests. rests. The first first assumption is that organizations seek to maximize expected utility or profits above all else. The second assumption is that human beings are substantively rational. The realism and applicability of these assumptions has been challenged by organizational theorists. One of them is the Nobel Laureate, Herbert A. Simon who advances the view that the actual choice or decision to follow a course of action, far from being substantively ration rational, al, is limit limited ed by the finite finite cognit cognitive ive capaci capacity ty and affect affective ive attrib attribute utess of the individuals involved as well as by environmental constraints over which there is virtually no control. Thus, individuals make decisions under conditions of bounded (or limited) rationality. Such circumstances are seen as not only reflecting the limited computational
capabilities of the human mind to process information, but also reflecting the uncertainty of future organization events and an inability to order preferences for all consequences in a single utility scale. Given that organizations exist in environments that do not fully disclo disclose se the altern alternati ative ve courses courses of action action availa available ble,, or the conseq consequenc uences es of those those
alternatives, all intended rational behavior, is by definition, behavior that is inherently bounded.
Satisficing:
This word is a Scottish word meaning satisfying. Simon argues that once decision makers have have isol isolat ated ed a limi limite ted d set set of vari variab able les, s, they they agai again n devia deviate te from from the the dema demand ndss of rationality by generally selecting the first course of action that is deemed “satisfactory” or good enough rather than searching further for the optimum source. That is rather than examine all possible alternatives and attempt to order them according to a well organized and stable stable hierar hierarchy chy or prefer preferenc ences, es, they they general generally ly settle settle for the first first satisf satisfact actory ory alternative that presents itself. Examples of statisficing criteria include “reasonable share of market” “adequate profit” “fair price” and “acceptable rate of return”.
Incrementalism:
Charl Charles es E. Lind Lindbl blom om (1959 (1959)) cont conten ends ds that that in many many organ organiz izat atio ions ns,, goals goals are are not necessarily either stabilized or agreed upon prior to the consideration of alternatives. Rather, there is an ever ending series of attacks on the issues at hand through repeated sequential or incremental analysis. Lindblom depicts managers as risk avoiders who prefer to wrestle with problems and seize opportunities as they emerge, rather than formulate goals at the outset of a comprehensive search process. Thus managers bumble along, or “muddle through” without even attempting to survey all possible alternatives for achieving superior performance.
A course of action is selected and the consequences are evaluated as they develop, becoming the focus of subsequent incremental analysis.
Garbage Can Model
March and Olsen (1972) challenge both the preexistence of goals to direct organizational choices and the orderliness of choice processes. They claim decisions are an outcome of four partially independent streams; a stream of problems, a stream of potential solutions, a stream of participants, and a stream of choice opportunities. Likening organizations to
irrational irrational garbage cans into which. which. various various participant participantss have poured miscellaneo miscellaneous us problems and solutions, they view organizations as “organized anarchies” the no clear or consistent idea of what they are trying to do, how they are supposed to do it or who is to decide. Decisions are only made if a problem (for example declining sales), a solution decision (for example a new product), the relevant participants (for example annual sales convention) simultaneously intersect.
The Garbage Can Model emphasizes the impact of chance and timing in determining organizational choices, and thus reflects reality. Means-Ends Chain
Once specific courses of action are chosen for attaining agreed upon goals, subsequent decisions must be made to complete what is called the means-ends chain or hierarchy. That is, given the limited or bounded rationality of individual decision markets, and the fact that both goals and means at the highest level of an organization are often both complex and abstract, it becomes it becomes necessary to divide ultimate goals into sub goals for participants at lower organizational levels. In other words, what are means intended to contribute to the accomplishment of ends articulated at the highest level become ends in themselves for individuals at the second level of organizations. These ends in turn are translated into specific means and are parceled out to people at the third level who treat what are means for the second level as ends of themselves. Though the elaboration of chains, non-operational organizational chains, non-operational organizational goals are eventually transformed into very specific routines of behavior for people at the lowest level. An example of such a means-ends chain is illustrated as Figure 2.1
Fig. 2.1 Means-ends Hierarchy
3.8. Measuring Goal Efficiency and Effectiveness 3.8.1. Organizational Efficiency is generally defined as the ratio of an organisation’s
output (products or services) to its inputs (labour, capital, raw materials.)
In econom economic ic terms, terms, the concept concept of effici efficienc ency y can be formul formulate ated d as an optim optimisa isatio tion n problem i.e. what is the least cost combination of inputs that will produce a given level of outputs. In normat normative ive terms, terms, an organi organizat zation ion is judged judged effici efficient ent if when compar compared ed to simila similar r organisations its outputs (benefit received) are relatively high in comparison to its inputs (cost). Thus if two companies making the same product finish the fiscal year with equal production levels but one attained the same level with fewer invested resources than the other, that company is said to be more efficient. This is so because it attained the same level of outputs with fewer inputs
3.8.2 Organisational Organisational EffectivenessEffectiveness- This is a measure of how well an organisation has
achieved its goal. The greater the extent to which an organisation’s goals are met or surpassed, the greater its effectiveness.
3.8.3. Models of Measuring Organizational Efficiency and Effectiveness
There are four models or approaches used to measure an organization’s efficiency and effectiveness. These models are as explained below:
Systems Resource Model of Measuring Organizational Effectiveness
In the systems resource model organisations are viewed as being involved in a bargaining relationsh relationship ip with their surroundin surrounding, g, importing importing various various scarce scarce resources resources (for example physical facilities, ideas, raw materials, personnel, funds, e.t.c) to be returned to the same environment in the form of products and services (outputs).
An organi organisat sation ion’s ’s longlong- run succes successs and sustai sustainab nabili ility ty depends depends upon its abilit ability y to establ establish ish and maintai maintain n a favour favourabl ablee inputinput- output output ratio. ratio. The procur procureme ement nt and the transf transform ormati ation on of inputs inputs to output outputss and their their subseq subsequen uentt distri distribut bution ion to the extern external al envi enviro ronm nmen entt is ther theref efor oree the the fram framee of refe refere renc ncee of meas measur urin ing g orga organi nisa sati tion onal al effectiveness. Accordingly, the systems resource model proposes that an organisation is most most effect effective ive when it maximi maximises ses its bargai bargainin ning g positi position on and optimi optimises ses its resour resource ce procurement.
The systems resource model emphasises the interdependence of an organisation and its environ environmen ment. t. The approac approach h emphas emphasise isess that that the organi organisat sation ion is depende dependent nt upon its environment and its effectiveness is measured in terms of how it is able to sustain its envir environ onme ment nt.. Thus Thus,, by draw drawin ing g too too heavi heavily ly upon upon its its supp suppor orti ting ng envi enviro ronm nmen entt the the organisation endangers its effectiveness not only by potentially depleting its resource base, but also by running the risk of stimulating countervailing forces (legislation) within its environment.
A systems resource model defines organizational effectiveness as the extent to which an organization as a social system given certain resources and means fulfils its objectives without incapacitating its means and resources and without placing undue strain upon its members. The effectiveness of an organisation must therefore b e measured in terms of: -
Productivity
-
Absenc Absencee of ultra ultra orga organis nisati ational onal strain strain or conf conflic licts. ts.
-
Organi Organisat sation ional al flexib flexibili ility ty concept conceptual ualise ised d as the ability ability to adapt adapt to intern internal al and external change.
Shortc Shortcom oming ingss of the syste systems ms resour resource ce mode modell for for evalua evaluati ting ng organ organisa isatio tional nal effectiveness and efficiency
While the systems resource model takes into account that organisations are dependent on their environment for their sustainability, it provides little or no guidance as to what constitutes constitutes the optimum optimum exploitatio exploitation n of resources. resources. Thus, without some optimisation optimisation criterion, the model is difficult to operationalize i.e. with this approach, we are left with unanswered questions “how does one know when a system has reached a point of optimal input exploitation.” The systems resource resource model also fails to provide provide guidance guidance in determining determining which scarce and value valued d reso resour urces ces are are rele releva vant nt as the the basi basiss of dete determ rmin inin ing g the the organ organis isat atio iona nall effect effective ivenes ness. s. Without Without refere reference nce to specif specific ic output output goals, goals, the defini definiti tion on of resour resource ce becomes ambiguous.
The model also fails to elaborate on the internal allocation of resources. A further further drawback of the systems resource resource model is that once essential essential resources have been identified, something must be said about their desired state. E.g., if certain raw materials are viewed as an essential resource, the nature and extent of raw materials necessary must be determined. However this cannot be done unless some ultimate goal is established, in other words, the desired state of essential resources must be defined in relation to some objective. It is unrealistic to assume that organizations can be determined to the necessary nature and extent of essential resources without doing so on the basis of established goals.
Organisational effectiveness is based solely on resource acquisition rather than resources. That is the model ignores whether or not resources are being used effectively.
Internal Process Approach
In this this appr approa oach ch,, effe effect ctiv ivene eness ss is meas measur ured ed as inte intern rnal al orga organi niza zati tion onal al heal health th and effi effici cien ency cy.. An effe effect ctiv ivee orga organi nizat zatio ion n has a smoo smooth th well well - oile oiled d inte intern rnal al proc proces ess. s. Employees are happy and satisfied. Departmental activities mesh with one another to ensure high productivity. The following are the indicators of an effective organization as seen from an internal process approach: •
Strong corporate culture and positive work climate
•
Team spirit, group loyalty and teamwork
•
Confidence, trust, and communication between workers and management
•
Decision making near sources of information regardless of where those sources are on the organization chart
•
Undistorted horizontal and vertical communication; sharing of relevant facts and feelings
•
Rewards to managers for performance, growth, and development of subordinates and for creating an effective working group
•
Interaction between the organization and its parts with conflicts that occurs over projects resolved in the interests of the organization
Shortcomings of this Approach
Does not consider the external environment and it ignores the shareholders and other external stakeholders. Further the internal process approach has been faulted for being subjective because many of its aspects are not quantifiable.
Usefulness of the Approach •
Happy committed committed actively actively involved involved and satisfied satisfied employees are appropriat appropriatee measur measures es of effici efficiency ency and effect effective ivenes nesss as it would would be diffic difficult ult to achiev achievee efficiency without satisfied staff
•
Keeping staff happy is the key to long term success of a company
•
The idea of a positive corporate culture is also part of this approach and this also leads to corporate efficiency
c) Stakeholder approach
In this this approa approach ch effici efficiency ency is measur measured ed from from the perspe perspecti ctive ve of the organi organizat zation ional al stakeholders. A stakeholder is any group within or outside an organization that has a stake in the -organization’s performance. Creditors, suppliers, employees, and owners are all stakeholders. Each stakeholder will have a different criterion of effectiveness because it has a different interest interest in the organization. organization. Each stakeholder stakeholder group has to be surveyed to learn whether or not the organization performs well from its viewpoint. The following table shows each stakeholder and its criterion;
Table 2: Stakeholder and its criterion
Stakeholder
Effectiveness Criteria
1.
Finan Financi cial al retu return rn
Owner Ownerss
2. Employees
Work satisfaction, pay
3. Customers
Quality goods and services
4. Credit Creditors ors
Credit Creditwor worthi thines nesss
5. Community
Contribution to community affairs
6. Suppli Suppliers ers
Satisf Satisfact actory ory transa transacti ctions ons
7. Governm Government ent
Obedie Obedience nce to laws laws tax paymen paymentt
Shortcomings of using the stakeholder approach
i)
This This appr approa oach ch is is com compl plic icat ated ed as as it it see seeks ks to sati satisf sfy y man many y sta stake keho hold lder erss at once once
ii)
It als also igno ignore ress the maj major stake takeho hollders ders
iii)
It is also a subjective
iv) iv)
Busi Busines nesss organi organiza zati tion onss would would also also find find it diffi difficul cultt to simul simulta taneo neous usly ly fulf fulfil illl the demands of all groups
Usefulness of the stakeholder approach
i)
It take takess a broad broad view view of effe effect ctiv iven enes esss and and exam examin ines es fact factor orss in in the the envi enviro ronm nment ent as well as within the organization
ii) ii)
It incl includ udes es the the soci social al asp aspec ects ts whi which ch are are igno ignore red d by the the other other appr approa oache ches. s.
iii) iii)
The The appro approac ach h furth further er hand handle less sever several al crit criter eria ia simu simult ltane aneou ousl sly y and on tha thatt acknowledges that there is no single measure of effectiveness.
iv) iv)
The The appro approac ach h is als also o gaini gaining ng popu popula lari rity ty bas based ed on the the view view tha thatt effe effect ctiv iven enes esss is a complex, multidimensional concept that has no single measure
v)
Recent research has also shown that the assessment of multiple stakeholder groups is an accurate reflection of effectiveness.
vi)
Moreov Moreover er rese researc arch h shows shows that that firms firms really really do care care about about thei theirr reput reputati ation on stat status us
and actu actual ally ly do atte attemp mptt to shap shapee stak stakeh ehol olde ders rs’’ asse assess ssme ment nt of thei their r performance.
d) Goal approach
This approach consists of identifying an organization’s output goals and assessing how well the organization has attained those goals. The main advantages of this method are the following; i)
Orga Organi niza zattions ions are are est estab abli lish shed ed to ach achiieve eve goa goalls
ii)
All organizations have go goals
The main disadvantages are i. ii. ii.
Multiplicity of goals Subj Subjec ecti tivi vity ty of goal goal meas measur urem ement ent crit criter eria ia
LECTURE FOUR ORGANIZATION AS A SYSTEM
4.1 Introduction
In this this lect lectur uree we shal shalll defin definee a syst system em and and disc discus usss the the impor importa tance nce of look lookin ing g at organi organizat zation ionss as open or closed closed system systems. s. We shall shall also also discus discusss the disadv disadvant antage agess of looking at organization as closed or open systems.
4.3 Definition of a System A system is an organised or complex whole, an assemblage or combination of things or
parts performing as a complex or unitary u nitary whole.
This definition conveys three very important ideas: The first concept is that of interdependence. That is to say the parts that make up a system are interdependent i.e. if change occurs in one part or set of parts, it affects all other parts. This effect on each part or set of parts in a system may be direct or indirect. The second concept is that of holism . That is to say, the system should be considered as a functioning whole. Changes in parts of the system and in the functioning of the elements of the system should be considered from the standpoint of the systems overall performance.
Finally is the concept of synergism. This refers to the fact that the interactive effects of the parts of the system working together create an effect greater than the effect of the parts acting separately. This means that, as each part performs its role within the system it enhances the performance of other parts and hence the total performance of the system.
The system is capable of growth. It is also capable of receiving inputs It is also capable of producing outputs. o utputs. It is a goal searching system. (In fact also multi goal seeking). It consists of both abstract and concrete subsystems. It also a dynamic system.
The general subsystems of an organisation system are: Production subsystems Boundary spanning subsystem Maintenance subsystem. Management subsystem. Adaptation subsystem These subsystems are explained in detail in paragraph 4.4 below
4.4. What are Subsystems?
Subsystems are a group of functioning elements within a larger system. They are in fact systems systems within a larger larger system. system. The determinati determination on of subsystems subsystems depends on the desired level of abstraction at a given time for a desired type of analysis. If we are concerned with analysing the University Of Nairobi as a system, we can break it into colleges as subsystems. If we want to analyse the College of Humanities as a system, we can break it into faculties and consider them as subsystems and so on. Thus, all systems can be considered as subsystems and every sub system can be considered as a system depending on the level of analysis desired. In the case of organisations, we are interested in looking at an organisation as a system composed of subsystems (departments).
subsystem
System
University of Nairobi
College of Humanities and Social Sciences College of Physical and Biological Sciences College of Architecture and Engineering
subsystem
Faculty of Commerce Faculty of law Faculty of Arts
Figure 4.1 an example of o f systems and subsystems of the University of Nairobi
4.4.1 Organisation Subsystems.
The sub-systems perform the specific functions required for organisational survival. Each sub-system is a system on its own because it has a boundary and absorbs inputs from other sub-systems and transforms them into outputs for use by the remainder of the organisation. The organisational sub-systems can be divided into the following functional sub-systems: i.
Production Production sub-system: sub-system: this subsystem is responsible for producing the product
and service output of the organisation. This is where the primary transformation takes place. In a manufacturing firm, the production subsystem is the production department. In a university, it is a teaching department. In a brewing company it’s the department that actually produces beer. ii.
boundary spanning spanning subsystem subsystemss handle transactions transactions Boundary Boundary spanning: spanning: the boundary
at organisational boundaries. They are responsible for exchange with the environment on both
the
input
and
the
output
sides.
The
boundary
spanning
subs subsys yste tems ms acqu acquir iree the the need needed ed supp suppli lies es and and mate materi rial als. s. On the the outp output ut side side,, they they crea create te deman demands ds and deli delive verr outpu outputs ts.. On the the input input side side they they prov provid idee inpu inputs ts to the the
orga organi niza zati tion on Boun Bounda dary ry span spanni ning ng subs subsys yste tems ms work work dire direct ctly ly with with the the
ext externa ernall
envi enviro ronm nmen ent. t.
subs subsy ystem tem
inclu nclude dess
In
a
beer beer
manuf anufac actturin uring g
com company pany,,
the mar marketi keting ng depa depart rtme ment nt on the the
the
out output put
boun bounda dary ry
side side and and
the
purchasing department on the input side. iii.
Maintenance subsystem: this is a subsystem responsible for the smooth operation
and upkeep of the organisation. The maintenance subsystem includes cleaning and painting of buil buildi dings ngs and and main mainte tena nance nce of machi machine nes. s. Main Mainte tenan nance ce subs subsys yste tem m also also incl include udess departments departments,, which take care of human needs such as morale, morale, compensation compensation and physical comfort. Such departments include personnel, salaries, and cafeteria e.t.c. iv.
Thee adapt Th adaptati ation on subsy ubsyst stem em::
orga organi nisa sati tion onal al
chan change ge..
opp opportunit nities, es,
threats
It
scan scanss
and and
This This is the the subs subsys yste tem m resp respon onsi sibl blee for for the the the the
orga organi niza zati tion on’s ’s
technolo ological
envi enviro ronm nmen entt
dev developm opments nts
for for
and
prob proble lems ms,,
provides des
appropr appropriat iatee recomm recommend endati ations ons to the organi organisat sation ion.. It is also also respons responsibl iblee for provid providing ing information manufa ufacturi uring
and
helping org organis nisation, on,
the
organisation the
to
adapta ptation
change subsystem
and
adapt.
include udes
In
a
such
departments as marketing research, Research and Development and corporate planning.
v.
The management subsystem: this subsystem is responsible for directing the
othe otherr
subs ubsystem stemss
of
the
orga organi nissati ation. on.
