Chapter 1: Organizations and Environments

1.1 Organizations

According to Tony Watson (2002) a common factor of organizations is the idea that organizational have goals which act as a glue holding together the various systems used to produce things. In this sense, organizations can be seen as people interacting to achieve some defined purpose. A typical working definition of an organization might say it is a social entity that has a purpose, has a boundary and patterns the activities of participants into a recognizable structure (Daft, 1989). An organization can be seen as a systems of interacting subsystems and components set within wider systems and environment that provide inputs to the systems and receive its outputs: informal and formal (Figure 1.1).

• Informal: Culture, politics and leadership

• Formal: Management, strategy and structure, operations, technology, goals

According to Stacey (2003) this is called the shadow system in which the informal subsystems encapsulated the more hidden elements.

Nadler (1988) included the informal organization in his system of organizational behaviour. This informal organization exists of patterns of communications, power and influence, values and norms.

Story, Edwards and Sisson (1997) note that to achieve long-tem organizational success it is the unique use of human resources is critical since technology and finance are innovations that can be copied rapidly

According to Silverman (1970) the ‘social action approach’ is known as a contrasting view of organizations being composed of individuals and groups with multiple different interests.

1.2 A piece of history

The Industrial Revolution and the industrial age was characterized by a series of inventions and innovations that reduced the number of people needed to work and provided the means of mass productions. Since demand and supply were predictable, companies were able to structure their organizations. According to Burns and Stalker (1966) described as the mechanistic lines – a systems of structure hierarchical structures and lines of control.

Organizations focused on efficiency and effectiveness during the Industrial age and produced as many products (task-oriented/fordism). At the same time, organization faced increasing international competition and shift from manufacturing to services. In the nep-industrial age the emphasis has moved towards adding value to goods and services, what Goodman (1995) called the value-oriented time (figure 1.2). Adding value means identifying potential customer expectations and them exceeding them. Since economies of the West could no longer rely on mass productions, the knowledge has become increasingly important and through intelligence and creative thinking organizations will improve competitiveness.

1.3 An uncertain future

Most commentators on organizations agree that business is becoming ever more uncertain as the pace of change quickens and the future become more unpredictable (Furnham, 2000).

Drucker (1988) maintained that future organizations would be almost wholly information-based and that they would resemble more a symphony orchestra than the command and control, managed structures prevalent in the past.

Dawson (2003) state that managers should be leaders of change. If they are not, the organiation will cease to exist is an increasingly competitive environment.

1.4 PESTLE factors for change

It seems that a change in organizations is triggered by large and momentous events and by events. Senior & Swailes state that organizational change is besides internal systems (input, conversion, output) and history, influenced by the external environment. Brooks (2004) explains the environments as a general concepts which embraces he totality of external environmental forces which may influence any aspects of organizational activity. A common way of grouping different environmental factors uses the PEST mnemonic (figure 1.3).

• Political

• Economic

• Socio-cultural

• Technological

A political trigger may influence economic factors like government legislation, international law, wars, local regulations and taxation

Economic triggers are factors as competitors, suppliers, employment rates, wage rates, government economic policies. Economic and political environments are closely related since political decisions shape economic fortunes and economic changes influence political decisions. Governments in developed countries work to keep four key economic indicators in balance (Cook, 2004):

• Increasing output of goods and services

• healty balance of payments

• low inflations

• low unemployment

Furthermore the socio-cultural triggers are often changes within existing norms, values and culture. Moreover factors include demographic trends, lifestyle changes, skills availability, gender issues and business ethics.

Examples of technological triggers include information technology, new production processes and changes in transport technology

Legal and ecological factors can be considered as well (PESTLE).

1.5 Environmental turbulence

Organizations operates in at least 3 types of environment (figure 1.4):

1. Temporal environment

2. PEST environment

3. Internal environment

Temporal environment, consists of the historical developments bringing change over time. All together make up the total ‘operating environment’.

The dynamics of an organization’s environment have also been described in terms of the degree of environmental turbulence. Ansoff & McDonnel (1990) state that a firm’s performance is optimized when its aggressiveness and responsiveness match its environment. They propose five levels of environmental turbulence:

1. Predictable.

2. Forecast able by extrapolation.

3. Predictable threats and opportunities.

4. Partially predictable opportunities.

5. Unpredictable surprises.

Note: from level 3 on: time to responds get less.

These five levels can be compared to three different kinds of change situation proposed by Stacey (1996) namely closed change, contained change and open-ended change. Stacey’s named two related concepts ‘close to certainty’ and ‘far from certainty

1.6 Conclusions

Since organization operate in multiple environments, the key task is to work and try to manage the external adaptations and internal integration. They need to be quick on their feet to anticipate to opportunities and threats and the unpredictable surprises.

Chapter 2: Organizational Change

Within this chapter different models of organizational change will be discusses. The explanation of some terms within this chapters are summarized below:

1. Convergent: fine-tuning of an existing configuration. The organizational configuration or template is not itself changed.

2. Radical: also known as frame-bending breaking away from a position such that a very different position is reached.

3. Planned: discrete beginning and end points. Change is seen as something that managers can control.

4. Evolutionary: also known as continuous change, slow adaptation of existing systems or structures.

5. Revolutionary: Fast paced, which affect all or most of an organization at the same time.

6. Emergent: change is seen as something that managers create the right climate for. Organization is seen as an evolving system then change arises out of experimentation and adaptation.

2.1 Different types

A starting point for considering the nature of organizational change is Grundy’s three varieties of change (figure 2.1):

1. Smooth incremental change: The change evolves slowly in a systematic and predictable way.

2. Bumby incremental change: The change is characterized by periods of relative tranquillity punctuated by acceleration in the pace of change.

3. Discontinuous change: The change is marked by rapid shifts in strategy, structure or culture, or in all three.

Balogun & Hope go further by suggesting four types of change (figure 2.2)

• Evolution

• Adaptation

• Revolution

• Reconstruction

The two dimensions are scope (incremental or big-bang) and the scale (realignments or transformation).

Tushman et all. proposed a model of organizational life that consists of ‘periods of incremental change, or convergence, punctuated by discontinuous changes. They mention 2 types of change: fine-tuning and incremental adaptations. A major change in the organization is a frame breaking change (revolutionary, reorganization, new executives, altered power and status, reformed mission and core values).

Organizational change can be mapped in terms of its pace (continuous or episodic) and its scope (convergent or radical) according to Plowman et al. (figure 2.3). Each type differs on the following dimensions:

• The driver (namely instability or inertia)

• The form (namely adaptations or replacement)

• The nature of change (namely emergent or intended)

• The types of feedback (negative feedback discourages)

• The connections in the system (loose or tight)

The four quadrants portray four types of change:

1. Continuous and convergent change: Change is slow and channelled into improving systems and practices. Change happens within organizational template, the template itself is not altered.

2. Episodic and convergent: Change occurs more quickly and perhaps as a result of a specific shock or crisis. Negative feedback pushes minor changes and keeps the template in shape.

3. Episodic and radical: Change happens quickly in response to a major shock or crisis. The template is altered through, for instance, a new top management team or new strategy.

4. Continuous and radical: Change arises out of an accumulation of small changes that gather momentum and lead to a new template being formed. If successful the new template becomes established and is reinforced by new rules, values and norms.

Dunphy and Stacey’s scale is similar to Grundy’s concepts of change. The benefit of this model is the detailed description of each scale. The four scales are:

1. Fine tuning: Change is an ongoing process for example; refining policies, creating specialists units, developing personnel better suites to the present strategy and clarify established roles.

2. Incremental adjustment: Change involves distinct modifications (but not radical change) for example: expanding sales territory, improves production process technology, adjustment to organizational structures.

3. Modular transformation: Change is characterized by a major realignment of one or more departments/divisions for example: major restructuring of particular departments, changes in key executives and managerial appointments, reformed divisional goals.

