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Technostructur

al Interventions
Chapter 14:
Restructuring Organizations
Chapter 15: Employee
Involvement
Chapter 16: Work design

PSYC 6220-Organizational Change & Development

Technostructural
Interventions
Change programs
focusing on the
technology and
structure of
organizations
(Cummings & Worley, 2009)

Restructuring organizations
Organization structure
describes how overall work
of the organization is
divided into subunits and
how these subunits are
coordinated for task
Designed to fit at least 4 factors :
completion.
environment, organization size,
technology & organization
strategy

1)

Common
Organizational
Structure
Functional structure

Advantag
es
Promotes skill
specialization

Facilitate
communication

Reduce duplication
of work

Disadvanta
ges
Reduces
communication &
cooperation
between
departments

2) Unit Structure / Divisional


Structure

Advantages

Provide employees with


opportunities for
learning new skills &
expanding knowledge

Recognize key
interdependencies &
coordinate resources
toward an overall
outcome

Disadvantag
es
May not have enough
specialized work to use
peoples skill and
abilities fully

Specialist may feel


isolated from their
professionals
colleagues & may
fail to advance their
career specialty

3) Matrix Structure

Allows multiple
orientation

Maintains consistency
between different
departments & projects
Provide mechanisms to
deal with multiple
sources of power in the
org

Disadvantag
es
Can cause role confict for
the individual who can be
caught between the
demands of two managers

Advantage
s

Very difficult to introduce

Heavy managerial costs &


support

4) Process
Structure

Senior Management Team


Chair and Key Support Process Owners

Developing New Products


Process
Process Owner Cross-Functional Team
Members

Acquiring and Filling Customer


Orders Process
Process Owner

Cross-Functional Team
Members

Supporting Customer Usage


Processes
Process Owner

Cross-Functional Team
Members

Advantag
es
The work fow & each
departments
connections to the
customer are much
clearer to all
organizational
members

Disadvantag
es
Less useful in
organizations that have
automated or
outsourced many
processes & thus do
not have job assigned
to them as the
structure intends

5) Network Structure
Producer
organizati
on

Designer
organizati
on

Broker
organizati
on

Supplier
organizatio
n

Distributor
organizati
on

Advantages

Cost effective
& fexible

Focus the
organization
on its central
purpose

Disadvantag
es
Can cause
problems
when the
organization
must rely on
the
performance
of an external
company over
which it may
have little
control

Downsizing
Refers to interventions
aimed at reducing the size
of the organization,
accomplished by decreasing
the number of employees
through layoffs, attrition,
redeployment or early
retirement or by reducing
number of organizational
units or managerial levels
through divestiture,
outscoring, reorganization
or delayering

Application
Stages
Clarify the organizations
strategy

Assess downsizing options &


make relevant choices

Implement the changes


Address the needs of survivors
and those who leave

Follow through with


growth plans

Tactic

Downsizing
tactics

Characteristic
Examples
(Cameron
et al.,1993)
s

Workforce
reduction

Reduces headcount
Short-term focus
Fosters transition

Attrition
Retirement/buyo
ut
Lay-offs

Organizati
on
redesign

Changes
organization
Medium-term focus
Fosters transition
and
transformation

Eliminate
functions, layers,
products
Merge units
Redesign tasks

Changes culture
Long-term focus
Fosters
transformation

Change
responsibilities
Foster
continuous

Systemic

Reengineerin
gThe fundamental
rethinking & radical
redesign of
business processes
to achieve dramatic
improvements in
performance

(Cummings & Worley, 2009)

Characteristics of
Reengineering in
Organisations
Work units change
from functional
departments to
process teams
Jobs change from simple tasks to
multidimensional work
Peoples roles change from
controlled to
empowered
The focus of performance measures
and
compensation shifts from activities
to results
Organisation structures change
from hierarchical to flat

Re-engineering

Prepare the organization


Process
Specify the organisations
strategy and
objectives
Fundamentally rethink the way
work
gets done
Identify and analyze core
business
processes
Define performance objectives
Design new processes
Restructure the organization

Employee
Involvement
Seeks to increase
members input
decisions that affect
organization
performance and
employee wellbeing (Cummings & Worley,

Lead 2009)
to quicker, more responsive
decisions, continuous performance
improvements & greater employee
fexibility, commitment and satisfaction.