It
prov proviides des
dir direct ection, on,
est establ ablishes shes
stra strate tegy gy,, goal goalss and and poli polici cies es for for the the whol wholee orga organi nisa sati tion on.. The The subs subsys yste tem m also also coor coordi dina nate tess resolves
the
perf perfor orm mance ance
and and
conflicts
betw etween
them.
act activit vities It
is
for for also
the the
othe otherr
responsible
subsy ubsysstem tems for
and and
devel veloping
organisation structure and directing tasks within each subsystem. This subsystem consists of the top management team in an organisation.
4.4.2 Advantages of the Systems Approach.
i.
Its h ol olism a pp pproach e na nables o ne ne t o co consider t he he o rg rganisation a s a w ho hole. This clearly emphasises the interdependence of the parts of the system.
ii.
The a pp pproach a ll llows th t he st s tudent o r ma manager t o cl clearly c om omprehend t he he various concepts, ideas, or elements and their relationships.
iii.
The app approach als also all allows for for mo model bui building, whi which mak makes pre presentations of idea ideass easi easier er.. The The diag diagra ramm mmat atic ic pres presen enta tati tion on make makess the the unde unders rsta tand ndin ing g of the the relat elatiions onship hip easi easier er not not onl only to unde underrstan stand d but but als also to bui build up mode modells to help in empirical research and hypothesis generation and testing.
iv.
The approach also allows for quantifications of relationships between
elements in the system. v.
It en enables ma managers to to vi view th their jo jobs as as pa parts of of a sy system, no not as as st static
isolated elements
4.4.3. Disadvantages of the Systems Approach.
There is a tendency for some students and practitioners who apply the system approach to advocate for a more centralised administrative structure in organisation. That is looking at the organisation as a whole may tempt one to concentrate decision-making power at the top of the organisation with little delegation if any.
The system systemss approach approach tends tends to oversi oversimpl mplify ify organi organizat zation ional al relati relations onship hips. s. Relyi Relying ng exclusively on these models at the expense of managerial judgment and experience can lead to dysfunctional consequences.
4.5. Closed and Open Systems 4.5.1. Closed System •
A closed system would not depend on its environment
•
A clos closed ed syst system em woul would d be auton autonom omous ous,, encl enclos osed ed or seal sealed ed off off from from the the
outside world. •
Although a closed system would not exist since it would die due to entropy, the
classical theorists looked at organizations as closed systems because they focused on internal systems. This is because they took the environment for granted and assumed that the organi organizat zation ionss could could be made made more more effect effective ive only only throug through h intern internal al design design.. They They assu assume med d that that the the envi enviro ronm nment ent was was stab stable le and and pred predic icta tabl blee and and did did not not affe affect ct the the organization. •
Does not depend on its environment
•
Does not interact with its environment
•
It is enclosed and sealed off from its environment
•
It has all the energy it needs.
•
Assumes the environment is static and has no effect on the organisation.
•
Assumes that the only thing that matters is internal structure and design, which can
be effectively structured by management.
It has all the energy it needs. It can function without the consumption of external resources.
An approach that considers an organisation as a closed system takes the environment for granted and assumes that the organisation can be made more efficient through internal design. This approach further considers the environment as stable, predictable and would not cause problems.
According to this approach the main issue for management is internal efficiency.
a) Advantages of looking at organizations as closed systems: •
Some managers treat their organisations as closed systems.
•
The classical theorists treated organisations as closed systems.
•
As a basis of theory building, one can conceptualise the organisation as a closed
system to enable more understanding.
b) Disadvantages: • •
No organisation is a closed system. This This appr approa oach ch igno ignore ress the the impo import rtan ance ce of the the exte extern rnal al envi enviro ronm nmen entt in
affecting the organization
4.5.2 Open System
An open system: •
Interacts with its environment to survive.
•
To surv surviv ive, e, it must must cont contin inuo uous usly ly chang changee and adap adaptt to the the envi enviro ronm nmen enta tall
changes. •
It must correctly interpret and act on the changes ch anges happening to its environment.
•
It must must also also cont contro roll and and coor coordi dina nate te its its inte intern rnal al acti activi viti ties es in the the face face of
environmental disturbances and uncertainty. •
the
The need for input from the environment and the need to export its output into environme nment
deno enote
an
interdependen ndencce
relationship
bet between
an
organisation and its environment. •
It both consumes resources from and exports resources to the environment. for
•
It cannot seal itself off from its environment. It must deal continuously with
its its envir environ onme ment nt.. At the the same same time time,, it must must also also deal deal with with inte intern rnal al effi effici cienc ency y as well as interact and act on the environmental changes. •
It must sell its output in the environment, coordinate its internal activities, and
deal with environmental changes and uncertainties.
•
All systems systems that that must must deal deal with with their their extern external al environ environmen ments ts to surviv survivee are
open open syst system ems. s. Huma Human n bein beings gs are are open open syst system ems. s. The The Univ Univer ersi sity ty of Nair Nairob obii is an open system. •
It must correctly interpret and act on the changes ch anges happening in its environment
•
At the the same same time time it must must cont contro rol, l, stru struct ctur uree and and coor coordi dina nate te its its inte intern rnal al
env environment
to
take
account
of
chan hanges
in
the
external
environme nment.
a) Advantages of looking at organizations as open system: • •
Enables us to see the dependence of the organisation on the environment Enable Enabless us to underst understand and the interinter-rel relati ations onship hip between between the organi organisat sation ion and the
environment.
b) Disadvantages •
Tends to ignore the role of management behaviour and decision- making, capacity to
make the organisation efficient. •
It ignores the importance of the internal environment to the organisation’s efficiency
and effectiveness.
4.6. Input — Output Analysis of a System
An input- output analysis depicts the system as taking or receiving resources from
the environme1at, processing them into outputs and giving them to the environment. env ironment.
Input — output analysis involves examining a flow of materials, ideas, concepts,
money, people, e.t.c. from the environment.
a) b)
The input- output analysis consists of 5 of 5 parts namely:
Inputs: the resources, ideas, concepts and people coming from the environment. The transformation transformation process: the process that works on the inputs and changes
them usually by adding value. c)
The feedback: the process or flow of information regarding the quality or price
e.t.c. of inputs and outputs.
d)
The outputs: the end results of the transformation process that is taken to the
environment. e)
The environment: the element, which constitutes these sources of inputs or the
users of the outputs.
The organization
Environment
Environment Inputs
Transformation process
Outputs
Feedback
Figure 4.2 an input- output diagram of an open system
4.7 Other Kinds of Systems
There are many kinds of systems of systems with their own subsystems. The human being is one of them, but it is the most complex because it: i.
Is alive- it has life.
ii.
It can think, plan and remember.
iii.
Is aware of its surroundings.
iv.
Is also aware of itself.
v.
Have attitudes, mo moods, fe feelings an and norms.
You can also proceed to a higher and more complex system,
vi. vi. The The organization as a system. It is composed of human beings and consequently transforms the complexity of the human system many times over. The complexities of social system arise from:
•
Complexities of the human system. The norms and values of human beings, which are intangible and hard to detect.
• •
Cultural dimensions of human beings, which are even harder to identify.
•
The fact that these norms, values and cultures are constantly changing.
Thus the social system (the organisation) requires extra training to be understood, manage and chan change. ge. Other Other syst system emss incl include ude :( from from the the simp simple lest st to the the most most comp comple lex) x)..
1.
Atom, map or bridge.
Simplest because it’s static. 2.
Clocks and watches.
A higher complexity because it is dynamic. 3.
Thermostat.
Higher complexity because it is self regulating within prescribed limits. 4.
Cell.
This is the beginning of a system that is not only Self-regulating but it is a living thing. 5.
Plant.
Complexity increases due to ability to reproduce and grow. (Several cells). 6.
Animal system.
Dynamic and living. 7.
Human beings.
Living, dynamic and has awareness of its surrounding. Self- regulating 8.
Social organisation.
A social system is composed of complex systems namely human beings that transfer their complexities to the social organisation.
Levels of analysis - in systems theory, each system is composed of subsystems. Four levels
of analysis usually characterise organisation. • •
The individual human being is the basic building block of the organisation. The next higher level of analysis is the group or department. These are collections of
individuals who work together and interact to perform subsystem tasks.
•
The next level of analysis is the organisation itself. An organisation is a collection of
individuals who work together and interact top perform subsystem tasks. •
The next level is the community of organisations, which are grouped together. They
form an important part of the environment.
Organisation theory focuses on the organisation level of analysis. Organisation theory is a macro examination of the organisation because it analyses the whole organisation as a unit. Orga Organi nisa sati tion on behav behavio iour ur on the the other other hand hand focu focuse sess on the the indi indivi vidu dual alss with within in the the organisation as the relevant unit of analysis. Organisation behaviour examines concepts such as motivation, leadership style and personnel and is concerned with cognitive and emotional differences among people within the organisation.
LECTURE FIVE ORGANIZATION STRUCTURE AND DESIGN
5.1 Introduction
In this lecture we shall define organization structure and design and discuss the structural and contextual dimensions of organizations.
5.3 Meaning of Organization Structure and Design
An organisation design is defined as a structure and a process through which individuals allocate tasks among members, identify relationships and integrate their activities towards common objectives. It includes •
Allo Alloca cati tion on of task taskss and and resp respons onsib ibil ilit itie iess betwe between en the the diff differ erent ent memb member erss of the the
organization • •
Differentiating these tasks and activities into groups and departments Differentiating the tasks and responsibilities into hierarchies and locations
•
Establ Establish ishing ing coordin coordinati ation on mechan mechanism ismss to integr integrate ate the differ different ent groups groups,, and
hierarchies into a unitary whole. Organisation structure may also mean the following: • •
The way the organisation is differentiated into various tasks and responsibilities. The way the tasks and responsibilities are allocated to the various members of the
organisation. •
The way the organisation is differentiated into hierarchies.
•
The way the organisation is differentiated into different locations.
•
The way the differ different ent respons responsibi ibili litie ties, s, tasks tasks and locati locations ons are coordi coordinat nated ed or
integrated into a unitary whole
Organi Organisat sation ion struct structure ure is theref therefore ore the differ different entiat iation ion i.e. i.e. the way the organi organisat sation ion is differenti differentiated ated into tasks, tasks, responsibi responsibiliti lities, es, departments departments and hierarchies hierarchies and the integrati integration on (the way the organisation is coordinated to form a unitary whole)
5.4. Dimensions of Organization Structure
There are several ways in which the organization structure is measured or differentiated. The measures used are: a)
Span of control. This refers to the number of employee directly controlled by a
single supervisor. The size of the span of control is a function of: i.
The degree of complexity of the work- simple tasks are easily supervised
and are therefore associated with long spans while mo complex or advanced tasks are associated with shorter span of control ii.
The level of staff skill and ability. Well-framed and able employ can be
supervised supervised more efficientl efficiently y in larger groups (wider spans) while untrained staff require narrow or smaller span of control. iii.
The supervisors’ training and ability level. Too wide span of con is
associ associate ated d with with lack lack of contro controll and the likeliho likelihood od of costl costly y mistak mistakee being being made made by subordinates. Too narrow a span of control leads employee being over supervised and
denied the opportunity to creative. This may lead to decline in organisation growth as a result inability to be adaptive to environmental chang e and dynamics.
(b) Chain of command: This identifies how power and control is passed down through
the organisation. A tall structure is a long chain of command and a flat structure is a short chain of command. Chain of command is also described in terms of vertical complexity.
(c) Ceitra1isation/decentralisation. This refers to the level in the organisational hierarchy
in which decisions are made. In a centralised hierarchy, the decisions are made at higher level.
(d) Formalization- the amount of written documentation in the organisation that describes
the procedures, job descriptions, regulations policies of these organisations.
(e) Specialisation- the degree to which organisational tasks is subdivided.
(This is also referred to as the division of labour.) If specialisation is extensive, each employee performs only a narrow range of activities.
f) Standardisation- is the extent to which similar work activities are performed in a
unified manner. In a highly standardised organisation, work content is described in detail, so similar work is performed the same way across departments or locations.
descrribes ibes who who repo report rtss to whom whom and and the span span (g) (g) Hier Hierar arch chy y of auth author orit ityy- desc of control for each manager. manager. Span of control refers to the number of employees employees reporting reporting to a supervisor. Hierarchy of authority is the number of hierarchal levels.
(i) Structural Complexity- refers to the number of activities or subsystems within the
organi organisat sation ion (hori (horizont zontal al comple complexit xity) y) the number number of levels levels in the hierar hierarchy chy (verti (vertical cal complexity) and the number of localities that is geographical (spatial complexity).
j) Professionalism- is the the leve levell of form formal al educ educat atio ion n and and trai traini ning ng of empl employ oyee ees. s.
Professionalism is considered high when employees require long periods of training to be jobholders in the organisation. Professionalism is measured in terms of the average number of years of education of employees.
(k) Personnel configuration is another structural dimension of organisation and this refers
to the deployment of people to various functions and departments. Personnel configuration is measured by ratios such as administrative ratios, the ratio of direct/ indirect labour employees. It’s measured by dividing the number of employees in a function by the total number of employees in the organisation.
5.5 Contextual Dimensions
They They char charac acte teri rise se the the whol wholee orga organi nisa sati tion on incl includi uding ng its its envir environ onme ment nt.. Conte Context xtua uall dimens dimension ionss are import important ant,, becaus becausee they they influe influence nce the struct structure ure.. The key contex contextua tuall dimensions are as follows: i.
Size- this is the number of people in the organisation. Since organisations are social
systems, the number of employees measures size. Other measures such as total sales or amount of assets are related but do not indicate the size of the human part of the social system. ii.
Organisational Organisational technologytechnology- the nature of the task to the production subsystem and
includes the actions, the knowledge and the technologies used to change inputs to outputs. An assembly is one type of technology. E.g. college classroom or an oil refinery. iii.
Organizational environment- this refers to all the elements outside the organisation’
boundary but can affect or have the potential to affect the organization. The key elements include: the industry, government, customers, suppliers and the financial sectors. Most elements that affect the organisation are composed of other organisations. Both contextual and structural dimensions represent variables that can be measured and analysed for any organisation. They provide a basis for measurement and analysis. iv.
Organizational Organizational culture This This refers refers to the belief beliefs, s, values values and custom customss shared shared
by memb member erss of an orga organi niza zati tion on or group group.. The The shar shared ed beli belief efs, s, valu values es and cust custom omss are are stro strongl ngly y held held and shared shared by the the group group and they they help help guid guidee the the grou group p in the the pursuit of the group’s goals
v.
Organizational strategy This refers to the formulation of the organizations goals and
objectives and the way to achieve those goals
LECTURE SIX ORGANISATION ENVIRONMENT 6.1 Introduction
In this lecture we shall define organisational environment as the elements outside the boundary of the organization which affect or have the potential to affect the organisation. We will will also also discus discusss the variou variouss enviro environme nmental ntal sector sector facing facing organi organizat zation ionss such such as political/ legal, economic, industry and others.
6.3 Definition of Organization’s External Environment
Organizational environment refers to all the elements existing outside the boundary of the organization that have the potential to affect all or part of the organization. In a broad sense, the environment is infinite and includes everything outside the organization. It consists of sectors such as
Raw materia materiall - thes thesee are are indi indivi vidu dual alss and and othe otherr firm firmss whic which h supp supply ly the the
organization with raw materials
these are organi organizat zation ionss which which supply supply the organi organizat zation ion Human resources resources - these
with human resources
Financial Financial Resources Resources - these these are condit condition ions, s, compet competit itiven iveness ess,, instit instituti utions ons
and instruments which supply the organization with financial resources
this sector sector includ includes es the custom customers ers who purcha purchase se Custome Customerr or Market Market - this
the organization’s goods and services
or
Econ Econom omic ic - this this incl include udess the the stat statee of the the econ econom omy, y, infl inflat atio ion, n, depr depres essi sion on,, unem unempl ploy oyme ment nt
rat rates, es,
econ econom omic ic
pol polici icies
etc. etc.
of
the
coun countr try y
or
regio egion n
where the organization sells its goods and service
Poli Politi tica cal/ l/le lega gall - this this incl includ udes es the the stab stabil ilit ity y Or inst instab abil ilit ity, y, rule ruless and and
regulations, and the justice systems of the country
consis ists ts of valu values es,, beli belief efs, s, stan standa dard rdss of the the socie ociety ty in Socio-cultural - cons
which the organization is situated
consis ists ts of all all the the demo demogr grap aphi hicc dime dimens nsio ions ns of the the soci societ ety y Demographic - cons
of the organization
consists ts of the climat climate, e, weathe weatherr and other other natura naturall Natural Environment Environment - consis
conditions of the country or region of the organization
Inte Intern rnat atio ional nal envi enviro ronm nmen entt - consi consist stss of the the elem element ents, s, fact factor orss and and other other
orga organi niza zati tion onss
exis existi ting ng
outs outsid idee
the the
coun countr try y
of the the
orga organi niza zati tion on
whic which h
have have
the potential to affect the organization.
6.4 Dimensions of Organizational Environment
The The exte extern rnal al envi enviro ronm nmen entt of an organ organiz izat atio ion n can can be diff differ eren enti tiat ated, ed, meas measur ured ed or categorized in many ways. The main ways in which this differentiation can be done include the following studies:
6.4.1 By Aldrich - Aldrich Categorizes External Environments in Terms of:
i.
Environmental Environmental Capacity: Capacity: This measures the environment in terms of resources
availability ii.
Homogeneity/Heterogeneity: This categorizes the environment in terms of the
degree of similarity among the environments elements iii.
This categori categorizes zes environ environmen mentt in terms terms of the Stability/Instability: This
degree degree of
turnover of the elements iv.
Consensus/Dissensus : This categorizes the environment in terms of the degree to
which an organization’s claim to a specific domain is disputed or recognized by other organizations v.
Concentration/Dispersion: This measures the degree to which resources and the
elements are evenly distributed over the range of the organization’s domain.
vi.
This meas measur ures es the the exte extent nt to whic which h the the task task Environmental Environmental Turbulence: Turbulence: This
environ environmen mentt of an organi organizat zation ion is distur disturbed bed by an increa increasin sing g rate rate of interc interconne onnecti ction on between elements and trends.
6.4.2 Emory and Trist
Emory and Trist categorized external environments into the following categories:
Placid Randomized . This is a simple environment. It is placid in the natural sense that
elements change slowly. The environment is random because when a change does occur, it is not predicted, and is not coordinated with other environmental elements.
Placid Clustered. This environment is stable. Elements are linked together so that any
slight slight change in one causes causes simult simultaneo aneous us change change in other other elemen elements. ts. When When threat threatss or opportunities occur they occur in clusters which are more dangerous for the organization.