4. Corporate transformation: Change is characterized by radical shifts in business strategy and revolutionary changes throughout the whole organization for example: reformed mission and core values.

Tushman et al. is splitting frame-breaking change into 2 types: Modular transformation and corporate transformation. Tushman observe that if organizations are successful and the environment is stable frame-breaking change is quite dysfunctional.

Different discussions include the idea of organizations striving to maintain a state of equilibrium where the forces for change are balanced by the forces for stability. The organizational system is therefore always changing and making adjustments to maintain its optimum state.

Beck et al. (2008) conceptualize change as ‘discrete modification of structural organizational elements’, change today leads to change tomorrow. They identify 3 commonly analyzed change events:

1. Change of markets.

2. Change of organizational leadership.

3. Changes to rules and routines that comprise the basic structure of organization.

The distinction between emergent and planned change is not clear cut. Wilson criticizes the idea that change can be planned logically and systematically. According to Jian (2007) unintended consequences are those things that would not have happened if an actor had acted differently and are not what the actor had intended.

Quinn (1980) has also criticized the idea of planned change and Stacey (2003) summarizes the key points made by Quinn as follows:

1. Effective managers do not manage strategically in a piecemeal manner. The destination is thus intended.

2. The route to that destination (strategy itself) is not intended from the start in any comprehensive way.

3. Strategy emerges from interaction between different groups within the organization and are orchestrated by senior managers

4. Strategy emerges or evolves in small incremental opportunistic steps.

5. The result is an organization that is feeling its way towards a known goal, opportunistically learning as it goes. Quinn terms this process ‘logical incrementalism’.

2.2 Predictable change

The organizational life cycle is used to describe the stages an organization go through a they grow and develop (figure 2.4). The table below summarizes the different aspects of structure, systems, styles, strengths, crisis points and weaknesses per phase.

A brief description of a typical life cycle pattern is a useful categorization of the characteristics and crisis point with each phase of growth (Clarke, 1994):

1. Entrepreneurial stage (survival is key strategy).

2. Collective stage (organization begins to take ‘shape’).

3. Formalization stage (systems of communication and control become more formal).

4. Elaboration stage (strategic change).

2.3 Complexity

Complexity theory is a set of ideas stemming from the study of natural systems such as weather patterns and animal behaviour and which draws on mathematical principles to help explain how organizations behave (Burnes 2005).

Stacey et al. identified 3 cornerstones of complexity theory:

1. Chaos theory are characterized by constant transformation analogous to the ways that species evolve.

2. Dissipative structures need energy and impetus from outside otherwise they reduce to next to nothing.

3. Complex adaptive systems are made up of agents each of which conforms to is own principles that shape its behaviour in relation to other agents.

Burnes (2005) proposes 3 implications of applying complexity theory to organizations:

1. To give employees the scope to act, there must be more democracy and equalization off power.

2. Between the two extremes (incremental change and large-scale transformation) lies a continuous approach.

3. Self-organizational needs the presence of order-generating rules to fuel the continuous change ideal

Stacey (1995) argues that the only way to know every detail of a development is to let the development occur. If complexity theory is an accurate portrayal of organizational life and behaviour, then it is not possible to use theory testing, hypotheses- testing and to research thing that lead to success.

Houchin and Maclean (2005) suggest that complexity theory can be used to understand organizational change since it gives us insights into how patterns of order develop and how organizations learn and adapt. The shadow system is consisting of the old network that employees had before the new organization was formed still existed and meant that employees could, to a point, continue with their established working ways.

A tipping point (Boyatzis) is another complexity theory. Here, events occur and are contained within a system which lead up to and which culminate in a tipping point. The butterfly metaphor captures the idea that tiny variations in air pressure caused by the beat of a butterfly’s wings in one place can set in motion a chain of weather events that lead to a hurricane on the other side of the world.

2.4 Diagnose change

“Those who pretend that the same kind of change medicine can be applied no matter what the context are either naïve or charlatans.” (Strebel, 1996)

In contrast to Greiner (focus on structure and management), Strebel links his model to an organization’s competitive environment in which breakpoints are the times when organizations must change in response to changes in competitor behaviour. This model is called the evolutionary cycle of competitive behaviour (figure 2.5) and involves 2 main phases:

1. Innovation à divergence: variety creation/new business

2. Efficiencyà convergence: survive of fittest

Divergent breakpoint associated with sharply increasing variety in the competitive offering, resulting in more value for the customer. Convergent breakpoints associated with sharp improvements in the systems and processes used to deliver the offerings, resulting in lower delivered costs (figure 2.6)

Breakpoint are difficult to predict, but triggers can be recognized. Triggers originate from competitions, clients, suppliers, distributors etc.

Paton and McCalman use the terms hard and soft to describe two types of complexity problems and the Open University uses difficulties and messes. The difference between these two types are as follows:

- Difficulties: smaller scale, clear priorities and to what might need to be done, quantifiable objectives, known timescales.

- Messes: larger scale, interrelated complex of problems that cannot be separated from their context, subjective and semi-quantifiable objectives, fuzzy timescales.

To identify whether it is likely to involve hard or soft complexity and whether it can, therefore, be seen to be more of a difficulty or more of a mess, the following distinguish can be made by using TROPICS.

- Hard: Timescale clearly, Resources needed identified, Objective clear (smart goals), Perception and possible solution shared by all, Interest in problem limited, Control by managing group and Source originated within the organization.

- Soft: Timescale ill-defined, Resources needed uncertain, Change objective subjective, No consensus on what constitutes the problem, interest in the problem is ill-defines, control is shared with people outside managing group, Source of problem originated outside organization.

2.5 Changing nature of change

The differences in the table reflects changes in the way change is discussed in the management research literature (Oswik et al. 2005)

2.6 Conclusion

Organizational change can be categorized in three dimensions: pace, scope and planned-emergent. Different models and approached can be used. The models discussed in this chapter are compared in table 2.3. Cautionary note: Models are often showed 2 dimensional, assume orthogonality, have discontinuous scale and incidence of types. However, the reality is the opposite: multi- dimensional, interwoven, not so black-white with every quadrant filled.

Chapter 3: Structures of Organisations

3.1 Organizational structure

Structure describes the way an organization is configured into work groups and the reporting and authority relationships that connect individuals and groups together (Swailes). Organizational designs are ‘managerialist responses’ to the contingencies thrown up by the environment and the main framework for understanding organizational design is called contingency theory.

Empty restructuring is the phrase used by Paul Bate to describe what happens when manager change designs but disregard the social interaction that are overlaying them.

3.2 Dimensions

Organizational structures can differ in many ways. A classic study identified the following 6 primary dimensions of structure (Pugh, Hickson & Turner, 1969):

1. Specialization: the extend to which there are different specialist roles and how they are distributed.

2. Standardization: the extent to which an organization uses regularly occurring procedures that are supported by bureaucratic procedures or invariable rules and processes.

3. Formalization: the extend to which written rules, procedures, instructions and communications are set out for employees.

4. Centralization: the extend to which authority to make decisions lies with the apex (top) of the organization.

5. Configuration: the shape and pattern of authority relationships: how many layers there are and the number of people who typically report a supervisor.

6. Traditionalism: How commonly accepted is the notion of ‘the way things are done around this organization’.

Pugh established 4 underlying dimensions:

1. Structuring of activities: the extend there is formal regulation of employee behaviour through the process of specialization, standardization and formalization.

2. Concentration of authority: the extend to which decision making is centralized at the top of the organization.

3. line control of workflow: the extend to which control of the work is exercised directly by line management rather than through more impersonal procedures.

4. Support component: the relative size of the administrative and other non-work-flow personnel performing activities auxiliary to the main workflow.

John Child (1988) added three more dimensions:

• the way sections, departments and divisions are grouped together

• systems for communication, the integration of effort and participation

• systems for motivating employees such as performance appraisal and reward.