4 key elements
(Cummings & Worley, 2009)

EI Applications:
Parallel Structures
(Cummings & Worley, 2009)

Provide members with an alternative


setting in which to address problems &
to propose innovative solutions free from
the existing, formal organization
structure & culture
2 most common parallel structure:
1) Cooperative union-management
projects
2) Quality circles

EI Applications: Parallel
Structures

1
2
3
4
5,

EI Applications: Total
Quality Management
(TQM)
Quality is achieved when
organizational processes reliably
produce products and services that
meet or exceed customer
expectations
(Cummings & Worley, 2009)

Emphasize the concept of


quality

Total Quality
Management (TQM)
Is a combination of a number of
organization improvement techniques
and approaches including the use of
quality circles, statistical quality
control, statistical process control,
self-managed teams and task forces &
extensive use of employee
participation.
(French & Bell,
1999)

EI Application: Total
Quality Management
(TQM)

EI Application: HighInvolvement organizations


(HIOs)
Create organizational conditions
that support high levels of
employee participation

Address almost all organizational


features (org. structure, job
design, information system, career
system, selection, training, reward
system, personnel policies,
physical layout)
(Cummings & Worley, 2009)

Work Design

Work design creating jobs & work


groups that generate high levels of
employee fulfillment and productivity

The Complete Job


Characteristic Model

Hackman & Oldham have


provided an OD approach to
work redesign based on a
theoretical model of what job
characteristics lead to the
psychological states that
produce high internal work
motivation
(French & Bell, 1999)

STRATEGIC
CHANGE
INTERVENTIONS
PSYC 6220-Organizational Change & Development

Understanding
Introduction
UNDERSTANDING
the
Balanced
STRATEGIC
Scorecard
INTERVENTIONS
Without a strategy, an organisation is like a ship
without a rudder, going round in circles. Its like a
tramp; it has no places to go. (Ross and Kami)

What is Strategic
Interventions ?

What is Strategic
Interventions ?
Strategic interventions contribute to align
the organization with its environment
and that which links the internal
functioning of the organization to the
larger environment; transforming the
organization to keep pace with changing
conditions.

Cummings andWorley(2009)

What is Strategic
Interventions ?
Strategic intervention help
organizations to gain a better
understanding of their current state,
and their environment, that allow
them to better target strategies for
competing or collaborating with
other organizations
Cummings andWorley(2009)

Transformational Change

1
Continuous Change

2
Transorganisational Change

Understanding
Part 1
Transformational
the Balanced
Change
Scorecard

Without a strategy, an organisation is like a ship


without a rudder, going round in circles. Its like a
tramp; it has no places to go. (Ross and Kami)

What is Transformational
Change?
Organisation transformation implies radical changes
from its members behavior, internal functions,
corporate structures, company values and norms,
and the organisational arrangement.
-Cummings and Worley (2009)
Organisational transformation involves creation
of a new organizational vision
(Porras and Silvers as cited in Smither,
Houston, & McIntire, 1996)
A change in which the organisation moves to a
radically different, and sometimes unknown,
future state.
(Nelson & Quick, 2011)

Triggered by
Environmenta
l and Internal
Disruption

Characteris
tics
of
transformati
onal

Change Is Aimed at
Competitive
Advantage
Uniqueness unique
bundle of resources which
represent completive
advantage
Value higher-thanaverage Is
price or
Change
exceptionally low in cost
Systematic
Imitation difficulty

Must experience a severe


threat to survival
Some choose to change even
Involves
though
not subjected to external
Significant
pressures
Learning
due to seeing business
opportunities
Transformational
(Dunphy, Griffiths & Benn,
change requires
2007).

Change
Demands a
New
Organizing
Paradigm

chan
ge

and
Revolutiona
ry Involves

learning and
innovation.
reshaping
Members must
organisations
learn to enact new
design elements
behaviors to
Triggered
by
Senior
Involving gamma types
and its entire
implement new
of change (Bartunek & Executives andnature
Line
strategic directions
Louis, as cited in
Cummings and Worley, Management
2009) - discontinuous play key role in actively leading
transformation in deciding the when, how,
shifts in mental or

Understanding
the Balanced
Scorecard
Integrated Strategic
Change

Points on Integrated
Strategic
Change

1
2
3

Integrated Strategic Change


Key Features (Cummings & Worley, 2009)

Stages of ISC

ISC Stages
STRATEGIC PLANNING

Readiness for
change
Senior
managements
willingness to carry
out change
Understanding
current
organisation
design
Explain current
performance levels

Once existing
orientation
understood, new
one must be
designed
what of strategic
change, define
products/service
Markets to be
served, way
outputs will be
produced

How
Change plan:
Types, magnitude,
schedule of
change activities
Associated costs
Organisation
Culture
Power and political
issues

STRATEGY
IMPLEMENTA
TION

Alignment issues
Teamwork
Organisational/per
sonal learning
senior managersinitiate actions,
allocate resources,
set goals, give
feedback

Why is Integrated Strategic


Change Valuable ?