Disturbed reactive. In this environment changes are no longer random. Actions by
one organization can disturb the environment and provoke a reaction. This environment is made made up of large large organi organizat zation ions. s. A decisio decision n by any one organi organizat zation ion in this this type type of environment is significant enough to cause a disturbance, and calls for a reaction from other organizations. In a disturbed reactive environment, management’s task is to carefully plan decisions and strategic moves to allow for counter moves.
Turbulent Field. This is an environment characterized by both complexity and rapid
changes. Multiple sectors experience dramatic changes and the changes are connected. The turbulent field usually has overwhelming negative consequences for the organization. The dist distin ingu guis ishi hing ng feat featur uree of the the turb turbul ulen entt fiel field d is the the inte interr-dep depen ende dence nce and the the inte interrconnectedness of the elements.
6.4.3. Lawrence and Lorsch Studies
Lawr Lawren ence ce
and and
Lor Lorsch sch
of
Har Harvard vard
Uni Univer versit sity
exam examin ined ed
thr three
depa deparrtmen tments ts
(Manufacturing, Research & Development and Sales) in ten companies in the United States of America. Their aim was to find out how organizational structure relates to environmental complexity. Their findings were that;
The plasti plastics cs indust industry ry with with high high environ environmen mental tal comple complexit xity y tended tended to have higher higher
departmental differentiation than either the food industry, (facing moderate complexity),
and the the conta contain iner er indu indust stry ry,, (fac (facin ing g low low envir environ onme ment ntal al comp comple lexit xity) y).. They They defin defined ed differentiation as the differences in cognitive and emotional orientation among managers in different functional departments. The plastics industry also had a higher degree of integration than either the foods industry or the container industry. Their findings are as summarized in table 6.1. Table 6.1 Environmental Uncertainty and Organizational Structures Plastics
Food
Container
Environmental uncertainty
High
Moderate
Low
Departmental differentiation
High
Moderate
Low
Percentage in integrating roles (integration)
22%
17%
0%
Source: Draft, R.I 6.4.4 Burns and Stalker Studies
Burns and Stalker observed 20 industrial firms in England and discovered that when extern external al enviro environme nment nt was stable stable,, the intern internal al struct structure ure was charac character terize ized d by rules, rules, procedures and a clear hierarchy of authority (i.e. high formalization). They were also highly centralized.
However However,, the studie studiess found found out that that in rapidl rapidly y changin changing g environ environmen ments, ts, the intern internal al organization was much looser, free flowing and adaptive. Rules and regulations often were not written down, or if written down were ignored. The hierarchy of authority was not clear. Decision making was decentralized. Burns and Stalker used the term “organic” to descri describe be the decent decentral ralize ized, d, low formal formalize ized, d, flexib flexiblele- struct structure ures, s, and “mecha “mechanis nistic tic”” to describe centralized, highly formalized and inflexible structures.
6.5. The Impact of Environment on the Organization
The organization’s external environment has the following effects on the organization: organizat zation ion depends depends on its its extern external al enviro environme nment nt for its Resource Dependence: Dependence: The organi resources. It also depends on its external environment for marketing its goods and services. These dependencies give environmental elements power over the organization. When these dependencies are small and isolated as in the case of placid randomized environment, significant coping is not required. When the dependencies are large and are changing
rapidly, the organization must take steps to cope with these dependencies and reduce them. Organizations have two coping techniques:
The first one is internal change. This involves altering its structure, internal work
patterns, or policies, or planning and forecasting.
The second technique is to reach out and change the external environment. The
organization can try to reduce environmental change, or to change external conditions in a direction suitable to its own needs. These internal and external strategies are described below
6.5.1. Internal Change Categories: These are as follows;
Structural Structural complexity. complexity. As the complexity in the external environment increases, so
does complexity in the organization structure. This is based on the law of requisite variety that that says says that that comple complexit xity y in one syste system m is requir required ed to control control complexit complexity y in anothe another r system.
Buffering. Buffer Bufferss absorb absorb uncert uncertain ainty ty from from the enviro environme nment. nt. The goal of buffer buffer
departments is to protect the organization’s technical core from external disturbances so that it can operate as efficiently as possible. Buffers are specific departments established to deal with specific domains and absorb the uncertainty originating from each domain. Advertising, sales and marketing departments attempt to buffer the technical core (the production department) from environmental uncertainty.
Boundary Boundary .spannin .spanning g roles. roles. Thes Thesee are are depar departm tmen ents ts that that link link and coord coordin inat atee the the
organization with key elements in the external environment The boundary role establishes a relati relations onship hip with with indivi individual dualss and organi organizat zation ionss in the extern external al environ environmen ment. t. The boundary spanning role serves two purposes:
To detect and process information about changes in the external environment.
To represent the organization to the external environment
Example Exampless of depart department mentss which which perfor perform m boundar boundary y spanni spanning ng role role includ includee strate strategic gic planning, public relations.
Differentiation. This is the difference in cognitive and emotional orientation among
managers in different functional departments and the difference in formal structure among these these departm departments ents.. When When the extern external al enviro environme nment nt is comple complex x and rapidl rapidly y changin changing g organizational departments become highly specialized to handle the uncertainty in their external domain. For example, when the University of Nairobi faces a highly hostile political environment, it establishes specific departments to deal with the complex political environment
Integration. Integration is the quality of collaboration between departments. When
environments are highly uncertain, organizations form integrators to increase co-ordination among departments. These integrators include liaison officers, management committees, task forces, or integrators.
Planning and Forecasting. When the environment is stable, the organization can
concent concentrat ratee on curren currentt operat operation ional al proble problems ms and dayday- to-day to-day effici efficiency ency.. Long-r Long-range ange planning and forecasting are easy to do because environmental demands in the future will be the same as they are today. But when environments are hostile, rapidly changing and com complex plex,,
spec speciific fic
depa depart rtme ment ntss
for
plan planni ning ng
and and
for forecas ecasti ting ng
are are
ess essenti ential al
since p1annng required is extensive.
6.5.2 External Strategies
The relationship between organization and its external environment is not simply one of organi organizat zation ional al adaptat adaptation ion.. Organi Organizat zation ionss can also also reach reach out and change change the extern external al environment. Two strategies can be adopted to manage the external environment viz;
i.
Esta Establ blis ishi hing ng fav favor orab able le link linkag ages es with with the the key key elem elemen ents ts in the the env envir iron onme ment nt and and
ii.
Shaping the environment domain
Establishing favorable linkages. This may include: Mergers . In a merger, the organization acquires an organization in the domain that is
creating uncertainty
Contracts. The organi organizati zation on enters enters into into contra contractu ctual al arrange arrangemen ments ts with with suppli suppliers ers or
purchasers. Joint Ventures. Ventures. Organizatio Organizations ns form companies with key stakeholders stakeholders in the external external
environment to reduce uncertainty
Co-optation. This occurs when leaders from important domains in the environment are
brought into the organization e.g. influential customers or suppliers are appointed to the board of directors of the organization Interlocking Directorates. The individuals appointed to the board of the organization are also members of other key stakeholders in the external environment.
External Recruitment. Hiring, for example retired generals from the air force to connect
organization manufacturing air force equipment to the air force
Advertising. Organizations also advertise their products to customers Public Relations. Relations. This is aimed the at public merely to cast the organization in a
favorable light
Controlling Environmental Domains of the External Environment.
This entails three techniques: i.
Change domains. An organization may decide to produce other products.
ii.
Political act actiivity. Thi This inv involves inf influenci ncing gov government of officers ers or po politicians to make or repeal laws and regulations in the organizations favor.
iii.
Trade As Associations. Th The or organiz nization ma may fo form fo forces ces wi with ot other or organizations ons in the industry that have similar interests, by pooling resources together to take care of their their intere interests sts,, These These organi organizat zation ionss can afford afford to pay people people fullfull- time time to carry carry out activities such as lobbying legislators, influencing regulations, developing new relations, campaigns and blocking competition .
LECTURE SEVEN ORGANIZATION TECHNOLOGY
7.1. Introduction
In this Lecture we shall define organizational technology and technology typology and discuss its importance to the efficiency and effectiveness of organizations. We shall also disc discus usss the the
vari variou ouss
tech techno nolo logy gy typo typolo logi gies es such such as tech techni nica call
comp comple lexi xity ty,,
task task
interdependence and knowledge analyzability and analyzability.
7.3 What is Technology?
Technol Technology ogy refers refers to the proces processs of transf transform orming ing inputs inputs into into output outputs. s. It includ includes es the knowledge, tools, the equipment and the processes used in producing goods and services in an organization. All organizations have technology
7.4. Importance of Technology
Technology is important because: i.
It det determines nes the efficiency ncy of the or organizati ation
ii. ii.
It is the the pri princ ncip ipal al det deter ermi mina nant nt of of inc incre reas asee in pro produ duct ctio ion n of lim limit ited ed and and exh exhau aust stiv ivee
resources iii. iii.
It aff affec ects ts the the att attit itud udes es,, feel feelin ings gs and and the the tem tempe pera rame ment nt of of the the work worker er,, and and ther theref efor oree
affects his or her productivity iv.
It af affects or organization’s st structure
7.5. Technology Typology and its Categories
Technol Technology ogy typolo typology gy refers refers to the ways ways technol technology ogy is measur measured, ed, differ different entiat iated ed or categorized.
Technology can be classified or differentiated in many ways. Some of the ways are techni technical cal comple complexit xity y of operat operation ions, s, ii4it ii4iterd erdepen ependenc dencee of operati operations ons and knowled knowledge ge analyzability and variety. Technical complexity refers to the differentiation in terms of the use of human labor versus the use of machinery and equipment in the transformation process. The more the proportion of the human input the less complex the technology and the more the proportion of the machine input the more complex the technology. In the case
of interdepende interdependence nce of operations, operations, the greater the interdependen interdependence ce the higher the technical complexity. In the case of knowledge analyzability and variability and task variety the comple complexit xity y of techno technolog logy y takes takes on four four dimens dimension ions. s. These These dimens dimension ionss of technol technology ogy typologies are explained here below.
7.5.1 Joan Woodward’s Technical Complexity
Joan Joan Woodw Woodwar ard d was was a Brit Britis ish h Indus Industr tria iall Soci Sociol ologi ogist st.. Her Her studi studies es cover covered ed 100 manufa manufactu cturin ring g firms firms in South South Essex, Essex, Englan England. d. Her study study was conduct conducted ed betwee between n September 1954 and September 1955. 1955. The study was designed to test whether management pr princi nciples ples as appl applie ied d
on orga organi niza zattion ion
stru struct ctur ure, e, span span of cont contro roll,
chai chain n
of
command etc led to successful organizations.
Method of study
Woodward and her research team visited each of the firms studied, interviewed managers, examined company records and observed its manufacturing operations. Her data included a wide range of structural of structural characteristics of these organizations such as span of control, levels of management, management and clerical ratios, work skill level, dimensions of managem management, ent, (i.e. (i.e. writte written n versus versus verbal verbal commun communica icatio tions, ns, use of sancti sanctions ons)) type type of manuf manufac actu turi ring ng proc proces esse ses, s, data data on comm commer erci cial al succ succes esss of the the comp compan any y (such (such as profitability, prices of shares in stock exchange) the history and rate of development, reputation of the firm as an employer, level of salaries paid to senior staff, rate of staff wastage and the relationship between the firm and outside organizations.
Data Analysis
The initial study of data found that firms varied widely in such things as span of control, number of hierarchical levels, administrative ratio and amount of verbal communications. Thus her data did not show any proof to the “one best way” principle of management. However a further look and analysis of the data and information showed a relationship betw betwee een n orga organi niza zati tion on stru struct ctur uree and and techn technol ology ogy.. Wood Woodwa ward rd devel develope oped d a scal scalee and organized the firms according to technical complexity of the manufacturing processes. Tech Techni nica call
comp comple lexi xity ty repr repres esen ente ted d
the the
mech mechan aniz izat atio ion n
and and
pred predic icta tabi bili lity ty of the the
manuf manufac actu turi ring ng proc proces ess. s. Her Her scal scalee had had ten ten cate catego gori ries es that that were were grou grouped ped into into thre threee production types as summarized in Annex 1 attached and discussed below.
Group 1: Small Batch and Unit Production
These firms tended to be job shop operations that manufacture and assemble small orders to meet specific needs of customers. Customs work is the norm. This technology relies heavily on the human operator. It is thus not highly mechanized and predictability of outcome is low. Examples included many types of made to order manufactured products, such such as specia specializ lized ed constr construct uction ion equipm equipment ent or custom custom made made electr electronic onic equipm equipment ent..
Group 11: Large Batch and Mass Production
This manufacturing process is characterized by long production of standardized parts. Output often goes into inventory from which orders are filled because customers do not have special needs. Examples would include most assembly lines, such as automobiles or trailers homes. The integrated cotton mill is also a mass production technology.
Group III: Continuous Process Production
In this technology, the entire process is mechanized. There is no starting and stopping. This represents mechanization and standardization one step beyond an assembly line. The organi organizat zation ion has high high control control over the proces processs and outcom outcomes es are highly highly predic predictab table. le. Examples would include chemical plants, oil refining, and liquor production.
Her findings were as follows; •
Ratio of management management staff to total personnel personnel shows an increase from unit production, production,
to mass production and to continuous process production. •
Superv Superviso isorr span span of contro controll is highes highestt in mass mass product production ion and lowest lowest in proces processs
production. •
Direct labor to indirect labor ratio decreases with technical complexity.
•
Other characteristics such as span of control, formalized procedures, and centralization
are high for mass production and low for other technologies i.e. unit production and process production. •
The number of skilled workers and the use of verbal versus written communication
also depend upon manufacturing technology. It is high in unit and process production and low in mass production. •
Overall, Overall, the management system in both unit and process technology is characteri characterized zed
by organic while mass production is characterized by, mechanistic system. •
With With resp respec ectt to tech technol nolog ogy y and perf perfor orma mance nce,, Woodw Woodwar ard d stud studie iess foun found d that that
succ succes essf sful ul firm firmss tend tended ed to be thos thosee that that had had comp comple leme ment ntar ary y stru struct ctur ures es and and tech techno nolo logi gies es i.e. i.e. firm firmss
that that most most near nearly ly appr approx oxim imat ated ed the the
typi typica call
stru struct ctur uree
for their technology were most effective. Firms that deviated in either direction from their ideal structure were less successful. •
Wood Woodwa ward rd was was able able to expl explai ain n the the disp dispar arit ity y betw betwee een n her her find findin ings gs and and the the
classical prescriptions of management theorists’ these principles must have been based on these
theorists’
experiences
with
organizations
that
used
mass mass prod produc ucti tion on tech techno nolo logi gies es.. The The mass mass prod produc ucti tion on firm firmss had had clea clearr line liness of auth author orit ity, y, high high form formal aliz izat atio ion, n, a low low prop propor orti tion on of skil skille led d work worker erss achi achiev eved ed thr through ough a high high divi divisi sion on of labor abor,, wide wide span pan of cont contrrol at the super upervi viso sorry level and centralized decision making. Evaluation of Woodward studies Woodward’s findings were widely supported by a number of other researchers for example: •
in
Edwa Edward rd Harv Harvey ey stud studie ied d 43 diff differ eren entt indus industr tria iall orga organi nizat zatio ions ns and and rate rated d them them simi imilar lar
techn echnol olog ogiies. es.
He
foun found, d,
cons consiisten stentt
wit with
Wood Woodwa ward rd’’s
findi inding ngss
that, a relationship between technical specific technologies had more - specialized subunits, more authority levels and higher ratio of managers to total personnel than did those with diffuse technologies. •
Another study confirmed that there was no evidence that there was such a thing as
a uni univers versal allly opti optim mum struc tructtural ural form form.. Each Each type of str struct ucture ure depe depend ndss on many things.
Table 7. 1: Woodward’s classification of 100 British firms according to their system of production Group 1: Small Batch and Unit Production Technology •
Production of simple units to customer’s orders
•
Production of technologically complex units
•
Fabrication of large equipment in stages 7.
•
Production of small batches
Group 2: Large Batch and Mass Production Technology •
Production of components in large batches. Subsequently assembled directly
•
Production of large batches assembly line type
•
Mass production
Group 3: Process Production Technology •
Process Process production production combine combined d with with the prepara preparation tion of product product for sale by large large
batch or mass production methods •
Continuous
flow
of chem hemicals
of
liquids, ds,
gas gases, es,
and
solid
shap hapes
Table 7.2: Relationship Relationship between between technical complexity and structural characteristics according to Woodward’s findings.
TECHNOLOGY
Unit
Mass
process
Structural characteristics
Number of managerial levels
3
4
6
Supervision span of control
23
48
15
Direct labor/indirect labor ratio
9.1
4.1
1.1
Management staff/total personnel ratio
Low
Medium
High
Number of skilled workers
High
Low
Low
Formalized procedures
Low
High
Low
.
Centralization
Low
High
Low
Amount of verbal communication
High
Low
Low
Amount of written communication
Low
High
Low
Overall structure
organic
Mechanic
Organic
7.5.2 James Thompson’s Task Interdependence
Anoth Another er pion pionee eerr in the the tech techno nolo logy gy-- typol typolog ogy y aren arenaa was was Jame Jamess Thom Thomps pson. on. Unli Unlike ke Woodward’s, Thompson’s work was not based on field research. His contribution was theoretical he drew from a variety of sources and proposed new ideas and frameworks about organizations. In Thompson’s view, organizations are open systems and technology reflects the environment outside the organization as well as internal task activities. He proposed three categories of technology that reflect relationships with clients as well as internal transformation process. These categories are: Mediating or pooled technology: Mediating technology involves the mediation or linking
of clients with the external environment. Typically these clients cannot deal with each other directly because of costs or complexities involved in face to face transactions. A stockbroker for example mediates between sellers and buyers. So does a real estate firm. Employment agencies bring together clients who are jobless with clients who have job opening openings. s. Banks Banks and retail retail stores stores also also mediat mediatee betwee between n client clientss in the environ environmen ment. t. Long Linked or sequential Technology: the concept of long-linked technology refers to
the combination in one organization of successive stages of production, each stage of production uses as its inputs the production of the preceding stage and produces inputs for the the foll follow owin ing g stag stage. e. Orga Organi niza zati tion onal al acti activi viti ties es occur occur in seque sequenc ncee in long long linke linked d technologies: the output of operation 1 becomes the input of operation 2, the output of operation operation 2 becomes becomes the input of operation operation 3 and the finished finished product product is then available available to customers. Large-scale organizations that use assembly-line production to produce goods or services through a sequence of activities as in the automobile industry are examples of long linked technologies.