3.3 Models of structure

Max Weber is one of the founding fathers of the bureaucratic structure: the idea of rational legal authority, the idea of office and the idea of impersonal order. Several characteristics are: specialization and division of labour, hierarchical arrangement of positions, system of impersonal rules, impersonal relationships.

Jackson and Carter argue that structure is not something concrete and objective, but abstract. In their post-structuralism approach they maintain that there is no obvious and natural way of ordering the management activities.

In order to response better to markets and reduce operating costs by removing layers of management, some organization have tried to flatten their core design (figure 3.1 & 3.2) . Two flatter structures rules (Butler) are the more similar jobs at any one level, the more people a manager can coordinate and control and the more decision making is decentralized and therefore reducing the burden on each manager, the broader the span of control.

Rajan and Wulf (2006) found that the numbers of managers between the CEO and the lowest managers responsibility fell by over 25 % between 1986 and 1998. The possible explanations are increased competition, better corporate governance and information technology.

Mintzberg and Van der Heyden (1999) use organigraphs to show how organization really function. These organigraphs exists of two basic components:

1. Sets: machines or groups of people that rarely interact with each other

2. Chains: systems for converting input into outputs

In addition there are hubs (where people, things and information moves) and webs (show how points in an organization communicate with each other). In this way organigraphs show the multiple relationships between components of the organizations.

Multifunctional structures are a common structural form particularly in the stages of an organization’s development when the early entrepreneurial phase gives way to a more settled phase of sustained growth: phase 2 of the Greiner model. This phase will end in the crisis of autonomy. It will be more efficient to organize around products in stead of functions. This structures has both advantages, disadvantages and contingency factors mentioned below:

Advantages:

• Each function had its high level representative to guard its interests.

• Tight control possible at the top.

• Encourages development of specialist skills and expertise and provides a career structure within the function.

• Training can be organized along specialist lines.

Disadvantages:

• As organizations grow and diversify or locate in geographically distributed places, coordination of activities across functions can become more difficult.

• It sometimes encourages narrow thinking which works against innovation.

• Important market intelligence can be overlooked.

• Functional structures limit the opportunity for the development of general managers.

Contingency factors:

• stable and certain environment

• small to medium size

• routine technology, interdependence with functions

• goals of efficiency and technical quality

Multidivisional structures are built around outputs rather than inputs. They allow faster responses to market conditions. This structures has both advantages and disadvantages mentioned below:

Advantages:

• Maximizing the use of employees’ skills and specialized market knowledge.

• Opportunity for innovative ideas.

• Product differentiation facilitates the use of specialized capital.

• Offers good opportunities for the training of general managers.

Disadvantages:

• Overlap of functions from one product division to another.

• Overall administrative costs tend to be higher than in pure functional structures.

• Top management have more difficulty in controlling what happens at the product divisional level.

A matrix organization has a typical vertical hierarchy that is overlayed with a horizontal structure. Organization which adopt a matrix structure usually go through four stages (Barton and Martin, 1994):

1. Traditional structure- usually functional structure

2. Temporary overlay

3. Permanent overlay

4. Mature matrix

Cummings and Worley (2005) suggest that matrix structures are appropriate under 3 important conditions:

1. Pressure from the external environment for a dual focus (as lectures focus on teaching and research income).

2. A matrix structure is of benefit when an organization must process a large amount of information and operates in a unpredictable environment.

3. There must be pressures for sharing resources which matrixes support.

Matrix structures are strongly dependent on teamwork. Team members are managed by two different managers: functional line manager and team/project leader. Moreover, different advantages, disadvantages and contingencies can be mentioned:

Advantages:

• Decisions can be decentralized to the functional and divisional managers to speed up decision making.

• Increased flexibility in being able to form and re-form cross-functional teams.

• Staff form different functional areas have the opportunity to work with staff from other areas.

• Allow a flexible use of human resources and the efficient use of support systems

Disadvantages:

• Complex and can be administratively expensive.

• Confusion over who is ultimately responsible for staff and project outcomes.

• Increase potential for conflict, particularly between the functional and project managers.

Contingencies:

• Dual focus on unique product demands and technical specialization.

• Pressure for high information-processing capacity

• Pressure for shared resources.

• Divided loyalties between two or more managers.

Wilson and Rosenfeld (1991) consider that it is usually not worth moving to a matrix structure unless the tasks to be performed are complex, unpredictable and highly interdependent.

Project organizations are much more like a network of interaction than a bureaucratic structure, teams are powerful, exciting and dynamic entities (Morgan). A project organization overlaps Mintzberg Adhocracy. Adhocracy is an ad hoc group who a brought together for a single purpose associated with a particular project. The differences are that a project organization usually employs own staff. Te adhocracy may also do this but may additionally have staff who work on a contract basis.

The loosely coupled organic network might be said to be the end furthest from the rigid bureaucracy. It operated in a subcontracting mode and can be a permanent structure.

According to Snow et al. the internal network ‘typically arises to capture entrepreneurial and market benefits without having the company engage in much outsourcing. Different advantages, disadvantages and contingencies can be mentioned:

Advantages:

• Enable a highly flexible and adaptive response to dynamic environments.

• Due the fast pace and flexible nature each organization can leverage a distinctive competency.

• It allows rapid global expansion if needed.

• They can produce synergistic results.

Disadvantages:

• Managing lateral relations across autonomous organizations is difficult.

• Motivating member to relinquish autonomy to join the network is difficult.

• Opportunity to give partners access to knowledge and technology that one may not wish to part with.

Contingencies:

• highly complex and uncertain environments.

• Organizations of all sizes.

• Goals and organizational specialization and innovation.

• Highly uncertain technologies.

• Worldwide operations.

The vertical network (Hinterhuber and Levin) is typical of the situation where the assets are owned by several firms but are dedicated to a particular business. The core organization spreads asset ownership and risk across a number of other independent organizations and gains benefits of dependability of supply and/or distribution. Federalism allows individuals to work in organizations villages with the advantages of big city facilities (Handy).

For Snow et al. the dynamic network organization is the one that has ‘pushed the network form to the apparent limit of its capabilities’. This form operates with a lead firm that identified and assembles assets which are owned by other companies. Communication in the chain is very important.

A virtual organization uses information and communication technology to link people, assets and ideas to create and distribute things without having to rely on conventional organizational boundaries and locations. They are totally dependent on ICT to the point that the people in them seldom if ever meet (Burkhard & Horan) Key attributes are: technology, opportunism, no borders, trust and excellence.

3.4 Structuration theory, actor-networks and institutional theory

The structuration theory is not so much a ‘patterned regularity’ but, as something that emerges from the ‘routine behaviour of people, (which in turn) influences those behaviour.

By duality is meant that structure is both the medium and outcome of human interaction (Chu & Smithson). According to Giddens the duality of structure is: ‘all social action presumes the existence of structure. But at the same time structure presumes action because structure depends on the regularities of human behaviour”.

Saturation theory, developed by Giddens, focuses on the reciprocal nature of interactions between structures and the actors within them.

The Actor-Network Theory (ANT) acknowledge that actors builds networks involving other human and non-human (animals/technologies) actors (Latour 2005). ANT explains how and why the networks that are initiated are more or less successful. According to van der Duim and van Marwijk (2006) calls successful innovation calls for ‘translation’. Translation is explaining things in ways that persuade actors to fit with what a network is trying to achieve. If the four stages of translation are achieved the outcome is known as collective. Successful translation involves four stages:

1. Problematization

2. Interessement

3. Enrolment

4. Mobilization

Actor-network theorists regard structure as the process of organizing people technology, knowledge and other things into a stable network (Cunliffe).