Understanding
the Balanced
Scorecard
Organisation Design

Organisation Design

Organisation Design
Organisation Design Model
Model
Organization
Strategy
Strategic
Fit

Organisation
Design
Management
and Information
Systems

Human
Resource
Practices

Design
Fit

Structur
e

Work
Design

Organisation Design Types

(Burns&
Stalker, 2009; Cummings & Worley, 2009)

Mechanistic
Design

Strategy

Structur
e

Cost minimization
minimization
Cost

Formal/hierarchical
Formal/hierarchical
Works best
best in
in stable
stable
Works
environment
environment

Work
Design

Traditional jobs
jobs
Traditional
Traditional work
work group
group
Traditional

Human
Resource
Practices

Selection to
to fit
fit job
job
Selection
Training only
only when
when needs
needs
Training
arise
arise
Job-based pay
pay
Job-based

Management
and Information
System

Command and
and control
control
Command
Centralized decisiondecision Centralized
making
making
Closed, exclusive

Organic Design
Innovation competing
competing
Innovation
on new
new products
products
on

Flat, lean,
lean, and
and fexible
fexible
Flat,
Works best
best in
in dynamic
dynamic
Works
and uncertain
uncertain
and
environment
environment
Enriched jobs
jobs
Enriched
Self-managed jobs
jobs
Self-managed

Selection to
to fit
fit organisation
organisation
Selection
Training is
is continuous
continuous
Training
Skill-based pay
pay
Skill-based

Employee involvement
involvement
Employee
Decentralized decisiondecision Decentralized
making
making
Open, inclusive

Organisation Design
Stages
Organisation design follows
three broad steps (Galbraith et al., as cited
in Cummings and Worley, 2009):

STRATEGIC PLANNING

Organisation
assessment for
framework
Gap analysis
problems to address

STRATEGY
IMPLEMENTATI
ON

Configure design
Putting into place
(practices,
How
structures, systems)
Upper leadership for
overall direction
Members must be
motivated to
Results in design,
component design,
implement
and how to
Stakeholders must
implement
support

Understanding
the Balanced
Scorecard
Culture Change

What is Corporate Culture ?

Elements of Corporate
Culture
(Cummings & Worley, 2009)

Organisation Culture and


Organisation Effectiveness

Guidelines for Cultural


Change
(Cummings and Worley 2009; Senior, 2002)

1
2
3
4
5

Evaluating Culture Change

Understanding
Part 2
Continuous
Change
the Balanced
Scorecard

Without a strategy, an organisation is like a ship


without a rudder, going round in circles. Its like a
tramp; it has no places to go. (Ross and Kami)

What is Continuous
Change?

Continuous change interventions extends


transformational change into a nonstop process of
strategy setting, organisation designing, and
implementing the change
(Lawrence, Dyck, Maitlis, & Mauws, as cited in Cummings and Worley,
2009)
Focus is on learning, changing, and adapting

and on how to produce constant fow of new


strategies and designs and not only
transforming existing ones
(Cummings and Worley, 2009)

Continuous learning at individual level : changing


behavior of ones skills, knowledge, and worldview
At organisational level: deepening and broadening
of organisational capabilities
(Sessa & London, 2006)

Understanding
the Balanced
Scorecard
Self-Designing
Organisations

Self-Designing
Organisations

Application Stages
The self-design approach is described in three stages (Cummings and
Worley, 2009):

STRATEGIC PLANNING

Acquiring
knowledge about
how the
organisations
function
Valuing corporate
values that guide
change process
Diagnosing to
determine what
needs to be
changed

STRATEGY
IMPLEMENTATI
ON

What needs to be
Involves ongoing
refined and modified
cycle of action
for the change
learning: changing
structures and
behaviors,
assessing progress
and making
necessary
modifications

The Self Design Strategy enables


organisations to adapt to demands of
change from five important
perspectives: (Cummings and Worley, 2009)

Understanding
the Balanced
Scorecard
Learning
Organisations

Learning Organisations

OL Processes
Organisations may apply learning process to
three types of learning:

1
2
3

3 Types of Learning

How OL Affects
Organisation Performance
Organisationa
l Learning

Organisation
Characteristic
s
Structure
Information
system
Human
Resources
practice
Culture
leadership

Competitiv
Knowledge
e Strategy
Managemen
t
Organisation
Learning
Organisati
Processes:
on
Organisatio
Discovery
Knowledg
n
Invention
e:
Performanc
Production
explicit
e

tacit
Generalizatio
n

What are Knowledge


Management Interventions ?

Application Stages for


KM

Understanding
the Balanced
Scorecard
Built-To-Change
Organisations

Built-To-Change (B2C)
In a rapidly
Organisations
B2C organisations are
designed for change,
not stability. They are
based on design
guidelines that
promote change
capability
in the management,
reward systems,
structure information,
decision processes,
and leadership
(Cummings and Worley,
2009)

changing
environment,
this change
capability can
be a source of
sustained
competitive
advantage
(Cummings and
Worley, 2009).