Intensive or reciprocal reciprocal Technology: Technology: intensive intensive technologies technologies are characterized characterized by the
collection of specialized services for clients. A variety of activities can be brought to bear
on the client and have substantial impact on the client. Intensive technologies generally go beyond providing a simple service and are designed to bring about change in the client. Hospitals are an excellent example because they represent a collection of specialized skills to bring about therapeutic change in patients. A university is another example — a wide varie variety ty of disc discip ipli line ness and and suppo support rt serv servic ices es are are avail availabl ablee to faci facili litat tatee educa educati tion onal al development of students. Figure 7.1 illustrates the three types of technology typologies by Thompson.
Mediating
Clients
Customers
Long –linked
Clients
Intensive Client
Fig 7.3: Thompson’s Technology Classification
Evaluation of Thompson’s work
Thompson’s study fails to explain the departmental technologies — for example what classification would one use for G.M which uses an intensive technology in its R&D department, a long linked one in its assembly line, and a mediating technology in its financing department.
Thompson also does not deal explicitly with the issue of complexity or variability of technology in a given case (Robbins — 2000). For example some long linked technologies are are quit quitee compl complex ex and and allo allow w vari variab abil ilit ity y and and exce except ptio ions ns (e.g. (e.g. asse assemb mbli ling ng diff differ erent ent automobile models with color and other options) while others are less complex.
7.6.3 Charles Perrow’s Knowledge Technology
Charl Charles es Perr Perrow ow trie tried d to look look at the the limi limita tati tion onss of Wood Woodwar ward d name namely ly the the fact fact that that Woodward studied only manufacturing firms. Since manufacturing firms represent less than half of all organizations, technology needs to be operationalised in a more general way if the concept is to have meaning across all organizations.
Per row looked at knowledge technology rather than production knowledge. He defined technology as “the action that an individual performs upon an object, with or without the aid of tools or mechanical devices, in order to make some change in that object”. He identified two dimensions of4echnology viz: •
Task variability variability — this considers the number of exceptions encountered encountered in one’s
work. These exceptions will be few in number if the job is high in routine ness. Jobs that normally have few exceptions in their day-to-day practice include those on an automobile assembly line or as a fry cook at McDonald’s. At the other end of the spectrum if a job has a great deal of variety, a large number of exceptions can be expected. Typically this characterizes top management positions, consulting jobs or the work of those who make a living by putting out fires on off shore oil platforms. So, task variability appraises work by evaluating it along a variety routine ness continuum.
•
the seco second nd dime dimens nsio ion n asse assess sses es the the type type of Task/Problem Task/Problem Analyzability Analyzability — the
proc procedu edure ress foll follow owed ed to find find succ succes essf sful ul meth methods ods of resp respon ondi ding ng adeq adequat uatel ely y to task task exceptions. The search can at one extreme, be described as well defined. An individual can use logical and analytical reasoning in search for a solution. If you are basically a high Bstudent and you suddenly fail an exam given in a course, you logically analyze the problem and find a solution. In contrast, the other extreme would be ill-defined problems. If you are an
architect
assigned
to desi design gn a buil buildi ding ng to conf confor orm m to stan standa dard rdss and and cons constr trai aint ntss that that you you neve never r hear heard d abou aboutt or enco encoun unttered ered bef before, ore, you wil will not not have have any any form ormal sear search ch technique to use. You will have to rely on your prior experience, judgment and intuition to find
a
solution.
Through
guesswork
and
trial
and
error,
you
that that might might find find an accept acceptabl ablee choice choice.. Perrow Perrow called called this this second second dimens dimension ion proble problem m analyzability ranging from well defined to ill define.
These two dimensions — task variability and problem analyzability — can be used to contrast a two by two matrix- shown in fig 7.2 below. The four cells in this matrix defined represent four types of technology, routine, engineering, craft and easy to analyze Lout the problems.
Routine technologies are characterized by little task variety and the use of objective,
computational procedures the mass — production processes used to make steel or auto mobiles or refine petroleum belongs in routine category. A bank’s teller’s job is also an example of activities subsumed under routine technology. Engineering technologies have a large number of exceptions, but they can be handled in
took at a rational and systematic manner. The construction of office buildings would fall in this cell, as would be the activities performed by tax accountants. Craft technologies (Cell 3): deal with relatively difficult problems with a limited set of
excep excepti tion ons. s. This This woul would d incl include ude shoe shoe maki making, ng, furn furnit itur uree rest restor orin ing, g, or the the work work of performing artists. Non-routine technologies: are characterized by many exceptions and difficult to analyze
probl problems ems.. Exampl Examples es of non-rou non-routi tine ne techno technolog logies ies would would be strate strategic gic planni planning ng basic basic
rese resear arch ch acti activi viti ties es.. In summ summar ary, y, Perr Perrow ow argu argued ed that that if a prob proble lem m can be studi studied ed system systemati atical cally ly using using logica logicall and ration rational al analy analysis sis cells cells 1 or 2 would would be approp appropria riate. te. Problems that can be handled only by intuition, guesswork or unanalyzed experience requires the technology of cell 3 or 4. Similarly if new, unusual, or unfamiliar problems n in a appear regularly, they would be in either cell 2 or cell 4. If problem are familiar, then cell 1 or 3 are appropriate.
Perrow Perrow also also propose proposed d that that task task variab variabili ility ty and proble problem m analyza analyzabil bility ity were were positiv positively ely correlated. By that he meant that it would be unusual to find instances where tasks had a very few exceptions and search was clearly unanalyzable or where tasks had a great many exceptions and search was well defined and easily analyzable. This means that the four technologies can be combined into a single routine, non-routine dimension. This is shown in the figure 2 as a diagonal line.
Task variability Few Exceptions
Many Exceptions
Craft
C
III defined
4 Non-route 3
Well defined
2
Routine 1 Routine
Figure 7.4. Perrow’s Technology Classification
Technology and Structure
Engineering
Perrow Perrow argued that control control and co-ordination co-ordination methods should should vary with technology technology type. The more routine the technology, the more highly structured the organization should be. Conversely, Conversely, non-routin non-routinee technology technology requires requires greater greater structural structural flexibility. flexibility. Perrow Perrow then identified the following as the key aspects of structure that could be modified to the technology. •
The amount of discretion that can be exercised for completing tasks
•
The power of groups to control co ntrol the units goals and basic strategies.
•
The extent of inter-dependence between these groups.
•
The The exte extent nt to whic which h thes thesee group groupss engag engagee in co-o co-ord rdin inat atio ion n of thei theirr work work
using either feedback work or the planning of others.
The above means that: •
The most routine technology (cell 1) can be accomplished best through standardized
co-ordination and control. These technologies should be aligned with structures that are high in both formalization and centralization. •
NonNon-ro rout utin inee tech technol nolog ogie iess (cel (celll 4) dema demand nd flexi flexibi bili lity ty.. Basi Basica call lly y they they woul would d be
decentralized have high interaction among all members, and be characterized as having minimum degree of formalization. •
Craf Craftt tech techno nolo logy gy (cel (celll 3) requ requir ires es that that prob proble lem m solv solvin ing g be done done by thos thosee
with the greatest knowledge. •
Engineering technology because it has many exceptions but analyzable search process,
shou should ld have have deci decisi sion onss cent centra rali lize zed d but but shou should ld main mainta tain in flex flexib ibil ilit ity y thro throug ugh h low low formalization.
Table 7.5 Perrows: Technology — Structure Predictions
Cell
Technology Formalization
Centralization
1 2
Routine High Engineering Low
High High
3
Craft
Low
4
Moderate
Non-routine Low
Low
Span
of Co-ordi rdinat nation ion
and
control
control
Wide Moderate Moderate-
Planning and rigid rules Reports and meetings
wide Moderate narrow
Training and meetings - Group
norms
meetings
NB: Perrow did not test his work but others did for example •
One study of 14 medium sized manufacturing firms supported Perrow’s prediction.
•
Another covering 16 health and welfare agencies confirmed that organizations do
have diverse technologies. •
That That the the more more rout routin inee the the work work,, the the more more like likely ly deci decisi sion on maki making ng will will be
centralized. •
Another study covered state employment service agencies. In this study technology
was operationalized at the unit rather than the organizational level, in the belief that if routine ness of technology actually affects structure, this effect would be greatest at the unit level. The results of this study also proved consistent with Perrows predictions; work that was high in routines was associated with high formalization.
Evaluation of Perrow’s Typology
At the general level, i.e. where technologies can be differentiated on the basis of routine ness ness and and wher wheree more more rout routin inee techn technol olog ogie iess are are asso associ ciat ated ed with with high higher er degr degrees ees of formalization and centralization — there is evidence to support Perrows theories.
8.1 Introduction
In this lecture we shall define organizational change and explain the various processes of implementing change. We shall also discuss the main causes of change and give an insight into the causes of resistance to change. chan ge. Lastly we shall also discuss in detail the meaning of orga organi niza zati tiona onall deve develo lopm pmen entt and and the the main main techn techniq iques ues of achi achievi eving ng orga organi nizat zatio ional nal
and
development.
8.3. What is Organizational Change?
Accor Accordi ding ng to Daft Daft (198 (1986) 6),, orga organi niza zati tiona onall chang changee is the the “ado “adopt ptio ion n of a new new idea idea or beh behav avio iour ur by an orga organi niza zati tion on”. ”. Simi Simila larl rly, y, Hodg Hodgee
and and
Anth Anthon ony y (198 (1988) 8) defi define ne
organizational change as an alteration in the status quo. Change occurs mainly because organisations as open systems, must frequently cope with shifts in key environmental domains. If they do not change to cope with shifts in important environmental domains, they may face serious problems and they may even die. By adapting to new conditions, they can continue to grow and prosper. Thus organisations must change to cope with changes changes generat generated ed by change changess in their their extern external al environ environmen ment, t, which which are continu continuous ously ly changing. Changes may also be generated by the internal environment (from within the organisation). Change generated from within the organization is endogenous, while that generated from without is known as exogenous.
Organizations face a dilemma with respect to change. On the one hand, organizations desir desiree chan change ge in orde orderr to rema remain in compet competit itiv ive, e, adopt adopt more more effe effect ctiv ivee and and effi effici cien entt technology and methods; on the other hand, organisations resist change because they desire stabil stability ity and predic predictab tabili ility. ty. Organi Organisat sation ionss desire desire stable stable output output,, predic predicable able costs, costs, and financial stability. The key question for the organization thus becomes how can we achieve desired change without disrupting current stability?
A question that arises is whether organisations bring about change deliberately or change is brought about by the environment. In other words, do organisations actually determine their own fate with regard to change? Can organisations actually adapt to environmental change or does environmental change occur in such a manner that many organizations cannot adopt, and therefore they die. The central issue here is between environmental determinism and freedom of organisational choice and adaptation. This idea builds on Darwin’s theory of natural selection, which holds that only those species that can adjust to environmental change survive; they are selected for survival by the environment. Those that are not selected die. This theory argues that there is little, if any, adaptation (i.e.
planned change by the organization). The environment weeds out those organisations that do not fit.
Accor Accordi ding ng to Hodge Hodge and and Anth Anthon ony y (1988 (1988)) alth althoug ough h orga organi niza zati tiona onall ecol ecology ogy’s ’s main main contribution is its dynamic environmental conceptualisation, this does not “displace all other explanatory variables”. In much of research, ecological variables are combined with institutional and structural variables to explain organisational adaptation. This paper takes the position that organisational change can be planned and managed to a certain extent by the managemen management. t. To the extent that change can be planne planned d then then the uncertai uncertainty nty and instability associated with change can be reduced . Organizational change is therefore;
-
alteration of the status quo
-
vary varyin ing g or or mod modif ifyi ying ng the the cur curre rent nt stat statee of of the the orga organi niza zati tion on aspe aspect ct
-
reac reacti tive ve chan change ge-- chan change ge in resp respon onse se to exte extern rnal al circ circum umst stan ance cess
-
Proa Proact ctiv ivee chan change ge:: chan change ge pri prima mari rily ly cau cause sed d by desi desire re by by man manag agem emen entt to cha chang nge. e.
-
Orga Organi niza zati tion onal al chan change ge can can infl influe uenc ncee and be inf inflluenc uenced ed by seve severral fea featu turres of
the organizational life. -
Chan Change ge in in one one par partt of an org organ aniz izat atio ion n affe affect ctss peo peopl plee and and proc proces esse sess in in anot anothe her r
-
Chan Change ge can can be be tri trigg gger ered ed by a num numbe berr of of ext exter erna nall and and inte intern rnal al fact factor ors. s.
8.4. Sources of Organizational Change
Organi Organizat zation ional al change change can be caused caused by either either extern external al or extern external al forces forces or both. both. External triggers include: change in demand for an organization’s products or services (as change a result of changing consumer preferences, action by competitors, government etc), threatening tactics of competitors, arrival of a new corner in the market, or take over of the busine business. ss. ‘Inte ‘Interna rnall Trigger Triggerss includ include: e: need need to change change strate strategy gy as a result result of extern external al forces, need to introduce a new culture in the organization, need to improve productive efficiency, need to improve the quality of product or services, or the need to improve standards. Change can have an impact on various aspects of an organization. It can impact on task, task, techno technolog logy, y, struct structure ure or people. people. Organi Organizat zationa ionall growth growth or retren retrenchme chment nt as well as new government action often changes structure. Changes in technology can also
affect people’s attitudes, emotions, skills, abilities, expectations and interest. Seldom is the impact of change neatly compartmentalized as affecting just one or two parts of an organi organizat zation ion.. The arrows arrows in the diagra diagram m below below indica indicate te that that change change usuall usually y has an interactive, dynamic effect on the other parts of the organization.
Structure
Task
Change
Technology
People
Fig.8. 1: The Impact of Change on Aspects of the Organization.
Technology changes pertain to the organization’s production processes. These changes are designed to make the transformation process more efficient or to produce greater volume. Changes in technology involve new techniques for making products or services. Product (task) changes pertain to the product or service outputs of the organization. New products include small adaptations of existing products or entirely new product lines. Structure changes changes pertai pertain n to the changes changes in the organi organizat zation ion struct structure ure,, goals, goals, polici policies, es, reward reward system systems, s, labor labor relati relations ons,, linkag linkagee devices devices etc. etc. They They also also pertai pertain n to the changes changes in the supervision supervision and management management of the organization. organization. People changes refer to the changes the attitudes, skills, expectations and behavior of employees. It is important to note that each type of change often influences the others. A new product may require require changes changes in the product production ion technol technology ogy.. A change change in the structur structuree may influence the attitude and skills of employees.
Althoug Although h change changess affect affect each each other, other, most most changes changes can be classi classifie fied d as techno technolog logy, y, structure, people or task depending upon the primary target.
8.5 Need for Organizational Change
Organi Organizat zation ionss face face a continu continuous ously ly changi changing ng environ environmen mentt for example example compet competito itors rs intr introd oduc ucee
new new
prod produc ucts ts,,
new new
prod produc ucti tion on tech techno nolo logi gies es are are
deve develo lope ped, d,
poli politi tica call
environments change, economic environment changes e.g. economic growth, economic depression, increase or decrease in interest rates etc.
The organization’s internal environment also changes eg employees retire or resign, or inter group conflicts arise
These changes and others give managers daily challenges. The managers must constantly respond to those challenges. They meet these challenges by implementing one or more of the organizational change and development techniques namely the three phase the four phase or the six phase processes. Each of three processes is discussed below.
8.6 Organization Change Processes
Ther Theree are are THRE THREE E proc proces esse sess of organ organiz izat atio ional nal chan change ge freq freque uent ntly ly enco encount unter ered ed in vices, management. These are: 1.
The th three ph phase process by Kurt Lewis
2.
The four phases process by Mint berg
3.
The six phase process by Greiner
8.6.1 Kurt Lewis’s Three Phase Process
Proposes that every human grouping has some forces within it which help keep it in balance and provide it with stability. On the one hand there are forces that force it to Forces resisting — maintaining stability e may maintain stability change and others which provide it with a reason to change (the force -field theory) Equilibrium
Process for change
Equilibrium
Field force theory -
all all beh behav avio iorr is is the the res resul ultt of of an an equ equil ilib ibri rium um betw betwee een n the the two two set setss of of oppo opposi sing ng for force cess
(driving forces and restraining forces)
Driving forces: push one way to attempt to bring about change Restrai Restraining ning forces: forces: pus push h the the othe otherr way way in orde orderr to mai maintai ntain n the the stat status us quo quo
Lewis suggests that the best way to implement change is to use a three —step approach to change the behavior of those opposing the change as follows.
Step 1: Unfreezing existing behavior by persuading and convincing those with restraining
force Step 2: - Changing Behavior by Adopting new Attitudes
-
implementing the changes
-
use of a change agent
Step 3: Refreezing - reinforcing continuously convincing the organizational members that
change is not only necessary and desirable, but inevitable. This can be consolidated by various support mechanisms such as encouragement, participative management styles etc. 8.6.2. Mint Berg’s Four Phase Change Process Mint berg identifies a four-phase process of change as follows;
Stage 1: Identification of the need for change
During the first phase of the change process management identifies the need for change Stage 2: Identification of the alternatives In the second phase management identifies the various alternatives of implementing the change Stage 3: Evaluation of the various alternatives
In this phase the various alternatives are evaluated using a given criteria and the most efficient alternative is selected for implementation
Stage 4: Implementation
During this phase change is implemented
8.6.3 Greiner’s Six Phase Change Process Greine Greinerr identi identifie fied d six phases phases common common to succes successfu sfull change change effort effortss each involv involving ing a stimulus to the power structure and a reaction from the power structure of an organization. A general overview of this process is discussed d iscussed here below.
Phase Phase 1: Pressur Pressuree and Arousal: Arousal: The process begins as a result of pressure on top
managem management. ent. These These press pressure uress may arise arise either either extern externall ally y or intern internall ally. y. In succes successfu sfull changes, the result is the same — arousal to take action.
Phase 2: Intervention and Reorientation: Arousal in itself does not automatically ensure
pro prope perr resp respon onse se.. It is quit quitee like likely ly that that top top mana manage gers rs will will be temp tempte ted d to see see problems as temporary or to blame them on other things. As a consequence, successful change typically involves intervention by an outsider. It is important that this individual be known for his improvements and that he or she enters an organisation at the top or as a consultant who reports directly to the highest level of management. Phase 3: Diagnosis and Recognition: This phase is characterized by a shared approach to
power as the newcomer, with top management support and active personal involvement, enga engage gess
mem members bers
at
seve severa rall
lowe lowerr
level evelss
in
col collabor aborat ativ ive, e,
fact act
findi inding ng,,
for problem solving discussion in order to recognize and diagnose current and potential organizational problems, as well as to reduce any anticipated opposition.