Institutional theory consists of some similarities with the structuration theory. It emphasizes the cultural influences about design and structure. The people who decide what organizational should look like are ‘suspended in a web of values, norms, rules, beliefs and take for granted assumptions that are at least partially of their own making (Barley & Tobert). This is not a theory of change but it is a way of explaining the similarities of arrangements that are often found in a sector. Like grammar brings structure to speech and institutions bring structure and meaning to organizations. Scripts are cognitive schema informing behaviour and routines appropriate in particular contexts (Johnson 2000). Barley & Robert saw scripts as more than cognitive scheme considering them as behavioural regularities, that is, something that can be observed. Isomorphism is the tendency of organizations in the same field to adopt the same or similar structures (Konda & Hinings, 1998) and can be a reason for change (mimetic behaviour). Greenwood and Hinings showing how institutional theory connects to theory of change. They propose 3 characteristics of neo-institutional theory.

1. Institutional context: organizations embed institutions even though these institutions have little or no impact on performance.

2. Templates: pressures from institutions push organizations in the same sector to adopt the same or similar forms and designs, that is, templates for organizing, shaped by underpinning ideas and values.

3. Resistance to change: templates for organizing cover not just designs and forms but also ways of thinking and thus inertia.

To help explain the pace and scope to change two additional concepts are used; tight coupling and sectoral permeability (Greenwood & Hinings).

Tight coupling occurs when a sector exerts a high level of influence and control over the templates that organizations in the sector use. Sectoral permeability describes how much a sector is insulated from others (low: experience low influx of people from other sectors so transfer of ideas is within the sector, not across sectors).

When an organization decides to change the strategy, it should change the structure as well; one of the most important links is the relationship between strategy and structure. The consequences of a deficient organizational structure are (Child, 1988: illustration 3.14):

1. Motivation and morale may lack of clarity as to what is expected of people and how their performance is assessed.

2. Decision making may be delayed and lacking in quality .

3. There may be conflict and a lack of coordination

4. An organization may not response innovatively to changing circumstances

5. Costs may be rising rapidly, particularly in administration

“Strategy is the direction and scope of an organization over the long term which achieves advantage for the organization through its configuration of resources within a changing environment, to meet the needs of markets and to fulfil stakeholder expectations” (Johnson, Scholes and Whittington). Johnson et al. suggest that strategic decisions are likely to be:

• complex in nature

• be made in situations of uncertainty

• affect operational decisions

• require an integrated approach and involve considerable change.

Chandler found that strategy leads to structure. If the strategy works out well, it has a strongly positive effect on structure. According to Miles and Snow (1984) these organizations have an ‘agency’ structure. The structure follows strategy dictum is widely accepted and the reason why different structures associated with different structures was simple economic efficiency.

Mintzberg (1991) mentioned forces and forms which drive the organization ( figure 3.9):

1. Direction

2. Efficiency

3. Proficiency

4. Concentration

5. Innovation

6. Cooperation

7. Competition

Out of this forces Mintzberg mentioned 5 organizational forms:

1. Entrepreneurial form. Tends to be low in formalization and standardization, but high in centralization with authority in a single person.

2. Machine form. High formalization and standardization, centralized authority vested in rules and regulations, functional departments.

3. Professional form. High in complexity and formalization, but low in centralization; allows the employment of trained specialists staff for the core work of the organization.

4. Adhocracy form. Very low in standardization and formalization, little hierarchy, much use of temporary project teams.

5. Diversified form. A combination of functions and products, with products dominating; they can be of matrix form or organized as divisions on the basis of products/markets.

3.5 Influences on structure

The influence of size on structure shows that size is positively correlated with overall role specialization and formalization (Pugh). Child (1988) found that the effects of size on organizational performance, for large organizations (>2000), the more bureaucratically structured they were, the better they performed.

Within the influence of technology, technology refers to the processes by which an organization transforms inputs into outputs. Woodward categorizes companies into 3 groups; small batch (organic), large batch and mass production (mechanic). She found a relationship between the types of technology used and aspects of structure. Perrow (1967) defined technology more generally and viewed it as a combination of two variables; task variability and problem analyzability. A matrix of four types of technology is showed in figure 3.10:

• Routine. Low task variability, problems can be analyzed and mechanic structures.

• Engineering. High task variability, problems can be analyzed and organic structures

• Craft. Low task variability, problems can’t be analyzed, aspects of mechanic structures

• Non-routine. High task variability, problems can’t be analyzed, loosely organic structures.

ICT has the following impacts on structure according to Mukherji (2002):

• Supporting decentralization by enabling communication and control

• Increasing the routinization of some jobs

• Reducing hierarchy

• Creating much closer links across supply chains

Robbins(2003) talks of the ‘boundary less’ organization where both internal and external boundaries are eliminated.

Burns and Stalker identified two main structural types:

1. Mechanistic (stable environments)

2. Organic structures (dynamic environments)

Lawrence and Lorsch (1967) suggest that all organization should have organic parts and mechanic parts. According to Robbins (2003) environments can be characterized in terms of three key dimensions:

1. Capacity of environment

2. Degree of stability in the environments

3. Environmental complexity.

He concludes that the scarcer the capacity and the greater the degree of instability and complexity, the more organic a structure should be; the more abundant, stable and simple the environment, the more mechanistic a structure should be.

3.6 Structure and change

Strategy, size, technology and environment, even when combined, can at best explain only 50% of the variability in structure..

Inertia: slowness or resistance against, for example a change in structure. Inertia theory suggests that because older organizations have more stable and standardized routines they will have higher inertia. Internal forces creating inertia include:

1. Past investment in plant, technology and people that is not easily switched into other tasks.

2. Decision makers having to work with incomplete information about environments.

3. Organizational history leads to ways of operating that become embedded.

4. Structural change means disturbance to the political equilibrium that exist at any point in time.

External forces creating inertia include:

1. The barriers to exiting one industry and entering another such as regulation, capital investment and market knowledge.

2. The costs of acquiring specialist knowledge about unfamiliar markets.

3. A successful adaptive strategy for 1 organization may not lead to successful adaptation by another.

3.7 Conclusions

Design is not the same as structure, which has a stronger action perspective. Design change is influences by strategy, size, production technology, ICT and environment.

Chapter 4: Changing Organizational Culture

4.1 The informal organization

A distinguish can be drawn between the formal and informal organization (French and Bell 1990) by the organizational iceberg (figure 4.1). This metaphor shows a visible part (above water) which explains the formal organization with its goals, strategy, structure, systems and procedures and management. Furthermore the metaphor shows an invisible part (below water) which is the informal organization with its values, beliefs, leadership style and culture politics and power.

4.2 Culture

Kroeber and Kluckhohn (1952) examined over 100 definitions of culture and offered a summary definition: “Culture consists in patterned ways of thinking, feeling and reacting, acquired and transmitted mainly by symbols, constituting the distinctive achievements of human groups, including their embodiment in artefacts, the essential core of culture consists of traditional idea and especially their attached values”.

Culture is likely to be resistant to change. Three perspectives can be identified:

1. Culture can be managed

2. Culture may be manipulated

3. Culture cannot be consciously changed.

A plan to change culture:

1. Assess current situation

2. Have some idea of what the aimed-for situation looks like

3. Work out the ‘what’ and ‘who’ of moving the organization, away from it current culture to what is perceived to be a more desirable one.

4. Intervene to bring about cultural change

5. Monitor outcomes and adjust as needed.

4.3 Characteristics of culture

Brown (1995) lists the following ingredients of culture:

1. artefacts

2. language in the form of jokes, metaphors, stories, myths and legends

3. norms of behaviour

4. ethical codes

5. history

6. basic assumptions

7. symbols and symbolic action

8. heroes

9. behaviour patterns in the form of rites, rituals and ceremonies

Robbins gives more insight into how these characteristics/ingredients can take shape (illustration 4.1):

1. Innovation and risk taking

2. Attention to detail

3. Outcome orientation

4. People orientation

5. Team orientation

6. Aggression

7. Stability

Schein (2004) suggests 3 levels from shallowest to deepest:

1. Artefacts. The visible organizational structures and processes such as language, environment, rituals, ceremonies, myths and stories.