Design Guidelines for


B2C
Managing Talent Reward System

Selection
practices

Seek quick
learners
wanting to
take
initiative,
desire
professional

Enhance
employee
motivation
level

Key role :
motivating
and
reinforcing
change

Structure
&
Leadership
Internal
Structure and
Leadership
importance

Flat, lean,
flexible
organisation
structures
Shared &
spread
leadership

Information and
Decision
Process
Dynamic flow
of information
& transparency

Moved
throughout
the
organisation,
information
is
transparent

B2C Stages
Lawler and Worley (2006)
The following 5 initiatives can help the transition to a
B2C organisation :

Addresses
organisation
identity
core values,
norms,
beliefs

i.
Intervention
looks outward to
gain insight of
environmental
demands
ii.
Seniors
executives commit
time to think about
future paths
scenario-planning iii.

Skills for
change
developed
among
employees
Organisation
effectiveness
function
created
Members learn
how to apply
change

Employee
empowerment
practices

Periods in
the life of an
organization
Involves
bringing all
prior
processes
together

The Built to Change Logic


Lawler and Worley (2006)

Change
is
Inevitab
le and
Normal

Traditional
Design Is a
Problem
Human Nature is
Not
The Problem

Competitive
Advantage is
Change

Understanding
Part 3
Transorganizational
the Balanced
Change
Scorecard

Without a strategy, an organisation is like a ship


without a rudder, going round in circles. Its like a
tramp; it has no places to go. (Ross and Kami)

Transorganizational
Transorganizati
onal strategies
Change

Cummings and Worley


(2009) states that
transorganzational
change involves
interventions that
move beyond the
single organization to
include merging,
allying or networking
with other
organisations.

allows
organisation to
perform tasks
that are too
costly and
complicated for
single
organisations to
perform.
(Cummings and
Worley, 2009)

Mergers and Acquisition

Why M&As are Done?


(Cummings and Worley, 2009; Galpin & Herndon, 2009)

Improve
innovation

To gain access to
global markets,
technology, etc

3
4
5

To achieve
operational
efficiencies

To grow
revenue

Resource sharing

Why Do M&As Fail ?

A set of factors has been found to be to be consistently


associated with poor M&A efforts according to Galpin and
Herndon (2007):
Differences
Lack of
People-Related
Cultural
in
Communicatio
Issues
Incompatibility
Management
n, Leadership
Styles
and Decisionmaking

M&As Application Stages


(Cummings and Worley, 2009)
1. Pre-combination Phase

2. Legal combination

3. Operational combination

Recommendations for M&A


Success
For M&A efforts to succeed,
Galpin and Herndon (2007) have
suggested the following:

Understanding
the Balanced
Scorecard
Strategic Alliance
Interventions

Strategic Alliance Roll (2009)


describes it as an
Defined Long-term
approach in which
agreements between
firms that go beyond
normal market
transactions but fall
short of merger.
Forms include joint
ventures, licenses,
long-term supply
agreements, and
other kinds of interfirm relationships
(Porter, 1990).

two or more
companies agree
to pool their
resources together
to form a
combined force in
the marketplace
different from
mergers, in which
does not involve
the emergence of a
new combined
entity.

Child, Faulkner, and Tallman defines strategic alliance as a formal


agreement between two or more organisations to pursue a set of
private and common goals through the sharing of resources
(as cited in Cummings and Worley, 2009, p. 568).

Alliance Application Stages


(Cummings and Worley, 2009)
Involves four major stages:

Clarify
business
strategy
Understand
why alliance is
appropriate

Search for
appropriate
partner
Compatible
management
styles, cultures,
etc.

Structuring
partnership
Relational
quality Trust
Issues

Diagnosing
strategic
alliance state
Making
appropriate
adjustments.

The Need for Strategic


Alliances

Benefits of the Strategic


Alliances
(Soares as cited in IsoraIte, 2009)

1
2
3
4

Understanding
the Balanced
Scorecard
Network Interventions

Network interventions help


organisations join together for a
common purpose
(Cummings and Worley, 2009).

Two types of change are involved in


managing the development of
multiorganisation networks:

Creating the initial network


Managing change within that network

Creating the Network


(Cummings and Worley, 2009)

Involves four major stages:

Identifying
members
(existing/potent
ial).

Face-to-face
meeting
Costs and
benefits
Task
perceptions

Task
performance
organization

Assessing how
network is
performing
Feedback

Managing Network Change

Actualizing The Network


Within
Organization can realize its network and collaborative
potential by pursuing the following path: (Camson, 2010)

1
2
3
4

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