Phase 4: Invention and Commitment: During this phase, attention switches to the
invention of new solutions capable of generating sustained commitment to new courses of acti action on.. As in prev previo ious us phase phase,, the the newco newcome merr play playss an activ activee role role,, invo involv lvin ing g all all management levels in developing new ideas and methods for solving problems and taking action. Solutions are based on shared power, emphasizing participation in the invention the of group solutions to the problems identified in phase 3. Such collaboration has been shown shown to be part partic icul ular arly ly effe effect ctiv ivee in deve develo lopi ping ng quali quality ty solu soluti tions ons and and sust sustai aine ned d commitment to action.
Phase 5: Experimentation Experimentation and Search: In this phase solutions identified in phase 4 are
tested for credibility on a small scale before they are introduced on a companywide basis. In addition, the method previously used to generate solutions (interaction and shared
power) is carefully evaluated. Further, rather than implementing major changes at the top, numerous small changes are introduced at all organizational levels on an experimental basis. Phase Phase 6: Reinforc Reinforceme ement nt and Accepta Acceptance: nce: This This last last phase phase is an outgr outgrow owth th of the the
acceptance and internalization of change as previously experienced. As change is found to be successful, and as participants support grows, it is introduced on a much larger scale, ultima ultimatel tely y being being absorb absorbed ed into into all parts parts of an organi organizat zation ion.. Accord According ingly ly,, this this phase phase involves reinforcement from positive results, leading in due course to an acceptance of new practices. Greiner suggests that apart from the change itself, the most significant outcome of this phase is greater acceptance at all organizational levels of the use of shared power as an approach for introducing change.
8.7 Additional Aspects of Successful Change
Another way of looking at the change process and the elements necessary for change to occur is by referring to the views of Daft (1986), Daft concedes that in order for a new idea or behavior to be adopted, a series of activities has to be completed. If any one of these
ele element ents
i)
is
missing
the
change
process
will
fail.
These
elements nts
are:
Need: A need for change occurs when managers are dissatisfied with current
performance. ii)
Idea: An idea is a new way of doing things. The idea may be a model, concept or
plan that can be implemented by the organization. The idea may be a new product, a new machine, or a new technique for managing employees. iii)
Proposal: A proposal occurs when someone within the organization requests the
adoption of a new behavior, idea, or technique. The proposal gives the organization the opportunity to decide if it wants to try the ch ange. iv)
Decision to Adopt: A decision occurs when the organization makes a choice to
adopt the proposed change. v)
Resources: Human force and activity are required to bring about change. Change
requires resources. Change does not happen on its own. In order for a change to be successfully proposed and implemented, resources must be allocated to it.
8.8. Principles of Successful Organizational Change
Margulies and Wallace drawing on an in-depth analysis of techniques and applications of organization organizational al change offer several guiding guiding propositi propositions ons on successful successful organizational organizational change Proposition 1: planned change efforts are much more likely to be successful if initiated
and supported by the top management of an organization.
smoothly when those who will be affected are all Proposition 2: Changes will flow most smoothly brought into the process at the earliest possible stage.
Proposition 3: Successful changes require time and repeated effort. That is, before new
becoming successfully incorporated as an ongoing part of organizational life, a change effort will typically require reinforcement over some period of time.
Proposition 4: A successful change requires careful monitoring to secure accurate with
feedback concerning intended outcomes. No matter how good a job one does of initially selecting a change strategy and facts, something-unexpected will eventually occur during impl implem emen entat tatio ion. n. Only Only by care carefu full lly y moni monito tori ring ng the the proce process ss can can one one ident identif ify y the the unexpected in a timely fashion and react to it intelligently.
8.9 Resistance to Change and Dealing with Resistance to Change
8.9.1 Resistance to Change
Although change is a universal and an inevitable phenomenon, it rarely occurs in a smooth, balanced fashion. Resistance to change is a frequent and natural occurrence. The paragraphs that follow discuss four of the most common reasons for resisting change.
Parochial self-interest: self-interest: Virtua (a) Parochial Virtually lly all organi organizat zation ional al member memberss can be expect expected ed
to behav behavee in ways ways that that will will maxi maximi mize ze thos thosee goal goalss that that they they pers person onal ally ly consi conside der r most most impo import rtan antt.
Cons Conseq eque uent ntly ly,,
to
the ext extent ent
that hat
all all
prop propos osal alss for chan change ge
order represent a threat to the status quo, individuals and groups are likely to resist if they believe they stand to lose something of value as a result. In such circumstances, the part partie iess invo involv lved ed will will for for the the most most part part focu focuss on thei theirr own own self self inte intere rest st,, and and only only incide incidenta ntally lly on the overall overall good of the organi organizat zation ion.. The follow following ing are some some of the personal goals, that when threatened, will almost inevitably provoke resistance; power, money, prestige, convenience, security etc.
(b) Lack Lack of und underst erstandi anding ng and trust: People also tend to resist when they do not
understand the intended purpose, mechanics, or consequences of a planned change. (c) Different assessments: Resistance to change frequently occurs when organizational participants differ in their evaluation of associated costs and benefits resulting from a proposed change. (d) Low tolerance for change: Opposition may stem from a low tolerance for change. Differ Different ent people people have have varyin varying g abilit abilities ies to absorb absorb change. change. Unknown Unknown conseque consequence ncess of
change may present a psychological threat to many individuals challenging their sense of adequacy as well as threatening their self-esteem.
8.9.2 Dealing with Resistance to Change
There are six methods suggested by Bedeian (1983) to influence participants to accept changes. These methods are briefly discussed below. i) Ed Educat atio ion n is the the shar sharin ing g of know knowle ledg dgee or Educ ucat atio ion n and and Comm Commun unic icat atio ion n Educ perception that a change initiator has acquired through means not typically available to other members of his or her general organization. This approach involves securing rele relevan vantt fact facts, s, elim elimina inati ting ng misu misunde nders rsta tandi nding ng due to inco incorr rrec ectt or inco incomp mple lete te information and resolving difficult viewpoints through discussion.
ii) Participation and Involvement This involves the participation of potential resisters in the planning and implementation of a proposed change. This method is based on the the notio notion n that that the the most most effe effect ctiv ivee way way to redu reduce ce oppo opposi siti tion on and and to engen engender der commitment to a proposed change is to work collaboratively with the members of the targeted system.
Facilitation and Support: This involves the use of facilitative and supportive skills. iii) Facilitation
Particularly appropriate when resistance develops as a result of fear and anxiety, this method may be traced to the interest stirrings of human relation’s movement.
iv) Negotiation This involv involves es the use of covert covert attempts attempts to side side Negotiation and Agreement: Agreement: This step step pote potent ntia iall resi resist stan ance ce to chang change. e. Mani Manipu pula lati tion on is not not simp simply ly a matt matter er of persua persuasio sion n but more more a devious devious tactic tactic for persua persuadin ding g differ different ent minded minded groups groups when that a proposed change should be adopted. As such, manipulation involves and supporting a position through slanted appeals to the particular interests of a targ target et syst system em.. Sele Select ctiv ivee dist distor orti tion on of info inform rmat atio ion n by both both omis omissi sion on and and commi commiss ssio ion n may may be invo involv lved ed.. In addi additi tion on fact factss and and emot emotio ional nal appea appeals ls most most likely to be convincing to the principal parties may be consciously misrepresented. Co-operation
may
be
classified
as
a
form
of
manipulation.
Absorp Absorptio tion n of variou variouss key resist resisters ers into into an organi organizat zation ion’s ’s select selection ion making making structure has long been a popular method to avert opposition.
Explicit and implicit implicit Coercio Coercion: n: This v) Explicit This meth method od assu assume mess that that ther theree is a basi basicc
disa disagr gree eeme ment nt and and that that the the prin princi cipa pall part partie iess invo involv lved ed are are oper operat atin ing g from from relatively fixed positions. Typified by at least temporary abandonment of efforts at consensus, coercion involves the use of force or threats or both to compel acceptance of an enacted change. Tactics involved may include roach violent disagreements as well as threatened firings, transfers and loss of e to promotion possibilities. Coercion is generally used sparingly in practice.
8.10. Creating a Climate of Total Organizational Change
In order for a meaningful and total organizational change to occur it is important not only to adhere to above methods of managing change, it is also important to ensure that a new climate and culture of people in the organization is created. Climate refers to the way people behave and think and culture refers to the values of people in the organization. For an effective change to occur, both the ways people behave and think, and their values, must change. The more these values and beliefs of people can be changed, the more organizational change can be achieved.
8.11 Organizational Development
Organizational development is a technique of changing the people’s culture, knowledge, behavior, values and attitudes so that the people adopt new values that espouse (enhance) trus trustt and and openn opennes ess, s, and open open and and demo democr crat atic ic lead leader ersh ship ip styl styles es.. It also also chang changes es mana managem gement ent styl styles es from from dict dictat atori orial al to democ democra rati ticc styl styles es.. Accor Accordi ding ng to Benn Bennin in,, organi organizat zation ional al develo developme pment nt is “a respon response se to change change using using a comple complex x educati educational onal strategy intended to change the beliefs, attitudes, values and structures of organizations so that they can better adapt to new technologies, markets, and challenges and the dizzying rate of change itself.
8.11.1 Organizational Development Techniques
This mainly refers to changing the people. There are many techniques in use depending on the organization and the consultant. The four most widely used include. i)
Survey feedback
ii)
Confrontation meetings
iii)
Sensitivity training
iv)
The managerial grid
i) The Survey Feedback4Technique
In this this techn techniq ique ue a ques questi tion onnai naire re is used used to meas measur uree alti altitu tude dess of empl employ oyee ees. s. The The questi questionna onnaire ire is admini administe stered red by outsid outsidee consult consultant antss and the result resultss are sent sent to top management. The main aim is to find out the views of employees on certain issues. This inform ormation can
be
used
to
identify
the
existence nce
of some
probl oblem
for
example low morale and seek employees’ proposals of the solutions to the problems. They can also be used to follow up on the success or not of the proposed solutions. Some examples of attitude survey questions include:
- the hours of work here are okay( select one) •
Very low
•
Low
•
Average
•
Very high
•
High
- I am paid fairy compared with other similar companies(select one) •
Very low
•
Low
-
formalizat zation is is a problem in my depar partment
ii) The Confrontation Meetings
Confrontation meeting is a type of focused exercise in which the management group meets with employees to discuss and come to grips with problems that have arisen in the organization. A consultant is included in the meeting to help slash the issues that face the organization at any particular moment. A confrontation meeting usually begins with the consult consultant ant introd introduci ucing ng the subjec subjectt matter matter in genera generall terms, terms, emphas emphasizi izing ng the need need for comm commun unic icat atio ion, n, mutu mutual al trus trustt and and unde unders rsta tand ndin ing g and and the the need need for for memb member erss and and managem management ent to share share respons responsibi ibilit lity y for accomp accomplis lishin hing g organi organizat zation ion goals. goals. In such such meetin meetings, gs, discus discussio sions ns on organi organizat zation ion’s ’s operati operating ng proble problems ms are held, held, and soluti solutions ons proposed.
(iii) Sensitivity Training (or T-Group Training)
This This meth method od or tech techni nique que is a group group exper experie ienc ncee desi designe gned d to provi provide de maxi maximu mum m possib possible le opport opportuni unity ty for the indivi individual dualss to expose expose their their behavio behavior, r, give give and receiv receivee The feedback, experiment with new behavior, and develop awareness and acceptance top of self and others. It provides managers with sensitivity for themselves and others tam and with skills necessary to more effectively guide and direct changes in social for for
arra arrang ngem emen ents ts and and
rela relati tion onsh ship ips. s. It deve develo lops ps in mana manage gers rs the the
sens sensit itiv ivit ity y
the the under underst stan andi ding ng and and skil skills ls to part partic icip ipat atee effe effect ctiv ivel ely y both both as grou group p lead leader erss and and the member members. s. It also also enable enabless manager managerss discov discover er and develop develop tested tested princi principle pless and improved methods of human relations training.
Sensitivity training is arranged usually away from the job, no activities or discussion topics are planned and the focus is on the here and now issues. The participants are encouraged to portray themselves in the group rather than in terms of past experiences or future problems. The consultant or trainer sees to it that an environment of mutual trust, understanding and frankness is created
(iv) The Managerial Grid
This This meth method od is used used to brin bring g about about chan change ge in empl employ oyee ees’ s’ atti attitu tudes des and and valu values es.. The The techn techniq ique ue was was deve develo lope ped d by two two gent gentle leme men n Blake Blake and and Moul Moulto ton. n. The The basi basicc
objective of the program is to develop managers with a high concern for people and high concern for production. The program is carried out in six phases:
Phase 1: Consists of seminal training in a one-week conference where managers study
the theory of managerial effectiveness.
manager implem implement entss a climat climatee of opennes opennesss develop developed ed in phase phase I Phase II: The manager Phase III: The experiences of phase II are extended to include the interrelationship of
related organizational units
Phase IV: Top management works with other groups to develop an ideal model of
employee management relationship.
Phase V: During this phase tactics are developed of moving the company to the ideal
organizational model development in phase IV.
Phase VI: The achievement of phases I-V is evaluated ev aluated with the objective of identifying
weaknesses and taking corrective actions as necessary.
Therefore Therefore O.D is a strate strategy gy of impro improvin ving g organi organizati zationa onall effect effective ivenes nesss by means means of
behavi behaviour oural al science science approac approaches hes involv involving ing the applica applicatio tion n of diagnos diagnosti ticc and proble problem m solv solvin ing g skil skills ls by an exte extern rnal al consu consult ltant ant in coll collab abor orat atio ion n with with the the organ organiz izat atio ions ns management. It is an organization wide process that utilizes the techniques and approaches of the behavioural sciences i.e. psychology, social psychology and sociology in so far as they relate to the study at work in organizations. It involves the intervention of an external third party in the shape of a change agent trained and experienced in behavioural science applications in the work situation. It is aimed at organizational effectiveness, not just chan changi ging ng peop people le or stru struct ctur ures es for for the the sake sake of chan change ge.. The The chan change ge agen agentt and and the the organization must adopt a collaborative relationship — which means being open with one another, having a high degree of trust, and being prepared to work through conflict in a constructive way.
Role of the Change Agent
The success of any O.D program depends largely on the part played by the third party. The role ranges from the highly directive leader type of role to non-directive counseling role. In the first mentioned role, the third party will tend to prescribe what is best for his client, at the other extreme, he will tend to reflect on issues and problems back to his client clientss without without offering offering any judgment judgment himsel himself. f. He will will let the client client make make / sugges suggestt proposals. In between these extremes are several other possible roles, as indicated below:
Role of third party
Plans/prescribes
recommends/proposes
clarifies/reflects/ listens
The following are the qualities of a good third party in an O.D process -
Inte Intell llec ectt and pers person onal alit ity, y, in in parti particu cula larr the abi abili lity ty to to list listen en diag diagno nost stic ical ally ly,, and to to
apply rational approaches to problems and situations. -
Matu Mature re out outlo look ok in in term termss of awa aware rene ness ss,, and and acce accept ptan ance ce of of pers person onal al str stren engt gths hs and and
weakness. -
A pref prefer eren ence ce for for int interpe erperrsona sonall relat relatio ions ns bas based on mutu mutual al tru trusst and liki liking ng,, for
team teamwor work k rath rather er than than compe competi titi tiven venes esss and for for confl conflic ictt to be handl handled ed openl openly y and and constructively. -
Must have basi asic und understanding of behav havioral scie cience knowledge dge and mor more
gene genera rall lly, y, inte interv rven enin ing g
skil skills ls,,
pres presen enta tati tion on skil skills ls and and
abil abilit ity y to esta establ blis ish h and and
ion maintain comfortable relationships with a wide cross-section of people.
8.11.2 Benefits of an O.D Program
-
It ena enables an org organi anization to ado adopt to cha change in a way th that ob obtains the the ful full
commitment of the employees concerned. -
It can can lea lead d to to org organ aniz izati ation onal al str struc uctu ture ress tha thatt faci facili lita tate te empl employ oyee ee co-o co-ope pera rati tion on and and the the
achievements of task. -
It rele releas ases es late latent nt ener energy gy and and cre credi dibi bili lity ty in the the org organ aniz izat atio ion. n.
-
It can can imp impro rove ve und under erst stan andi ding ng of of org organ aniz izat atio iona nall obje object ctiv ives es by by emp emplo loye yees es
-
It can can impr mprove ove dec deciision sion makin aking g pro proce cess sses es and and skill kills. s.
-
It prov proviides des oppor opporttuni unities ies for man manag agem emen entt devel develop opm ment ent in the the cont context ext of real real
organizational problems -
It may st stimula mulate te more more crea creattive ive appr approa oach ches es to prob proble lem m solvi solving ng thr through oughou outt the the
organization. -
It usua usuall lly y inc incre reas ases es the the abi abili lity ty to mana manage geme ment nt grou groups ps to work work as team teams. s.
8.11.3 Principles of Implementing an O.D Program Successfully.
-
crea create te and and sust sustai ain n a sens ense of of urge urgenc ncy y abou aboutt the fut future ure
-
crea create te and and emp empow ower er a lea leade derrshi ship tea team m (a (a gui guidi ding ng coal coaliition tion))
-
develop a vision an and a strategy for for achieving it
-
constantly communicate th the new vision.
-
Empo Empowe werr emp emplo loye yees es to to help help the the chan change ge hap happe pen n by remo removi ving ng obs obsta tacl cles es suc such h 8 12 12 as
rest restrrict ictive
struc tructu turre,
lack ack
of
nece necess ssar ary y
skil kills,
infl nflexi exible ble
manag anager erss,
and and
unimaginative reward systems. -
Generating some benefits in the short term so that people can see some
tangible improvements on the way to achieving the end goal -
Consolidating short gains
-
Embe Embedd ddiing the the new new app apprroach oaches es in the the orga organi niza zati tion onss cul cultu turre.
8.12. Business Process Re-engineering (bpr)
8.12.1. What does BPR Involve?
BPR BPR is a stra strate tegi gicc appr approa oach ch to organ organiz izat atio ional nal chang changee where where the the entir entiree busin busines esss architecture of the, enterprise is restructured. It is a fundamental rethinking and a radical rede redesi sign gn of busi busine ness ss proc proces esse sess to achi achiev evee dram dramat atic ic impr improv ovem emen ents ts in crit critic ical al contemporar contemporary y measures measures of performance, performance, such as quality, quality, cost, service service and speed. BPR is vital, under modem conditions of customer expectations, intense competition and the pervasive nature of change. BPR processes include all the collection of activities that take one or more kinds of inputs and creates an output that is of value to the customer. Typical
proces processes ses includ includee orderi ordering, ng, buying buying,, manufa manufactu cturi ring, ng, product product develop developmen ment, t, delive delivery ry,, invoicing. The reengineering process tends to lead to the following changes in the way work is undertaken: -
Sever everal al jobs obs or or tas tasks ks beco becomi ming ng com combine bined d wi with relat elated ed tasks asks..