2. Espoused values level: The strategies, goals and philosophies.

3. Basic underlying assumptions: The unconscious, taken for granted beliefs, perceptions, feelings that are the ultimate source of values and actions.

Dyer’s four levels model proposes: artefacts, perspectives, values and tacit assumptions. Figure 4.2 illustrates ideas from Hostede et al. (1990) about levels of culture.

4.4 Objectivist, interpretive and the cultural web

Alvession, Bate and Brown draw attention to the distinction between 2 classifications of culture:

5. The objectivist or functional view: places culture alongside structure, technology and environment)

6. Interpretive view: interpret the meaning of culture as a metaphor for the concept of organization itself.

Johnson et al. (2008) explains the different elements of the cultural web as follows (illustration 4.3):

1. Routine ways that members of the organization behave

2. Rituals of organizational life

3. Stories told by members of the organization

4. Symbolic aspects of organizations

5. Control systems measured on what focus within the organization is important

6. Power structures

7. Formal organizational structure

Alvesson (1993) recommends combining perspectives at three levels:

1. Organization as a culture.

2. Organization as a meeting place for great cultures.

3. Local perspectives on organizational sub-cultures.

Hall’s compass of culture claims 2 components of behaviour:

- Assertiveness. The degree to which a company’s behaviours are seen by others as being forceful or directive. Behaviours that indicate high assertiveness are individualistic, pushy, challenging, hardworking, quick moving and taking control. . Behaviours that indicate low assertiveness are cautious and indecisive.

- Responsiveness. The degree to which a company’s behaviours are seen by others as being emotionally expressed. Behaviours that indicate high responsiveness are sensitive, loyal trusting, value harmony and unpredictable. Behaviours that indicate low responsiveness are factual rather than emotional, consistent and precise rather than inexact.

These two behavioural components can be combined in four different combinations which will result in different cultural styles (figure 4.3). A disadvantage of this compass model is the very small sample size (211 responses) for such complex nature of what is being analyzed.

Quinn and Rohrbaugh (1983) proposed a competing value model as a way of understanding variations in organizational effectiveness (figure 4.4). Each of the quadrants represents one of the four culture types:

1. HR model: Focus on people, morale, cohesions and team spirit.

2. Open systems: Focus on flexibility, being adaptable, looking for growth, acquiring resources.

3. Rational system: Focus on external focus and control, planning, goals, targeting, efficiency and productivity.

4. Internal process model: Focus on control.

4.5 Organizational culture types

Charles Handy refers to organizational culture as atmosphere and proposed four types using Greek gods for inspiration:

8. Power culture: A single person or group dominates (Zeus= rules by whim and impulse).

9. Role culture: Logic and Rationality ( Apollo= god of reason).

10. Task culture: Represented by a net, matrix type structures. (Athena: getting the job done).

11. Person culture: Unusual as it exists only to service the needs of participating members (Dionysus: god of self-oriented individual).

Deal and Kennedy’s (1982) proposed four genetic cultures and link more closely to the external environment. This typology dates from the early 1980’s and Kennedy (2000) agreed that these assumptions needed revising. A new model (figure 4.5) shows Trompenaars and Prud’homme’s depiction of these four types with more up-to-date examples of each culture:

1. Tough guy, macho culture: Take high risks and receive rapid feedback on what they do (entertainment or software industry).

2. Work hard/play hard culture: Take low risks, but quick feedback on actions (sales).

3. Bet-your-company culture: Take high risks, feedback on actions take a long time (projects, oil, aircraft).

4. Process culture: Take low risk and slow feedback on actions (banks, insurance, government).

Scholtz (1987) combined internal and external cultures by using three dimensions: external, internal and evolution. Based on these dimensions he identified 5 culture types:

1. Stable: Time oriented towards the past and an aversion to risk.

2. Reactive: Time orientation towards the present and an acceptance of ‘minimum’ risk.

3. Anticipating: Oriented towards the present but more accepting of ‘familiar’ risk.

4. Exploring: Time orientation towards the present and the future and an acceptance of increasing risk.

5. Creative: Looking forward to the future and accepting risk as normal.

4.6 National Culture

A distinguish can be made between convergent and divergent:

- Convergent: Forces of industrialization as well as increasing size will push organizations towards particular configurations with respect to strategy, structure and management.

- Divergent: The notion that differences in language, religion, social organization, laws, politics, education systems and values and attitudes will mean that national cultures will not converge but continue to remain distinct.

Kluckhohn and Stodtbeck (1961) claim that the cultural orientation of societies can be described using six basic dimensions (illustration 4.10):

1. People’s qualities as individuals in terms of whether people are seen as basically bad.

2. People’s relationship to their world

3. People’s personal relationships in terms of individualism or collectivism

4. an orientation to either doing or being

5. People’s orientation to time

6. People’s use of space

Hofstede’s analysis (1116.000 employees in 50 countries) resulted in the identification of four dimensions which were used to differentiate national cultural groups:

1. Power distance: How society deals with the fact that people are unequal.

2. Individualism/collectivism: Relationships between an individual and their fellow individuals.

3. Masculinity/feminity: Degree to which social gender roles are clearly distinct.

4. Uncertainty avoidance: How society deals with the fact that time runs only one way, from past to future, and that the future is unknown and therefore uncertain.

5. Long-term/short-term orientation: About virtue versus truth. Long-term look to the past and present for their value systems. Short-term look towards the future, cultivating habits.

Table 4.1 illustrates how several countries vary on these dimensions.

Figure 4.7 is a gross simplification of the complexity of distinguishing one country’s culture from another. It shows an implicit model of organizations according to the 5 dimentions: village market, family, well-oiled machine and pyramid.

Laurents identified four dimensions (table 4.2):

1. political systems

2. organizations as authority systems

3. organizations as role-formalization systems

4. organizations as hierarchical-relationship systems

Global Leadership of Organization Behaviour Effectiveness (GLOBE) tried to extend Hofstede’s earlier work and therefore understand how cultural values connected to organizational behaviour. The study found 9 dimensions (table 4.3). The dimensions are achievement, future orientation, assertiveness, collectivism, gender egalitarianism, humane orientation, power distance, family collectivism and uncertainty avoidance.

However, the work of Hofstede and Laurent’s can be criticized in terms of their attempts to ‘objectivize’ culture compared to more qualitative methods. A third method was employed by Calori and De Woot (1994) who used nondirective interviews with 51 human resource director in 40 large international companies with headquarters or major operating units in Europe (figure 4.8).The following differences between the UK, southern Eurpose and Northern Europe are found:

- UK: more in common with US: short term orientation, shareholder orientation, higher turnover of manager, more freedom for top management, more direct and pragmatic relationship between people.

-Southern Europe: more state intervention, more protectionism, more hierarchy in the firm, more family business.

- Northern Europe: strong links between bank and industry, balance between a sense of national collectivity, system of training and development of managers

Another attempt to understand cultures and their changes is the World Values Survey.

Inglehart & Baker (2000) found from their longitudinal analysis of 65 societies for both ‘massive cultural change and the persistence of distinctive cultural traditions’. They found that economic development promoted a shift away from traditional values to less religious systems will decline.

Furnham & Gunter provide examples of organizations with low scores on Hofstede’s power distance dimension having common organizational structures. National cultures overlay principles, practices and assumptions that affect management practices such as selection, development and reward and as such influence interpersonal relationships and individual performance.

Professional cultures: Exist in groups of people in similar occupations and develop through education, training, the ways knowledge is generated and the ways competence is demonstrated.

4.7 Culture and change

Figure 4.9 depicts the way elements of organizational culture and support and/or defend against change. Organic structures are more likely to be able to respond to the need fot change than mechanic forms.

Kanter (1983) describes 2 extremes of organizational culture that are not only different in structural characteristics but also differ in underlying attitudes and beliefs of the people working in them:

1. Segmentalist culture: avoid experimentation, have weak coordinating mechanisms, see problems as narrowly as possible, stress precedent and procedures

2. Integrative culture: willing to move beyond received wisdom, combine ideas from unconnected sources, see problems as wholes, related to larger wholes, look for novel solutions and problems.