-
Work Worker erss bec becom omee more more invo involv lved ed in in deci decisi sion on mak makin ing g (em (empo powe werm rmen entt inc incre reas ase) e)
-
The The vari variou ouss step stepss in in a proc proces esss bein being g perf perfor orme med d in acc accor orda danc ncee with with the the nee needs ds of of the the
next process rather than in some pre-determined linear form. -
Proc Proces esse sess havi having ng sever several al versi version onss to to dea deall wit with h dif diffe feri ring ng cust custom omer er requ requir irem ement entss
-
Work is performed where it makes most sense.
-
A redu reduct ctio ion n in in the the numb number er of check checkss and and contr control olss ins insis iste ted d on on dur durin ing g the the proc proces ess. s.
-
The minim nimizat zation of reco econciliati ations (e.g. of orders) between een customers and
suppliers. -
A si single po point of of co contact wi with th the cu customer
-
Hybr Hybriid cen centtrali ralize zed d / dec decen enttral ralized ized ope operrati ations ons pre preva vaiil.
8.12.2. The Structural Changes Likely in a BPR
These are -
Work structures move away way from func unctiona onal departments towards pro process ess
some teams. -
Empl Employ oyee eess are are empo empowe were red d to to act act in ways ways that that were were pre previ viou ousl sly y contr control olle led d by by rule ruless
-
Empo Empowe werm rmen entt impl implie iess a willi willing ngne ness ss and and an an abili ability ty to to acce accept pt grea greate terr resp respon onsi sibi bili lity ty
for work outcomes -
Prep Prepar arat atio ion n for for work work impl implie iess a grea greate terr emp empha hasi siss on on edu educa cati tion on (i. (i.ee to to unde unders rsta tand nd the the
why) rather than on training (understanding the how) -
The focus for performance and payment shifts from activities to results
radical (expressed in terms of value created for the customers). -
Advancement within the organization is more likely to be based on the
ability to undertake the work rather than on performance in the current job. -
A culture change will occur in which the typical employee will see the
hat take customer as more important than the boss.
-
Orga Organi niza zati tion onal al str structu ucturres are are like likely ly to becom becomee flat flatte terr and and bur bureauc eaucrracie aciess less less
critical. -
Senior executives assume the role of culture leaders than financial score
cards -
The role of IT (Information Technology) will be vital in facilitating the
reengineering process. The personal computer, the photocopies, the fax machine, e -mail, and the mobile phones, all show the importance of IT in facilitating the BPR processes.
8.12.3. The Shortcomings of the BPR
BPR has been challenged on the following grounds: i)
Much Much of of wha whatt pas passses as BPR BPR is is not not so much much of proc proces esss eng engiineer neeriing, ng, but but proc proces esss
simp simpli lifi fica cati tion, on, is proc proces esss led led rath rather er than than visi vision on led, led, is not revol revolut utio iona nary ry just just an improvement of existing systems, and works with existing systems rather than challenging them. ii) ii)
BPR BPR as as prac practi tice ced d mak makes es peop people le wor work har harde derr, tha than n sm smart arter
iii)
It is used as a tool of downsizing
iv) iv)
Henc Hencee peo peopl plee bec becom omee vi victim ctimss rat rathe herr tha than n ben benef efic iciiarie ariess
v)
The The driv drivee to ple pleas asee the the cust custom omer er rat rathe herr than than the the bos bosss can can lead lead to to dys dysfunc functtiona ionall
consequences to the organization.
8.13. Ambidextrous Approach to Organizational Change 8.13.1 Meaning
In an ambidextrous approach to change, the change agent incorporates structures and management processes that are appropriate to both the creation and the use of the idea of change. For example the organization can behave in an organic way (or create organic structures) during the innovation and creation of new ideas, and then adopt mechanistic structures when the change is being implemented.
8.13.2 Justification
Organic structures such as decentralization and low formalization encourage creativity and innovation. On the other hand, mechanistic structures such as high centralization and high formal formaliza izati tion on stifl stiflee creati creativit vity, y, with with emphas emphasis is on rules, rules, procedu procedures res and regula regulatio tion n but results in efficiency and effectiveness. 8.13.3 Techniques for Encouraging Ambidextrous Change in Technology Change
i)
This means means that that an organi organizat zation ion create createss an organi organicc Switching Switching structures: structures: This
in stru struct ctur uree when when such such stru struct ctur uree is inte intend nded ed for for the the inno innova vati tion on of new new idea ideas, s, and and reverts to mechanistic structures during the implementation of the chang es. ii) ass assigned ned
Creative departments: departments: In some organizations, the creation of new ideas is
to
separate
dep departments nts
for
adop doption
by
oth other
departments.
Departments that initiate change are organically structured to facilitate generation of new ideas and techniques. Departments that are supposed to implement those changes tend to have mechanistic structures so as to achieve efficiency in the implementation.
General manager
Creative department Organic structure
Using department
Diagram 8.1: Creative Departments
iii)
Venture teams: These teams encourage creativity. The teams are often given a
separ separat atee loca locati tion on and and faci facili liti ties es so that that they they are are not not const constra rain ined ed by orga organi nizat zatio ional nal procedures. The teams may be given total license to establish new venture projects for any department. iv)
New New vent ventur uree fund fund:: A fund fund is crea create ted d to prov provid idee fina financ ncia iall reso resour urces ces for for
employees who can develop new ideas, products or business. Employees are given leave
and resources to go out of the organization and create new business opportunities for the organization organization.. Employees Employees can also use company labs and equipment equipment to develop develop a business business idea. If the idea is successful, the company can provide the necessary financial resources to start -up the business. v)
Corporate Corporate entrepreneurship: entrepreneurship: Here the company attempts to develop internal
entrepreneurial spirit, philosophy, and structures that will produce a higher than average number of innovations.
LECTURE NINE ORGANIZATION CULTURE 9.1 Introduction
In this lecture we shall explain the meaning of culture, its importance and its dimensions. We shall also discuss the relationship between culture and also propose methodologies of increasing culture in an organization.
9.3 Meaning of Culture
Organization culture is a pattern of values, beliefs and customs shared by members of an organization or group. It is often unspoken, but is clearly understood by members of the organization. It dictates how members are to behave. It is also unwritten. All organizations have culture, which has emerged over time. Culture generally evolves over time and begins with a founder or early leader who articulates and implements particular ideas and values as a vision, philosophy or business strategy. When these ideas and values lead to success they become institutionalized and an organization culture emerges that reflects the vision and strategy of the founder or leader. Over time, culture becomes b ecomes artifacts, stories, symbols and language of the organization.
9.3.1 Artifacts
These are the obvious features of an organization that are immediately visible to a new employee. They include sounds, behavior, language, products, rites and ceremonies. Rites and ceremonies are the elaborate, planned activities that make up a special event, and are often conducted for the benefits of an audience.
9.3.2 Stories
These are narratives based on time events that are frequently shared among organizational employees and told to new employees to inform them about an organization. Many stories are about company heroes who serve as models or ideals for serving cultural norms and values. Some stories are considered legends because the events are historic, and may have been embellished with fictional details. The stories are myths, which are consistent with the values and beliefs of the organization but are not supported by facts.
9.3.3 Symbols
A symbol is something that represents other things. Rites and ceremonies are symbols but symbols generally refer to physical aspects of culture.
9.3.4 Language
Language refers to sayings, metaphors and other forms of language used to convey of the special meaning to employees.
9.4. Importance of Culture
Cultu Culture re prov provid ides es memb member erss with with a sens sensee of orga organi nizat zatio ional nal ident identit ity y and gener generat ates es and commitments to beliefs and values. Culture integrates members so that they know how to relate to one another. Culture also helps the organization to adapt to the external comes environment.
9.5 Organizational Design and Culture
The culture of an organizational should reinforce the strategy and structural design that a new the organization needs to be effective within its environment. That is to say if the external Rites environment requires flexibility and responsiveness the culture should encourage are adaptability.
9.6 Dimensions I Dimensions I Categories Categories I I Types Types of Culture
The organization organization culture culture can be differenti differentiated ated into four categories categories based on the extent to which the competitive environment requires flexibility or stability and the extent to which the strategic focus and strength is internal or external. These categories are:
(i) Adaptability / entrepreneurial culture
This
type
of
cult ulture
is
cate ategorized
by
strategic
focu ocus
on
the
exte xternal nal
environment, through flexibility and change to meet customer needs. This type of culture encourages norms and beliefs that support the capacity of the organization to detect, interpret and translate signals from the external environment into new behavior responses. Innovation, creativity and risk- taking are valued and rewarded.
(ii) The Mission Culture
This type of culture is characterized by emphasis on a clear vision of the organization purpose and on the achievement of goals, such as growth, profitability or market share, to help achieve the purpose. A mission culture reflects a high level of competitiveness and profit making orientation. Its environmental characteristic is stability.
(iii) The Clan Culture
Has a primary a primary focus on the involvement and participation of the organization’s members. Emphasis is on the needs of employees as a route to high performance. Involvement and participati participation on are assumed to create create a sense of responsibil responsibility ity and ownership, ownership, which would lead to greater commitment to the organization. Its external environment is stable and therefore requires less flexibility. (iv) The bureaucratic culture
In this type of culture, symbols, heroes and ceremonies support cooperation, tradition and following established policies, and practices as a way to achieve goals. The organization succeeds by being highly integrated and efficient. There is a high level of consistency, conformity and collaboration among members. Strate Strategic gic focus focus is intern internal al rather rather than than extern external al and the extern external al enviro environme nment nt requir requires es stability rather than flexibility.
Table 9.1. Relationship between Environment, Strategy and Corporate Culture
Environmental need
Internal External
Flexibility Entrepreneur clan
Stability Mission Bureaucratic
9.8 Changing Organization Culture
Cultures do change. As the external and internal factors that affect or influence culture change, so culture will change. However, because culture is locked up in people’s beliefs, values and norms, cultural change will be slow and may not change in the same fashion or speed required to keep up with changes in the environmental factors. Since a successful culture is one based on values and assumptions appropriate to the environment to keep up with with rapi rapidl dly y chang changin ing g exte extern rnal al envi enviro ronm nmen ent, t, the the cult cultur uree must must ther theref efor oree chang changee of the or be changed appropriately. Cummings and Worley (2001) propose six practical steps a route for achieving cultural change ch ange as follows. i)
Formulate a clear strategic vision. Effective cultural change should start greater
form a clear vision of the firm’s view strategy and of the shared values and le and behavior needed to make it work. ii)
Display top management commitment — Cultural changes must be managed
from the top of the organization; senior manag ers need to be committed to the new values. iii)
Senior manage managemen mentt must must Mode Modell cultur culturee change change at the highe highest st level level — Senior
communicate the new culture through their own actions.
iv)
Cultural al Modi Modify fy the orga organiz nizati ation on to suppo support rt the cultur culturee change changess — Cultur
chan change ge
must must
be
acco accomp mpan anie ied d
by
appl applyi ying ng
modi modifi fica cati tion onss
in
orga organi niza zati tion onal al
structure, structure, human resource resource systems, systems, information information and control control systems, systems, and management management styles. v)
Select and socialize socialize newcomers and terminate deviants — One of the most
effective methods for changing culture is to change organizational membership. People can be selected in terms of their fit with the new culture. vi)
Develop ethical and legal sensitivity - Most cultural change programs attempt to
change change people’ people’ss integr integrit ity y and values values.. When When imple implement menting ing cultur cultural al change change progra programs, ms, organizations need to be aware of ethical and legal pitfalls. In other words, care should be taken to follow equity, ethical, and legal methods.
LECTURE TEN ORGANIZATIONAL GROWTH AND DECLINE
10.1. Introduction
In this chapter, we are going to define size, growth and decline. We also discuss two models of organizational growth and propose strategies for dealing with decline.
10.3 What is Organization Size?
Organizational size can be measured in many ways including: i.
Mark Market et sha share re — org organ aniz izat atio ions ns tha thatt dom domin inat atee the the mar marke kett plac placee are are cons consid ider ered ed lar large ge..
ii.
Number of branches: organizations wit with many branch nches in several towns are considered to be larger than single branch organizations.
iii. iii.
Numb Number er of of prod produc ucts ts:: orga organi niza zati tion onss with with var varie ied d prod produc ucts ts are are con consi side dere red d larg larger er tha than n
those with few products. iv.
Asset size is is al also co consi nsidered as as a measure of of si size.
v.
Numb Number er of ful full —t —time ime emp emplloyee oyeess can can als also be be use used d as as a meas measur uree of of si size. ze.
Use of full-time employees as a measure of size
Using the number of employees as a measure of size because it is simple to understand, is the most commonly used. All organizations have employees or people and it is a less subjective measure than many of the other measures.
10.4. Organizational Size and Complexity
When When organ organiz izat atio ions ns grow grow in size size the the orga organi niza zati tion on comp comple lexi xity ty as meas measur ured ed by the the following measures also increases a) Form Formal aliz izat atio ion n
Form Formal al comm commun unic icat atio ion n
in term termss
of rule rules, s, writ writte ten n
proc proced edur ures es etc etc
incr increa ease sess
b) Diff Differ eren enti tiat atio ion n — this is the process of dividing the work of the organization into
manageable units. This may include •
Vertical differentiation — differentiation on hierarchal levels
•
Horizontal differentiation — differentiation on functional departments
c) Specialization- concentration of tasks into specialist areas d) Rout Routin iniz izat atio ion n — development of a set of routines for the performance of work e) More More impe imperson rsonal al work work envir environm onment ent
More impersonal atmosphere in the work place Friendship groups tend to be limited to a few co-workers f) Le Less ss dire direct ct invo involv lvem emen entt by the the chie chieff exec execut utiv ive: e: In smal smalll orga organi niza zati tions ons the the
entrepreneur is involved or takes part in all operations. As the organization grows, this is no longer feasible and delegation becomes absolutely necessary.
10.5. Organizational Growth
10.5.1 What is growth?
Growth is the increase increase in size for an organizatio organization. n. The motives motives for growth growth (why do firms grow grow)) incl includ ude: e: adve advent ntur uree and and risk risk,, pres presti tige ge powe powerr and and job job secu securi rity ty,, incr increa ease sess compen compensa sati tion, on,
orga organi niza zati tiona onall
self self-r -rea eali lizat zatio ion, n,
to
achie achieve ve
a
stab stable le
envi enviro ronm nment ent,,
orga organi niza zati tiona onall surv surviv ival al,, incr increa ease sed d prof profit its, s, incr increa ease sed d reve revenue nue,, decr decreas eased ed cost costss via via economies of scale, and to achieve monopolistic power.
10.5.2 Growth Models
1 Lippitt — Schmidt model
This This mode modell sugg sugges ests ts that that orga organi niza zati tions ons norm normal ally ly expe experi rien ence ce thre threee stage stagess in thei their r development i.e. birth, youth, and maturity. As an organization enters each of these stages it encounters a predictive series of critical crises accompanied by recognizable key issues and results. A true measure of an organization’s stage of development is best gained through analysis of how it handles predictable organizational crises, rather than through simply making judgments based on its age or economic size. Consequently, a relatively small or newly founded organization may rapidly achieve developmental maturity, and a relatively large (or comparatively older) organization remain youthful.
2. Larry Grainer Growth Model
Greiner Greiner observed that organizatio organizations ns often go into trouble when the specific specific structure structure was not appropriate to the organizations stage of growth and development; He identified five phases through which organization pass through in their growth. For each phase there was dominant issues and crises that faced a growing organization.
Phase 1 Creativity
The organization is born. Emphasis is on creating a product and surviving in the market place. The founders are entrepreneurs and they devote full energies to the technical activ activit itie iess of produ product ctio ion n and and mark market etin ing. g. The The organ organiz izat atio ion n is info inform rmal al and and nonnon bureaucratic. Control is based on the owners’ personal supervision.
Leader Leadershi ship p crisis crisis:: when when the organi organizat zation ion starts starts to grow, grow, it faces faces a leader leadershi ship p crisis crisis because founders are not skilled or interested in management activities. They may restrict growth. A strong manager, who can introduce good management techniques is needed. If the leadership crisis is resolved, the organization grows into the next phase.
Phase 2 Direction
New management systems and clear organizational structures are introduced to guide the organization into more growth. Departments are established along with a hierarchy of authority, job assignments, and 4livision of labor. Communication may become more formal. Elements of bureaucracy become apparent.
The Autonomy crisis If the new management structures and techniques are successful
lower level employees find themselves restricted by the strong leadership and increasing bureaucracy bureaucracy.. Lower level managers begin to acquire confidence confidence in their own functional functional areas and want more discretion. The autonomy crisis occurs when top managers do not want to give up responsibility
Phase 3 Delegation
For the organization to grow into this phase, it must overcome the autonomy crisis. Top managem management ent must must delegat delegatee respon responsib sibil ility ity and decent decentral ralize ize decisi decision on making making.. Top managem management ent become becomess concern concerned ed with with top manage managemen mentt issue issuess such such as strate strategy gy and planni planning ng and leaves leaves the operati operations ons of the firm firm to lower lower level level manage managemen ment. t. Intern Internal al control and information systems are installed and used. Communication is less -“““ and more more form formal al.. New New prod produc ucts ts and and new new empl employ oyee ee’s ’s spec specia iali list stss may may be adde added. d.
The control crisis: as middle and lower — level managers become more autonomous,
top executives feel that they are losing control of the organization. In order to overcome the crisis crisis,, new techni techniques ques to coordi coordinat natee the increa increased sed number number of depart departmen ments ts and activities must be found.
Phase 4 Coordination
The respons responsee to the contro controll crisis crisis is sophis sophistic ticate ated d techni technique quess of coordi coordinat nation ion.. Staff Staff personnel and specialists are required to review company wide programs. Product groups or other decentralized units may be formed to improve coordination. Incentive systems based on profits may be implemented to ensure that managers work towards what is best for for the the over overal alll comp compan any. y. If the the new new syst system emss are are succe success ssfu ful, l, and effe effect ctiv ive, e, the the organization will grow to the next phase
The red — tape crisis: the proliferation of systems and programs may begin to frustrate
middle middle level level executi executives ves.. The organi organizat zation ion may become become over-bu over-burea reaucr ucrati atized zed.. The organization may seem too large to manage through formal program.
Phase 5 Cooperation
The solution to the red tape crisis is a new sense of collaboration and cooperation. Managers develop skills for confronting problems and resolving interpersonal differences and conflicts. Formal systems may be simplified and partially replaced by manager conferences and task forces.
10.6 Organizational Growth and other Organization Characteristics
Greater organization size is associated with (i) (i)
Incr Increa ease sed d num numbe berr of of mana manage geme ment nt level levelss (ve (vert rtic ical al comp comple lexi xity ty))
(ii) (ii)
Grea Greate terr numbe numberr of jobs jobs and and depar departm tment entss (hori (horizo zont ntal al comp comple lexi xity ty))
(iii (iii))
Incr Increa ease sed d speci special aliz izat atio ion n of skil skills ls and and fun funct ctio ions ns
(iv)
Gre Greater form ormalizati ation
(v)
Gre Greater decentr ntralization
(vi) (vi)
Smal Smalle lerr per perce cent ntag agee of of top top admin adminis istr trat ator orss
(vii) (vii)
Greate Greaterr percen percentag tagee of techni technical cal and and profes professio sional nal suppo support rt staff staff..
LECTURE ELEVEN
11.1 Introduction
In this lecture we are going to define power and politics in organizations and explain how power is used to achieve organization, group and individual interests.
11.3 Definition of Power
Power is defined as the possession of the potential for influencing others or the ability to act or produce some effect. Power is the probability that one actor within a social relationship will be in a position to carry out, his own will despite resistance, regardless of the basis on which this probability rests. Similarly, power is also defined as an actor’s
ability to induce or influence another actor to carry out his directions or any other norms he supports.
Hodge and Anthony (1985) also also define define power as the ability ability (poten (potentia tiall or actual actual)) to impose one’s will on others. It is the ability of one person to affect the behavior of someon someonee else. else. The author author identi identifie fiess five five bases bases of power. power. These These are reward reward power, power, coercive power, legitimate power, referent power and expert power. These bases are explained below.
All organizations are a complex mix of individuals and groups pursuing various goals and interests. Conflict is a natural and inevitable outcome of the close interaction of people who may have diverse opinions and values, values, pursue different different objectives objectives and have differential access to information and resources within the organization. Individuals and groups will use power and political activity to handle their differences and manage conflict.
Organizational power is often the results of structural characteristics.
Organizations are large complex systems that contain hundreds even thousands of people. Thes Thesee syst system emss have have a form formal al hier hierar arch chy y in whic which h some some task taskss are are more more impo import rtan antt regardless of who performs them. In addition some positions have access to greater resources or their contribution to the organization is more critical. Thus organizational power is vested in the position not in the person.
Authority is a form of power which is prescribed by the formal hierarchy and reporting
relationships. Authority has three properties viz;
It is vested in organizational positions
It is accepted by subordinates
It flows down the vertical hierarchy.
Vertical Sources of Power
All employees along the vertical hierarchy have access to some sources of power. There are three sources of vertical power;
Formal position-Cert position-Certain ain right rights, s, respons responsibi ibilit lities ies and prerog prerogati atives ves accrue accrue to the positions one holds in the organization. The amount of power provided to each pos posit itio ion n is pres prescr crib ibed ed into into the the orga organi niza zati tion’ on’ss stru struct ctur ural al desi design gn.. Allo Allowi wing ng people to make their own decisions increases their power. Access to powerful people in the organization also increases ones power.
Resources-Access Resources-Access to resources and having resources is power. Resources can be used as rewa reward rdss and puni punish shme ment nts. s. Reso Resour urce ce allo alloca cati tion on also also crea create tess a depen depende dency ncy relationship.
Network Network centralitycentrality Network cent centra rali lity ty mean meanss bein being g cent centra rall lly y loca locate ted d in the the organization and having access to information and people that are critical to the company’s success.
Horizontal Sources of Power
Horizontal power pertains to relationships across departments. Horizontal power is not defined by the formal hierarchy or the organization chart. Each department makes a unique contribution to organizational success. Some departments will have greater say and will achieve their desired outcomes faster than others. The theoretical concept that explains relative power is called strategic contingences.
Strategic Contingences are events and activities both inside and outside an organization
that are essential for attaining organizational goals. Departments involved with strategic contingences for the organization tend to have greater power. Departmental activities are import important ant when when they they provid providee strate strategic gic value value by solvin solving g proble problems ms or crises crises for the organization organization.. For example, if an organization organization faces an intense intense threat threat from law suits and regula regulati tions, ons, the legal legal depart departmen mentt will will gain gain power power and influe influence nce over organi organizat zation ional al decisions because it copes with such a threat.
Other sources of organizational power include; a) Depende Dependency ncy-In -Inter terdepa departm rtmenta entall depende dependency ncy is a key element element underly underlying ing relati relative ve power. When eight departments must come for help to the engineering department,
engineering is in a strong power position. In contrast, a department that depends on many other departments is in a low power position. b) Financial resources-control over various kinds of resources and particularly financial resources is an important source of power in organizations. Money can be converted into other kinds of resources that are needed by other departments. c) Cent Centra rali lity ty-c -cent entra rali lity ty refl reflec ects ts a depa depart rtme ment nt’s ’s role role in the the prim primar ary y acti activi vity ty of an organi organizat zation ion.. One measure measure of centra centralit lity y is the extent extent to which which the work of the department affects the final output of an organization. Centrality is associated with power because it reflects the contribution made to the organization. d) Non substitutability-this means that a department’s function cannot be performed by other readily available resources. If an employee cannot be easily replaced, his or her power is greater.
Uncert rtai aint nty y mean meanss that that deci decisi sion on maker makerss do not not have have Coping Coping with Uncerta Uncertainty inty.. Unce suffic sufficien ientt inform informati ation on about about enviro environme nmenta ntall factor factorss and they they have a diffic difficult ult time time pre predi dict ctin ing g exte extern rnal al chan change ges. s. Unce Uncert rtai aint nty y incr increa ease sess the the risk risk of fail failur uree for for the the organi organizat zation ional al respon response se and makes makes it diffic difficult ult to comput computee costs costs and probab probabili ilitie tiess associated associated with decision decision alternati alternatives. ves. In the face of uncertainty uncertainty,, little little informatio information n is available to managers on appropriate courses of action. Departments that cope with this uncertainty will increase their power. Just the presence of uncertainty does not provide power; reducing reducing the uncertainty uncertainty on behalf of other departments departments will. Forecasting Forecasting is one uncertainty. Sometimes technique for coping with uncertainty. Sometimes uncertainty uncertainty can be reduced by taking quick quick and approp appropria riate te action action after after an unpredi unpredicta ctable ble event event occurs occurs.. Other Other techni techniques ques departments can use to cope with uncertainties include; obtaining prior information, Prevention and Absorption.
meanss a depar departm tment ent can can redu reduce ce an orga organi niza zati tion onss Obtainin Obtaining g prior prior informa information tion mean uncertainty by forecasting an event. Departments Departments increase their power through prevention by predicting predicting and forecastin forecasting g negative events.
Absorption occurs when a department takes action after an event to reduce its negative
consequences.
Reward power is defined as power whose basis is the ability to reward. The strength of
the reward power one person holds over another increase with the magnitude of the rewards the latter perceives the former can mediate for him.
Coercive power involves one person’s ability to manipulate the attainment by another of
positive (or negative) rewards. The coercive power of one person over another stems from real or imagined expectation on the part of the latter that he will be punished if he fails to conform to the influence.
Legitimate power stems from internalized values in a person that dictate that another
person has a legitimate right to influence. The actual source of this legitimate power and the reasons subordinates feel they ought to obey might be tradition or may derive from the office the supervisor holds.
The referent power is based on the fact that one person identifies with and is highly
attracted to another. Finally expert power derives from the fact that one person is viewed as an expert in some area and others MUST therefore depend on him for advice and counsel. Expert power in an organization often stems from a person’s position in the communication network and from that person’s ability to control access to coveted information.
Power is an important concept in organizations as individuals exert power to get things
done. Power, once gained usually confers major benefits on those who hold it. Such persons can change the actions of many other people. In addition they often acquire high degree of status, with all respects, prestige and perks this implies. Given such outcomes, many people in an organization invest considerable time and energy to power.
11.4. Effects of Power on its Holders
Power exerts strong effects upon those who hold it and those over whom it is exercised In addition power affects a wide range of key organizational processes. An example o such such proces processes ses is negotia negotiatio tion. n. The most obvious obvious way in which which power power can affect affect negotiations is through differential possession of this capacity in opposing sides. To the extent one party to negotiations has an advantage in this respect it can shape the course of the exchange, and obtain an agreement favorable to itself. Another way in which power can affe affect ct negot negotia iati tions ons conce concern rnss the the rela relati tions onshi hip p betw betwee een n negot negotia iato tors rs and and thei their r constituents — the people they represent. If the persons representing an organization in a beginning situation are low in power, they will have to answer for their actions during negotiations. As a result they may feel constrained, and adopt cautious or defensive strategy. In contrast, if negotiators are high in power, they will be protected from such censure and may feel free to choose a more flexible and open approach. The result is that negot negotia iati tions ons invol involvi ving ng high high powe powerr repr repres esent entat ativ ives es from from both both side sidess may may be more more successful and more efficient than negotiations between persons of lower power.
11.5. Organizational Politics
Organizational politics can be defined as any actions taken by individuals or groups to gain power and so secure goals and outcomes that they personally desire. In other words politics is selfish in its orientation. Indeed this element of using or gaining power to furthe furtherr one’s one’s own or groups groups’’ self-i self-inte nteres restt is one of the major major factor factorss distin distingui guishi shing ng politics from other more legitimate uses of power. Politics is one way of using power- for personal or group gain.
In most organizations, politics is common. In fact, organizations appear to be highly politi political cal enviro environme nments nts in which which variou variouss person persons, s, groups groups and units units are consta constantl ntly y jockeying for position and power.. As a result promotions, salary raises and other rewards are not always distributed solely on the basis of merit. Major decisions are not always made on the basis of careful study of all available data. And the principles of fair play and rationalit rationality y do not always serve as the guiding precepts. Instead, Instead, “politics rules and rules with a vengeance” (Baron 1980).
Approaches to Organizational Politics
There are two approaches to defining politics. One is the negative approach. In this approach, approach, politics politics is seen as self-servi self-serving, ng, and involves involves activities activities that are not sanctioned sanctioned by, nor in the interest of the organization. In this view politics involves deception and dishonesty for purposes of individual self-interest and or for group interest without regard to organizational interest. In this view politics leads to conflict and disharmony within the work environment. This view of politics is widely held by lay people. Studies have shown that workers who perceive this kind of political activity at work within their companies often have related feelings of anxiety and job dissatisfaction. Studies also support the belief that inappropriate use of politics is related to low employee morale, inferior organizational performance and poor decision making.
The second second view view of polit politics ics sees sees it as natura naturall organi organizat zationa ionall proces processs for resolv resolving ing differences among organizations’ interest groups. They view politics as a process of bargaining and negotiation that is used to overcome conflicts and differences of opinion. In this this view view polit politics ics is very very simil similar ar to coalit coalition ion buildi building ng decisi decision on proces processes ses.. The organization theory perspective views politics in this positive way-as a normal decision making process. This approach views polities as simply the activity through which power is exercised in the resolution of conflicts and uncertainty. Politics is neutral and not necessa necessaril rily y harmfu harmfull to the organi organizat zation ion.. Thus, Thus, from from this this perspe perspecti ctive, ve, organi organizat zation ional al politics involves the activities to acquire, develop and use power and other resources to obtain the preferred outcome when there is uncertainty or disagreement about choices.
11.6 Techniques Used in Organizational Politics
People gain and exercise power in organizations in many ways. Among them includes:
(i) Coalitions — forming the right alliances
This involves joining forces with persons or groups who have something to contribute and who can be relied upon. To get such a group or persons requires search.
(ii) Choosing a powerful mentor
Having an experienced and powerful mentor is beneficial to the group or individual seeking this relationship and can be an effective tactic for acquiring power and reaching important goals. Since there are many more would be protégés than there are openings for them, competition in this regard can be intense:. However, given the substantial benefits yielded by the protection and guidance of a powerful mentor, efforts to establish such a relationship are well worthwhile.
(ii) Projecting the right image
This includes demonstrating a high level of competence, adopting a co-operative attitude and displa displayi ying ng good behavio behavior. r. For this this reason reason,, polish polishing ing one’s one’s image image often often yields yields valuable dividends where organizational politics is concerned. In fact, the old adage “nothing succeeds like success” is very applicable to organizational politics.
(iv) Establishing control over access to information
This is another highly effective tactic for gaining power that can be used both by individuals and by groups. This involves gaining control over vital information. Since information is the life blood of organizations, any one who can control its flow or access to it, acquires considerable power.
(v) Co-optation — neutralizing opponents
This tactic involves bringing people whose support is desired and who currently stand in the group’s way into the fold. Once they are made part of the group they become part of it, subject to its norms, and often adopt adop t its values and goals.
(vi) The use reciprocity
A guiding principle of all human relations- whether between individuals or groups — seems to be reciprocity. In general people treat others as they have been treated previously. By doing favors to others, or supporting them against opponents, it is possible
to place them in one’s debt, then at appropriate times (when their assistance is needed most) reciprocity can be invoked and requests for repayment made. (vii) The use of ‘dirty tricks’
This refers to strategies that most people view as deceitful, underhanded and dishonest — ones that violate the ethical principles of human beings. Included among dirty tricks are such steps as: a) Fals Falsel ely y attr attrib ibut utin ing g blam blamee for for nega negati tive ve outc outcom omes es to othe others rs (hol (holdi ding ng them them responsible for events they did not produce). b) b) Annou Announc ncin ing g one agen agenda da for for meet meetin ings gs,, but but then then foll follow owin ing g a tota totall lly y diff differ eren entt hidden one thus preventing opponents from being adequately prepared. c) Restricti Restricting ng the flow of inform information ation to others others or providin providing g them with with “misleading “misleading facts”. d) Spread Spreading ing false false rumors rumors about about their their personal personal lives, lives, lack of commit commitmen mentt to the organization etc.
Although the above tactics are highly objectionable they are quite effective and are commonly used by unscrupulous pe4rsons in their perpetual quest for power.
11.7 Some General Guidelines on the Ethics of Organizational Politics
As noted above some of the tactics in acquiring power in organizations can be quite ethical while others are quite unethical. Some tactics are manipulative, dishonest and in some cases even illegal. Others are quite reasonable and even desirable such as coalitions and co-optation. Such situations leave us with one issue: when are efforts to acquire and use power through organizational politics justified, and when are they inappropriate? The following principles suggested by Cavanaugh, Mob erg and Velasquez (1980) offer some general guidelines in this regard. i) Wheneve Wheneverr the use of politi politics cs is contempl contemplate ated, d, the followin following g questions questions about about their ultimate purpose should be addressed: are they designed to further purely selfish ends or will they help to promote organizational goals and values as well? To the ‘extent the former applies, the use of such tactics is unethical.
ii) ii) The The impa impact ct of poli politi tica call beha behavi vior orss upon upon the the righ rights ts of indi indivi vidu dual alss shou should ld be extent such such tacti tactics cs viola violate te basic basic hum human an right rights, s, they they are addressed. To the extent unacceptable.
iii) The relationship of political political behaviors to principles of equity equity and fair play should be considered. Almost everyone likes to feel that they will be judged by their merit. Further most persons like to behave that although all individuals would not finish together they can at least begin from the same point and run the same course. By their very nature political actions run counter to such views. Indeed in an important sense, their ultimate aim is that of establishing two sets of rules one for those in power and another one for those without it. To the extent that political tactics operate in this manner, and directly conflict with the principles of fairness and justice, they are unacceptable.
Thus political behavior in organizations is ethical only when it furthers organizational as well as individual goals; when it does not violate individual rights and when it is consistent with the principles of equity, fair play and justice.
CHAPTER TWELVE 12.1 Introduction
In this chapter we shall define conflict, competition and cooperation. We shall also discuss the functions and the dysfunctions of the three behaviors and attempt to compare and contrast cooperation and competition with conflict. We shall discuss the sources / causes of conflict and propose some principles of managing conflict.
12.3. Definition of Conflict
Conflict Conflict refers refers to the interactive, interactive, opposing opposing behaviors behaviors between two or more people,
group groupss or larg larger er soci social al syst system emss havin having g incom incompat patib ible le goal goals. s. Confl Conflic ictt is usua usuall lly y experie experience nced d as troubl troubleso esome me if not disrup disruptiv tive. e. Conflic Conflictt ranges ranges form form disagr disagreem eement ents, s, debates, to physical confrontation, murder, and or annihilations (elimination) i.e. can be presented in the form of a continuum) Conflict may be overt or covert, perceived or actual,
non-verbal
or
verbal,
active
or
passive,
manifest
or
latent.
There are five levels of conflict: Level I Intra-individual conflict Level II Inter personal conflict Level III Inter group conflict Level IV Organizational conflict Level V Conflict between larger social systems
12.2 Objectives
At the end of this lecture, the student will be able to:1. Define Define confli conflict, ct, compet competiti ition on and coopera cooperati tion on 2. Explain Explain the functions functions and and dysfunctio dysfunctions ns of conflict conflict cooperat cooperation ion and competit competition ion 3. Discuss Discuss the the basic basic ways ways of managin managing g conflict conflict in in organizati organization. on. The main causes of inter group, g roup, organizational, and larger social systems conflicts are i) Intr Intraa-In Indi divi vidu dual al confl conflic ictt ii) Inter Inter pers persona onall conf conflic lictt The main cause of interpersonal and intrapersonal conflict is stress. Thus in order to understand conflict one must understand stress.
What is intra-individual conflict
•
-
Opposin Opposing g behavio behaviorr between between diffe differen rentt sub-sy sub-syste stems ms of an indiv individu idual al
-
Can Can be be caus caused ed by str stress ess
-
Can Can als also o be be caus caused ed by the the fol follo lowi wing ng
Conflict due to frustration. Frustration occurs when a motivated drive is blocked before a person reaches a desired goal. The barrier may be either overt (outward, or physical) or covert (inward or mental)
Example
Need drive Goal
Goal Conflict: Three separate types of goal conflicts can be identified.
-
Approach - approach approach conflict - where the individual is motivated to approach
two or more positive but mutually exclusive goals. -
Approach - avoidance conflict - where the individual is motivated to approach a
goal
and
at
the
same
time
is
motivated
to
avoid
two
or
more negative but mutually exclusive goals -
Avoidance - avoidance conflict - where the individual is not clear about what
role he is supposed to play in his different capacities in an organization.
Interpersonal Conflict: There are four major sources of interpersonal conflict.
i)
Personal Personal differences: differences: This refers to differences in upbringing, cultural and
family family traditions, traditions, and socializati socialization on processes, processes,
education, education, values etc. These These
differences cause conflict among organizational participants. ii)
deficien ciency cy:: This his may be a resu resullt of misin isinfform ormati ation or Information def communication breakdown.
iii)
Role incompatibility: This may arise when the organizational organizational participants participants are
expected to perform incompatible roles in an organization. For example, a sales manager may be required to increase sales which means increasing output and stock levels. The production manager may be required to reduce stock levels to reduce costs. This may be a cause of interpersonal conflict. iv)
Environmental stress: In an environment characterized by scarce or shrinking
resources, downsizing, competitive pressures, high degrees of uncertainty, etc, interpersonal conflict could be amplified.