She offered 10 rules for stifling innovation:

1. Regard any new idea from below suspicion.

2. Insist that people who need your approval to act first go through several other levels to get their signatures.

3. Ask departments or individuals to challenge and criticize each others proposals.

4. Express your criticisms freely and without your praise.

5. Their identification of problems a signs of failure, to discourage people from letting you know when something in their area is not working.

6. Control everything carefully.

7. Make decisions to reorganize or change policies in secret.

8. Make sure that requests for information are fully justified and make sure that it is not given out tot managers freely.

9. Assign to lower-managers, in the name of delegation and participation, responsibility for figuring out how to cut back, lay off and move people.

10. Above all, never forget that you are, the higher-ups, already know everything important about this business.

Argyris pointed to the difference between 2 kinds of learning:

1. Single-loop learning. A situation where an objective goal is defined and a person works out the most favoured way of reaching the goal.

2. Double-loop learning. Questions are asked not only about the means by which goals can be achieved, but also the ends, that is, the goals themselves. Johnson (1990) refers this to ‘organizational relearning’; process in which that which is taken for granted and which is the basis of strategic direction – the paradigm – is re-formulated.

A strong cultures implies a commonly understood perspective on how organizational life sould happen. It facilitates conflict resolution, coordination and control in a common direction, reduction of uncertainty and complexity, motivation over and above motivation from extrinsic rewards, competitive advantage (most contentious). Weak cultures exists of many different cultures, who are easily conflicting each other.

4.8 Cultural change

Culture influences organizational life. Schwartz and Davis (1981) proposed a model to help managers to assess risks and culture conflicts (figure 4.10). Assessing cultural risk helps management pinpoint where resistance to change could occur because of incompatibility between strategy and culture. This allows managers to make choices regarding whether to:

1. ignore the culture (dangerous)

2. manage around the culture (figure 4.2)

3. try to change the culture or change the strategy to fit the culture

According to Beer (1993) there are 6 steps to effective change:

1. Mobilize commitment to change through joint diagnosis of business problems

2. Develop a shared vision of how to organize and manage for competitiveness.

3. Foster consensus for new vision, competence to enact it and cohesion to move it along.

4. Spread revitalization to all departments without pushing it from the top.

5. Institutionalize revitalization through formal policies, systems and structures.

6. Monitor and adjust strategies in response to problems in the revitalization process.

4.9 Conclusions

Organization can be seen as cultures rather as having them. Cultures are unique, but exists in many different ways. Within an organization different sub-cultures can exist.

Chapter 5: Power Politics Conflict and Change

5.1 Organizational politics

Power concerns the capacity of individuals to exert their will over others, while political behaviour is the practical domain of power in action, worked out through the use of techniques of influence and others (more of less extreme) tactics (Huczynski & Buchanan). Robbins divides politics into ‘legitimate’(being normal everyday politics; forming coalitions, obstructing policies) and ‘illegitimate’(deliberate sabotage, whistle-blowing) political behaviour. Morgan poses organizations as political systems displaying different types of political rules (illustration 5.1):

1. Autocracy

2. Bureaucracy

3. Technocracy

4. Codetermination

5. Representative democracy

6. Direct democracy

‘-cracy’ is derived from kratia (=Greek term meaning power of rule)

5.2 Power

Despite the existence of different definitions of power, they all emphasize one thing: power means being able to influence the behaviour of others, sometimes in direction which the person or group would not, otherwise, have chosen. A distinguish can be made between the elasticity and the relativity of power:

1. Elasticity: Some people have more knowledge or expertise than other do and, if these are scarce and desired, that person will have more power than others

2. Relativity: One person perceives another to have power while a second person believes otherwise.

French and Raven (1959) identified 5 sources of power and their ideas have had a big influence on social power:

1. Positional power: Hierarchy.

2. Exert power: Skills and knowledge (recognized by Francis Bacon).

3. Referent power: Derives from charisma (ability to attract others to a cause).

4. Reward power: Ability to give some sort of reward (salary/promotion etc).

5. Coercive power: Power of forcing someone to do something that they would not want to do.

The possible sources of individual powers that give one the ability to influence other are:

physical power, resource power, position power, expert power, personal power, negative power. The possible methods to attach themselves to particular types of power are: force, rules & procedures, ecology, exchange, magnetism, persuasion. (Hardy)

Morgans (1997) sources of power (illustration 5.3) in organizations are: formal authority, control of scarce resources, se of organization structure, control of decisions processes, control of knowledge and information, control of boundaries, ability to cope with uncertainty, control of technology, interpersonal alliances/networks, control of counter organizations, symbolism and the management of meaning, gender and the management of gender relations, structural factor that define the stage of action, power one already had.

Robbins (2005) suggests 2 broad categories of power:

1. Formal: position within organization

2. Personal: unique characteristics

Weber’s (1947) 3 types of authority are: Tradition, charismatic authority and rational-legal authority.

Different types of power are:

- Resource power is power associated with being able to distribute or withhold values rewards. Push strategies attempt to influence people by imposing on the people if they do not do what is desired. Pull strategies emphasize material, social and other extrinsic rewards.

- The invisible power is control over resources are visible assets of the power holder but we can not see ‘invisible’ assets, like the power of control information.

- Exert or knowledge power is the power someone possess when they expertise something (‘it just can not be done’ said by a ICT’er will stop the director).

- Symbolic power is widespread in political systems, the use of violence by police forces and surveillance. It is the power to manipulate and use symbols to create organizational environments and the beliefs and understandings of others to suit one’s own purposes. Artefacts can be seen as possessing three dimensions: symbolic, aesthetic, instrumental).

- Individual power which include according to Pfeffer (1992):

• Energy, endurance and physical stamina.

• Ability to focus energy and to avoid wasteful effort.

• Sensitivity and an ability to read and understand others.

• Flexibility and selecting varied means to achieve goals.

• Personal toughness; willingness to engage in conflict and confrontation.

• Able to ‘play the subordinate’ and ‘team member’ to enlist the support of others.

5.3 The politics of powerlessness

In many sectors the higher the ladder, the fewer women are found and the percentage of women in top jobs in big corporations is very small (ILO, 2009). Reasons why women, on average, do less than men are:

1. Perceptions of social roles that men and women should perform although social attitudes are changing to lessen these distinctions.

2. Placement of women in non-strategic roles from which is harder to progress to the top and which bring exclusion from networks that are important in underpinning career advancement.

3. Child-bearing and child-care.

O’Neill (2004) explored whether men and women use different forms of upward influence at work. Upward influence concerns the way that people try to influence the attitudes of people above them in their favour. Tactics include:

1. Rationality: using facts and figures to support arguments and thinking

2. Coalition: claiming that lots of other people support you

3. Ingratiation: managing the impressions of others and flattering them

4. Exchange: using the exchange of benefits to gain favour

5. Assertiveness: being forceful in pushing for you way of thinking

6. Upward appeal: getting support of higher levels of managers for one’s ideas and plans.

Studies have linked women in the boardroom to improve corporate performance and enhanced corporate reputation in sector in close contact with consumers. Reasons include:

1. Men and women bring complementary skills to corporate management.

2. Women may be more risk averse.

3. Women who make it to the top are better managers, because they had to perform much better than men to get there.

Lien (2005), among Taiwanese women employees, gives that feelings of powerlessness came from: structural barriers, behavioural barriers, accommodation and rationalization.

Some groups of employees are powerless because of the positions they occupy. Kanter identified 3 lines of organizational power (Illustration 5.8):

1. Lines of supply

2. Lines of information

3. Lines of support.

She says: “Power is most easily accumulated when one has a job that is designed and located to allow discretion (non-routinized action permitting flexible, adaptive and creative contributions), recognition (visibility an notice) and relevance (being central to pressing organizational problems). Power also comes when one had relatively close contact with sponsors (high level people who confer approval), peer network(circles of acquaintanceship that provide reputation & information) and subordinates (who can be developed to relieve managers of some of the burdens and to represent the manager’s point of view).”

5.4 Politics, power and conflict

According to Handy competition of power nearly always turns to conflict. However, conflict is not always a bad thing, it is natural. Morgan takes a more pragmatic view pointing out that conflict is a familiar feature of life in an organizational society. The unitary and pluralist views of interest, conflict and powers are summarized below (illustration 5.9)

5.5 Conflict

Conflict must be perceived by the parties to it otherwise it does not exist. One party to the conflict must be seen as about to do or being something that the other party does not want (opposition). Some kind of interaction must take place. Illustrations 5.10 shows different levels and causes of organizational conflict:

1. Misunderstandings

2. Differences of values

3. Differences of viewpoint

4. Differences of interest

5. Interpersonal differences.

Handy (1993) argues that all conflicts start for 2 types of differences:1) goals and ideologies and 2) differences over territory.

Conflict is likely because of the power imbalances that prevail in hierarchical structures:

1. Rules and regulations: high formalization creates fewer opportunities for disputes about who does what and when. Low formalization; degree of ambiguity is such that the potential for jurisdictional disputes increases.

2. Limited resources: when resources are plentiful, the potential for conflict through competition for resources is reduced.

3. Cultural differences: conflict can arise through misunderstanding or trough inappropriate behaviour when working across national cultures.

4. Environmental change: shifts in demand, increased competition, government intervention, new technology and changing social values are possible causes for conflict.

Managing conflict will vary according to the managers’ frame of reference. An influential starting point is the Conflict Management Grid (Blake and Mouton) which has been the basis of much subsequent research (figure 5.1). It depends on the organization’s view of conflict (unitary or pluralist). Illustration 5.11 shows an extensive explanation of these 5 styles including examples. The 5 styles are:

1. Accommodating

2. Avoiding

3. Competing

4. Collaboration

5. Compromising

Each conflict-handling style has an outcome in terms of its capacity to tackle the content of the conflict and the relationship with the other party as follows:

1. Competing (win/lose situation)

2. Collaborating (win/win situation)

3. Compromising (both parties partially satisfied)

4. Avoiding (no solution)

5. Accommodating (lose/win situation)

5.6 Faces of power

McClelland (1970) argues that power has two faces; its positive and negative. The negative face (destructive) is characterized by a primitive, unsocialized need to have dominance over submissive others. Positive face (constructive) derives from a more socialized need to initiate, influence and lead and recognized other people’s needs to achieve their own goals as well as those of the organization.

The change agent is a person with a special responsibility for planning, implementation and outcome of strategic change. Cynthia Hardy argues that power ‘can provide the energy to drive the organization and its members through the strategic change process’. She identifies:

1. Power over meaning: Attempting alter values and norms.

2. System power: Power source lying within the organization and existing by virtue of its particular culture and structure. See table 5.1 for mobilizing the dimensions of power.

Nadler suggests 3 major problems associated with this transition process: problem of resistance to change, problem of organizational control and problem of power. Figure 5.2 illustrates interconnections and problems between power, conflict and political action.

Convert political action is a phrase used to describe actions of the most extreme kind witnessed during episode of change. It embraces four interrelated themes:

1. Contestation of power and authority

2. Perceptions of collective injury

3. Social occlusion

4. Officially forbidden forms of dissent

Morrill et al. see covert political action as follows:

1. It manifest in both material and symbolic forms

2. It carries an element of social visibility

3. It can be conducted by an individual acting alone but is often undertaken in a collective and organized way

4. It connects change in that it challenges routines and practices that individuals or groups see as unfair.

So why does it occur?

1. Declining control

2. Identity

3. Social networks

4. Organizational structures

DeDreu and Beersma (2005) maintain that between a low conflict (a climate of complacency and apathy) and a high conflict (a climate of hostility and mistrust) there is an optimal level of conflict that engenders self-criticism and innovation to increase unit performance (figure 5.3)

Figure 5.4 illustrates the mechanisms of a conflict with five stages moving from an initial conflict situation through to alternative positive or negative outcomes:

Stage 1: Potential opposition or incompatibility

Stage 2: Cognition and personalization

Stage 3: Intentions

Stage 4: Behaviour

Stage 5: Outcomes

Furze and Gale (1996) take an optimistic view of conflict and illustration 5.12 lists some of their guidelines: encourage openness, model appropriate responses, provide summaries and restatements of the position, bring in people who are not directly involves, encourage people to take time to think and reassess, focus on shared goals, use directions and interests to develop areas of new gain, try to build objectivity into the process and adopt an enquiring approach to managing.

To harness conflict to change Lehman and Linsky (2008) recommend the following practices:

1. Build a container: represents a space (a padded cell perhaps) where people can ‘vent their spleen’.

2. Leverage dissident voices

3. Let other resolve the conflicts

4. Raise the heat

Nadler (1988) proposed four action steps for shaping the political dynamics of change.

1. Develop power groups.

2. Using leader behaviour to generate energy in support the change.

3. Using symbols and language to create energy.

4. Shaping political dynamics of change is the need to build in stability.

Figure 5.6 shows the model of the power and motivation to block changes. The axes can be used the other way around: power to support change, motivation to support change.

5.7 Conclusions

Power and politics are driven by human differences. They are extremely difficult to research. Manager need to be aware of their own sources and levels of power and recognize the power and powerlessness of others.

Chapter 6: Leadership and Change

6.1 Leadership

“The art of leadership is saying no, not yes. It is very easy to say yes.”(Tony Blair)

Mintzberg grouped managerial roles into 3 sets (illustration 6.1):

1. Interpersonal roles

   1. Figurehead

   2. Leader

   3. Liaison

2. Informational roles

   1. Monitor

   2. Disseminator

   3. Spokesman

3. Decisional roles

   1. Entrepreneur

   2. Disturbance handler

   3. Resource allocator

   4. Negotiator

The differences between leading and managing (Kotter, 1990) are shown in illustration 6.2 and highlight that management is more about what goes on within the formal structure of the organization while leadership focuses ore on interpersonal behaviour in a broader context.

6.2 Leadership theory

Over the past 100 years, leadership theory had steadily evolved. Trait theory underpins the idea that leaders are born not made (Stodgill and Mann). Despite falling out of fashion, six traits of successful leaders were put forward:

- Lord, De Vader and Alliger (1986): intelligence, an extrovert personality, dominance, masculinity, conservatism and being better adjusted than non-leader.

- Kirkpatrick and Locke (1991): drive, leadership motivation, honesty and integrity, self-confidence, cognitive ability, knowledge of the business.

Kanter (1991) claims to have discovered the skills of change masters by researching hundreds of managers. She puts change master skills in 2 categories: personal and interpersonal skills.

Dulewicz and Herbert (1996) reported on managers who have been identified as either high-flyers or low-flyers. High-flyers scored higher than the low-flyers on the following: risk-taking, assertiveness and decisiveness, achievement, motivation and competitiveness.

Shin (1999) reveals a sobering contrast to the traits typically proposed for Anglo-Americal leaders:

1. management respect for employees

2. initiator attitudes

3. tenacity and spirit

4. network-building ability

5. emphasis on competency

Researchers began to turn to studying the behaviour that leaders use instead the trait theory. Wright (1996) groups different leaderships behaviours into 4 main leadership styles:

1. Concern for task (high level of productivity)

2. Concern for people

3. Directive leadership (leader makes all decisions)

4. Participative leadership

Two famous studies of leadership (Stodgill & Coons and Likert) identified 2 independent dimensions of leadership which were a combination of Wrights four types mentioned above:

- Consideration: The degree to which a leader builds trust and mutual respect with subordinates, shows respect for their ideas and concern for their well-being (combines Wrights styles 2 & 4)

- Initiating structure: The degree to which a leader defines and structures their role and the interactions within the group towards the attainment of formal goals. (combines Wrights styles 1 & 3)

Blake and Mouton used the studies of Stodgill and Coons and proposed that the most effective leadership styles is one which is high on both person and job dimensions. The Leadership Grid Model explains 5 styles (figure 6.1)

1. 9.1 authority-compliance leader: High concern for task, little concern for people.