Inter group conflict
Inter group conflict arises when individuals belonging to one group interact, collectively or individually, with another group or its members in terms of their reference group identification. Causes of Inter group Conflict
i)
Competition fo for re resources
ii)
Task in interdependence
iii)
Jurisdic dictional am ambiguit uity
iv)
Status struggles — this conflict occurs when one group attempts to improve its
status, and another group views this as a threat to its place in its status hierarchy.
In an inter group conflict the following conditions prevail:
There is a clear distinction between “we” and “they”
A group that feels that it is in conflict with another group becomes more cohesive and pulls together to present a solid front to defeat the other group
The positive feelings and cohesion within the in-group do not transfer to the members of the out-group. The members of the out-group are viewed as the enemy rather than as neutrals
Threatened group members feel superior - they over-estimate their own strengths, and underestimate that of members of other groups
The amount of communication between conflicting groups decrease. When there is communication, it is characterized by negative comments and hostility.
If a group is loosing in a conflict, the member’s cohesion decreases and they experience increased tension in themselves. They look for a scapegoat to blame their failure on.
12.4 Competition Competition refers to rivalry between two or more organizations which is mediated by a
thri thrill lled ed part party. y. In busi busine ness ss,, the the thir third d part party4 y4 may may be a custo custome mer, r, a suppl supplie ierr of raw raw materi materials als,, or distri distribut butor, or, or potent potential ial employ employee. ee. In a free free market market system system,, compet competing ing organi organizat zation ionss attemp attemptt to influe influence nce third third party party decisio decision n throug through h variou variouss appeal appealss and offerings. A third party choice may be viewed as a vote of success for one of the competing organizations.
12.5 Cooperation 12.5.1 Management of Conflict
Cooperation consists of mutually reinforcing or supportive behaviors between two or
more people, groups or larger social systems. The behaviors may steal from a perception that collaboration will help obtain mutual goals, or just from predisposition to behave this way. Cooperative behavior may be verbal, or non-verbal or both. Cooperative behavior is usually active, although there may be degrees of competition. The groups, individuals or larger larger syste systems ms work work togeth together er in order order to enhance enhance,, the outcom outcomes es receiv received ed by each. each. Assistance is two way or reciprocal in nature. Example i. ii.
work worker erss work work tog toget ethe herr to to lift lift a heav heavy y loa load d manage managers rs use their their experti expertise se to reach reach an import important ant decisi decision on
The persons, groups or units involved coordinate their actions in order to reach goals and levels of performance they could not attain alone. Once the mutually desired goals are reached the benefits are shared among the parties in some agreed manner. Cooperation often pays, for all concerned. Cooperation Co operation results in synergistic benefits to all.
12.6 What Happens During Competition /Conflict?
In general the following development can be expected in groups competing for goals that only one group can attain, such as writing a contest or attaining a particularly attractive reward of some trend. 1) A WE —VERSU —VERSUS S — THEY THEY constell constellati ation on of attitu attitudes des and feelings feelings forms forms Both groups take pride in the group’s accomplishments and make favorable evaluation of “our “our”” grou group p in cont contra rast st to favo favora rabl blee or less less nega negati tive ve eval evalua uati tion onss of characteristics of other groups. 2) Each Each grou group p has has dist distor orte ted d perc percep epti tion onss and and judg judgme ment ntss about about the othe otherr group group Favorable information about the other group is either ignored or interpreted in favor of one’s own group 3) The perfor performan mance ce of one’s one’s own group is over estima estimated ted,, and the perform performanc ancee of the other group is underestimated 4) Each Each grou group p sees sees the othe otherr as the the enem enemy. y. In addi additi tion on to making making disp dispar arag agin ing g remarks within ones own group about the other groups, contact with the other
group is frowned upon and generally avoided. A great deal of energy is used to outwit the enemy 5) Group Group solida solidari rity ty,, coope coopera rati tion on and and mora morale le incr increas eases es If the the odds odds are are not not over over whelming
i.e.
-
group oups
in
conflict
or
comp ompeti etition
become
more
cohesive and mutual help increases 6) Negative Negative perceptions perceptions and feelings feelings carry carry over into noncompet noncompetitive itive situati situations ons 7)
Informati Information on is used to to erode the positi position on of the other other group. When When negotiati negotiations ons or intermediaries are used to negotiate between two groups in conflict information supplied by group members to their and representations is aimed at improving the relative position of ones group are rather than at clarifying matters or enhancing communication
8) Representat Representatives ives may become become either ‘heroes ‘heroes’’ or traitors.’ traitors.’ A represent representative ative who is negotiating with the other group and who gives in too readily to the position of the other group is branded a traitor
12.7 What Happens after the Competition /Conflict?
The following things happen to the winning group after the context is order 1. The winning winning group tends tends to be joyful, joyful, self-con self-congratul gratulatory atory,, and reveal in the the glow of victory. 2. The role role of the leader(s leader(s)) is enhance enhanced. d. Leaders Leaders are congratul congratulate ated, d, their status status is enhance nced,
and
group
members
are
eve even
more ore
willing
to
foll ollow
their leaders in the future. 3. The wining wining group becomes becomes complace complacent. nt. Characte Characteris ristic ticall ally y the winners winners bask in their success and do not critique their performance. They do not examine in what respects their performance might improve for future situations. They become fat and happy. 4. The winning winning group has little little empathy empathy for the the losers. losers. The winners winners typicall typically y cannot understand why the defeated group is so defensive and sullen. Further they cannot understand why the other group takes the matter so seriously.
12.8 What Happens to the Losing Group? The following things happen to the loosing. group.
1. Gloom settles settles over the loosing loosing group — the members of the losing group tend to be gloomy more so and subdued. 2. The judges judges are seen seen as unfair. unfair. The The judges who who hard done done the decision decision are are frequentl frequently y perceived by the losing groups as biased, unfair, and incompetent, and having no grasp of the problem. They are wrong, not group. 3. The The lead leader er(s (s)) lose lose in stat status us and and infl influe uenc ncee and and stat status us of the the lead leader er(s (s)) decl declin inee dramatically. Feelings may sometimes run so high that the leader or negotiator is deposed or resigns. 4. Some Some critiq critique ue of what what happened happened readily readily occurs. occurs. There There is some attempt attempt to assess assess the reas reason on
for
def defeat eat,
but but
cons consiider derable able
blam blamin ing g
of
the the
circ circum umst stan ance cess
or
the judges or of each other can occur. 5. Recr Recrim imin inat atio ions ns may may occu occurr with within in the the losi losing ng grou group. p. In the the losi losing ng grou group, p, mutu mutual al blaming for the defeat frequently occurs. The persons blame one another, and other group members support the criticism or defend the person attacked. Recriminations may proli prolifer ferate ate for a while, while, with with some some disorg disorgani anizin zing g and splint splinteri ering ng occurr occurring ing.. Sometimes the splintering leads to group dissolution. 6. The losing losing group has littl littlee empathy for for the winning winning group. group. They see see the celebrat celebration ion of the other group as excessive and they resent their self congratulatory behavior. 12.9 Functions and Dysfunctions of Conflict 12.9.1 Functions of Conflict
1. Conflict and competition are the vehicles for surfacing and resolving disagreements and different points of view 2. Conflic Conflictt can help help redefine redefine a group’ group’ss or organi organizat zation ion’s ’s mission mission and can also help help review group norms 3. Some Some levels levels of conflic conflictt can also also provid providee an energi energizin zing g and vitali vitalizin zing g dimens dimension ionss to organizational life 4. Conf Confli lict ctss can can also also -
Lead Lead to to prod produc ucti tion on of of bett better er ide ideas as
-
Lead Lead to sear search ch for for new new prod produc ucts ts
-
Lead Lead to bette betterr clar clarif ific icat atio ion n of of new news. s.
5. . Conflict Conflict can also also lead to group group solidarit solidarity y and cooperation cooperation against against the the other group group 6.
Conflict Conflict can can lead lead to morale morale and increased increased product productivit ivity y
12.9.2 Dysfunctions of Conflict
1. Can lead lead to to physic physical al harm harm or even kil killin lings gs 2.
Can lead lead to to destru destructi ction on of proper property ty
3.
In a work work environm environment ent conflict conflict can make make people people too upset upset to to work
4. Can lead lead to to break break down or distort distortion ion of communicati communication on 5.
Conflict can also lead to stress (both emotional or physical)
6. Can produce produce excessi excessive ve levels levels of tension tension anxiety anxiety and and stress stress 7. Can drive drive out people who cannot cannot tolerat toleratee high levels levels of of conflict conflict 8. Can reduce reduce trust, trust, leading leading to antagonisti antagonisticc interaction interactions. s. This can lead lead to withholdi withholding ng /distorting of information by one party. 9. Low conflict conflict fails fails to encourag encouragee new ideas or tolerate tolerate different different points points of view. view. This This leads
to
poor
decisions
made
with
poor
information
12.10 Functional and Dysfunctional Consequences of Competition 12.10.1 Functional Consequences of Competition
Competition encourages creativity, lowering of prices, and quality production. Within groups groups,, it encoura encourages ges effect effective ivenes nesss and effici efficienc ency. y. Within Within larger larger social social syste systems, ms, it encourages creativity, innovation and effectiveness. Competition therefore: -
promot promotes es and encour encourages ages creati creativit vity y and and innov innovati ation on
-
clarif clarifies ies differ differenc ences es betwee between n peopl peoplee or or grou groups ps
-
motivates
-
incr increa ease sess grou group p sol solid idar arit ity y
-
after after the the win, win, may may resul resultt in grou group p frien friendsh dship ip and and cooper cooperati ation on
12.10.2
Dysfunctional Consequences of competition may lead to the:
-
deve develo lopm pment ent of a we ver versu suss the they y atti attitu tudes des
-
distor distorted ted percept perception ionss and and judgme judgment nt about about the other other grou groups ps
-
each each grou group p see seess the the other other as an enemy enemy
-
misi misinf nfor orma mati tion on about about the the oth other er grou group p
-
the the wini wining ng gro group up mig might ht bec becom omee comp compla lace cent nt
-
the loos loosing ing grou group p might might become become gloom gloomy y leadin leading g to loss loss of mora morale le and and drive drive
12.11 Functional and Dysfunctional Consequences of Cooperation 12.11.1 Functions of Cooperation
Shared benefits
Increased outcomes (synergy)
Peace and stability within or between group
12.11.2 Dysfunctional Consequences of Cooperation
Complacency
Lack of creativity and innovation
Failure to adopt change
12.12 Differences between Conflict and Competition 1. Incompatibility of goals
In conflict, there is incompatibility of goals between parties while in competition there compatibility of goals between parties 2. Opposing behavior In conflict, behavior is entirely (or mostly), opposing while in competition, there is some opposing behaviors and some cooperative behavior 3. Rules
In conflict there are few or no rules of behavior while in competition rules exist
4. Willingness to enter
In confl conflic ictt one one or both both part partie iess may may be draw drawn n or forc forced ed into into the the confl conflic ictt while while in competition usually both parties enter willingly
12.13 If cooperation is so beneficial, why don’t people, groups or units cooperate? •
The main reason is that the goals sought by the groups or individuals cannot be shared for example if two people are seeking the same promotion, they cannot cooperate to attain it. In many cases therefore, competition or conflict is the result.
• The other reason is that many valued goals in organizations (e.g. status, power promotions etc,) are in short supply and are sought by many more persons or units than can hope to attain them: cooperation is scarce, whereas competition and conflict are the norm. •
The other reason is that in many instances the individuals or groups may find that they have an alternative to cooperation. They can either choose to cooperate to achieve mutually desired goals, or they can work on their own to achieve the desired goals.
•
Reciprocity: people treat others the way they are treated rather than treating
others the way they would have others o thers do to them. •
Communication: in many situations where cooperation could develop, but it
does not, its absence is blamed on failure to communicate. •
Group size: as the number of individuals rises, the level of cooperation drops.
Several factors contribute to this outcome.
The greater the number of persons, the greater the possibility that one will be totally selfish, exploitative or simply uncooperative.
As groups increase in size communication among their members, becomes more difficult.
As the number of individuals increases, diffusion of responsibility develops such as pass - the back
12.14 Comparison between Conflict and Cooperation 12.14.1 Differences.
a) Coopera Cooperati tion on has largely largely positi positive ve conseq consequenc uences es at least least for the parti parties es involved involved while conflict has both positive and negative consequences b) Cooperation Cooperation consists consists of mutually mutually reinforci reinforcing ng or supportive supportive behaviors behaviors between two or more more people, people, groups groups or larger larger syste systems ms while while confli conflict ct consist consistss of opposin opposing g behavior. c) Coopera Cooperati tive ve behavi behavior or stems from a percep perceptio tion n that that collab collabora oratio tion n will will help help obtain obtain mutual goals, while conflict sterns from a perception of conflicting goals. d) Cooperation Cooperation may stem stem from a predisp predispositi osition on to behave this this while conflict conflict is largel largely y caused by perceived or actual goal incompatibility. e) In cooperation, cooperation, since since each of the parties parties involved involved is obtaini obtaining ng something something desirable, desirable, or expects to, there is little reason for the behaviors or be sub rosa. Therefore cooperative behavior is open and disclosed to all parties who may wish to hear or know about the cooperation; conflict is usually sub-rosa.
12.14.2 Similarities
(i) (i)
Coop Cooper erat ativ ivee beha behavi vior or,, like like conf confli lict ct beha behavi vior or may may be verba verball or nonve nonverb rbal al or both.
(ii) (ii)
Both Both conf confli lict ct and and coope coopera rati tion on can can be funct functio iona nall or dys dysfu func ncti tiona onall
(iii) (iii)
In both both confli conflict ct and coope cooperat ration ion,, there there are at leas leastt three three partie partiess to the situ situati ation. on.
(iv) (iv)
In both both confl conflict ict and and cooper cooperati ation, on, behavi behaviors ors are are inter interact active ive in in the sens sensee that that it is is between at least two people and there is usually more than one cycle of behavior and counter behavior.
(v) (v)
Both Both conf confli lict ct and and coope coopera rati tion on can can be cons consid ider ered ed as par parts ts of of a conti continu nuum um
Low Conflict
High conflict
Low Cooperation
High Cooperation
High conflict
Low conflict
Low cooperation
High cooperation
12.15 Conflict Management Model 12.15.1 The management of conflict requires that when conflict is dysfunction ally high,
the manager tries to reduce it and if the conflict is dysfunction ally low, he tries to increase it. In the same way a thermostat maintains a desired room temperature, conflict management maintains a desired conflict level. Signs of a dysfunction ally high conflict are: •
Low trust in a work unit
•
Deliberate distortion of information
•
High levels of tension during interpersonal interactions
•
Antagonism between parties
•
Sabotage
•
Violence between the parties
Symptoms of dysfunction ally low conflict are: •
Suppression — includes denial of differences, a desire to perceive similarities betwe between en parti parties es that that do not exist, exist, repres repressin sing g contro controver versia siall inform informati ation, on, and prohibiting disagreements about legitimate issues.
•
Withdrawal Withdrawal — reduced reduced communicati communication on avoidance avoidance of interaction interactions, s, the belief belief in” peace at any price” and walking away from a disagreeable interaction.
12.15.2 Reducing Conflict
When When conf confli lict ct incr increa ease sess to dysf dysfun unct ctio ion n ally ally high high leve levels ls,, mana manage gers rs must must devel develop op techniques for reducing it to acceptable levels. There are three approaches to reducing conflict in organizations. These are: win-lose, lose-lose, and win-win Lose-lose methods
(i)
-
None None of the the partie partiess to the the confli conflict ct episo episode de get get what what they they want. want.
-
Typi Typica call los losee - lose lose meth method odss are are
Avoidance- partie partiess to the conflic conflictt avoid avoid confro confronta ntati tion. on. However However althou although gh
manifest conflict may be reduced through avoidance, av oidance, latent conflict can arise. (ii)
Compromise -in -in comp compro romi mise se part partie iess in conf confli lict ct use use barg bargai aini ning ng and and
negotiation to reduce conflict. Each party to the conflict gives up values. In compro compromis misee however however,, manif manifest est conflic conflictt may reduce reduce,, but latent latent conflic conflictt persists. (iii) Smoothing: in smooth smoothing ing partie partiess to the confli conflict ct emphas emphasis is simila similari ritie tiess not differences. Thus , because differences are no t discussed, latent conflict exists. Win -lose methods
In win-lose method, one party to the conflict becomes a clear winner, and the other party a clear loser. Consequently win-lose methods clearly leave latent conflict. Nevertheless, they reduce conflict. Main methods of win- lose are: dominance; authoritative command; and majority rule. (i)
Dominance: dominance happens when one party to a conflict overwhelms the
other either because the overwhelming party has a higher authority status, or is physically over powering. It can also happen when one party to the conflict has a low tolerance for conflict. Although dominance reduces conflict, if leaves latent conflict. (ii) Authoritative command: this occurs when the parties in conflict refer their conflict to a common superior who decides the solution to the conflict manifest conflict stops, but conflict episode ends with a conflict after ***
(iii)
Majority rule: in this method, the issue in conflict is put to a vote. Some
members (majority) win, and the minority loses. If this is acceptable to all concerned, this method can reduce conflict.
The win - win methods of conflict reduction
In these methods, each party to the conflict episode gets what he/she wants. These methods include: problem solving, integration, and establishing super ordinate goals. (i) Problem solving: this method tries to find the basis of conflict and ensures that all differences among the parties are fully exposed. The parties regard differences as important sources of information which lead to creative solutions to the conflict. Properly done, problem solving is an effective way of reducing conflict. (ii) Integration: this method seeks solutions that are in the best interests of all parties. It assumes that peoples’ deeply held interests and desires are the bases of conflict. Thus, the method tries to find a solution that meets the goals of every party in the conflict. (iii)
Super ordinate goal: a super ordinate goal is a goal desired by all parties in the
conflic conflictt but is unattai unattainabl nablee by any party party alone. alone. Super Super ordina ordinate te goals goals compel compel cooperation even if the parties otherwise do not wish to cooperate.
12.15.3 Increasing Conflict
Conflict management includes increasing conflict when the conflict becomes dysfunction ally low. The goal of increasing conflict is to get the functional qualities of conflict so as to increase efficiency and effectiveness increasing information and proposing creative solutions to problems. Managers must ensure that conflict in increased to levels that are not dysfunction ally high. The following are the major methods of increasing conflict: (a) Deliberately forming forming heterogeneous groups to find solutions to problems (b) By developing developing an organizatio organizational nal culture that supports supports openness about debate debate and opinions.