2. 1.9 country club leadership: Production will follow, if people needs are satisfied.

3. 1.1 Impoverished management: Minimum concern for both production and needs of people.

4. 5.5 Middle of the road management: Concerned with moderate, rather than high performance.

5. 9.9 team management: Incorporates high concern for production and high concern for people (best approach!)

This leadership grid model is a simplification of the many differences in leadership styles. Other studies have generated longer lists of behaviours of leaders, such as Useem (1996). He even researched the characteristics of the most successful CEO:

1. being visionary;

2. showing strong confidence in self and others;

3. communication high-performance expectations and standards;

4. personally exemplifying the firm’s vision, values and standards;

5. demonstrating personal sacrifice, determination, persistence and courage.

Robbins and Coulter focused on the personality of the leader and the influence they have to get others to behave in certain ways. Charismatic-visionary leaders exhibit the following characteristics:

1. ability to explain vision to others;

2. ability to express the vision, not just verbally, but through behaviour and symbols that reinforce the vision;

3. ability to extend or apply the vision to different leadership contexts.

Although trait and style theories of leadership have some support, there are may things that can influence a leader’s effectiveness over and above a leader’s qualities and behaviour. Tannenbaum and Schmith (1973) suggest that a leader should move along the continuum (directive, participative) and select the style that is most appropriate to the situation prevailing They identify forces that determine the style of leadership to use:

1. Forces in the manager

2. Forces in the subordinate

3. Forces in the situation (two categories: nature of the task or problem itself and the general context in which the leadership activity takes place)

Fiedler agrees on the fact that leadership is dependent on the situation and this is also the centrepiece of Fiedler’s contingency theory of leadership. The 3 situational variables said to determine the style of leadership to be adopted are:

1. Leader-member relations: The extend to which a leader has the support of their group members.

2. Task-structure: The extent to which the task or purpose of a group is well defined and the work outcomes can be judged clearly as a success or failure.

3. Position power: The amount of power the leader has over followers.

Combining these 3 variables, will lead to 8 situations as shown in table 6.1 (situation 1; all variables in leader’s favour - situation 8; leader’s position is least favourable).

Hersey & Blanchard situational theory states that a leader’s behaviour should depend on the maturity and readiness of followers to accept responsibility and make their own decisions. They argue that a leader’s style should be contingent upon characteristics and attitudes of those who are led. A leader’s behaviour falls into one of 4 quadrants (figure 6.3):

1. Telling

2. Selling

3. Participating

4. Delegating

Within the contingency model it is hard to mention which variable is most important. House (1971) developed the path-goal theory, which maintains that the leader should use the style of leadership that is most effective in influencing subordinates’ perceptions of the goals they need to achieve an the way in which they should be achieved. Four leader behaviours are suggested:

1. Directive behaviour

2. Supportive behaviour

3. Participative behaviour

4. Achievement-oriented behaviour

Two dominant situational factors are relevant: 1) characteristics of followers and 2) the nature of task/job and contexts in which it takes place (figure 6.4).

Locus of control: a person’s beliefs about who controls their life. People with an internal locus of control believe that they control their own lives. People with an external locus of control believe other people control their lives.

Quinn proposed 4 models distinguished on the basis of 2 bipolar dimensions (table 6.2):

1. Adaptability and flexibility versus desire for stability and control

2. External focused or internal focused.

Contribution of contingency theory is the message that there is not one best way of leading regardless of situation. According to Parry and Bryman (2006) the contingency had serious limitations:

1. There are just too many contingent variables that the theory has to account for.

2. Studies struggled to justify why some situational variables should be included and others excluded.

3. Leader behaviour was not always situationally contingent.

4. Most research was cross-sectional (impossible to separate cause from effect).

Charisma works according to Lewin in 3 stages (illustration 6.4):

1. Frame breaking (unfreeze): Charismatic leader has the job of reducing the strength of ties to existing conventions.

2. Frame moving:

3. Frame realignment (refreeze): acceptance of new personal and social values which are then tapped by the leader.

Charismatic authority is enhanced by 4 additional dimensions that facilitate change (Conger):

1. Charisma as personal characteristic bestows on those who posses it a source of power and influence quite different to position power.

2. Charismatic leadership glorifies the leader figure and their qualities and break with traditions.

3. Charismatic leadership is short lived compared to rational-legal authority.

4. The commitment of followers to change is a consequence of their emotional ties with the leader figure and not through allegiance to a set of rules and structures that represent the ‘organization’.

A disadvantage of charismatic leaders is that followers will follow this leader even in pointless directions. Goleman (1998) claims to have found the personal capabilities that drive outstanding performance. He groups the capabilities into 3 categories; 1) purely technical skills, 2) cognitive abilities and 3) competencies demonstrating emotional intelligence (EI). He defines them as having 5 components of:

1. Self-awareness

2. Self-regulation

3. Motivation

4. Empathy

5. Social skills

There is a threshold capabilities: while being necessary for successful leadership they are not sufficient without the addition of emotional intelligence. Higgs and Dulewicz (2004) suggested that EI is concerned with achieving one’s goals through the capabilities to:

• manage one’s own feelings and emotions

• be sensitive to the needs of others and influence key people

• balance one’s own motives and drives with conscientious and ethical behaviour.

Transactional leadership: is based on giving people rewards for doing what the leader wants. It makes leaders make minor adjustments to mission and the ways people are managed. The three dimensions are:

1. Contingent rewards

2. Management by exception (active)

3. Management by exception (passive)

Transformational leadership: relies on giving followers a purpose, a vision of something to aim for and on creating follower identification with the leader. This style borrows much from Weber’s ideas about charisma.

The four dimensions are:

1. Charisma

2. Inspiration

3. Intellectual stimulation

4. Individual consideration

Disadvantages of transformation leadership theories are:

• It was usually studies in the context of top managers only

• Doubts about the integrity of managers who are viewed as transformational.

Robbins and Coulter suggest that one of the cutting-edge approaches to leadership is team leadership. Team leadership is not about 1 leader who is often viewed as hero. They propose 4 key areas that distinguish team leadership from the leader as heroic individual:

1. Ability to action a liaison with people and departments external to the team.

2. Ability to act as trouble-shooters to try and resolve issues/problems at team level.

3. Ability to resolve conflicts at team level.

4. Ability to act as coach ensuring that all team members develop to their full potential.

These abilities go some way to meeting what Kotter (1996) says organizations need:

• Fewer bureaucratic structure with fewer rules and employees.

• Fewer hierarchical levels.

• Management training and support system for all.

• Culture that is externally oriented, empowering, quick to make decisions, open and candid, more risk tolerant.

Distributed leadership places leadership in the context of participative, shared decision making, which stimulated and leads to more effective organizational change (Anderson et al. 2009). The benefits are avoiding overloading of senior staff and building motivation and commitment.

Authentic leadership is based on the idea that leaders should know themselves and know how their experiences in life have made them what they are. Attributes of authentic leaders (recall the traits approach) include: being true to themselves, humility and modesty, seeing situations from a range of perspectives, knowing one’s own sense right and wrong and adhere to personal standards in decision making.

6.3 Approaches to leadership

Although the differences are small, studies of gender and management suggest that men are more transactional and rely more on position power to get results whereas women are more likely to be transformational and use relationships rather than power to motivate (Eagly et al.). While opening up leadership positions to women is an important social goal it is far from clear that having more women in top jobs would deliver innovation, creativity and change any better than men.

Stories of change are too often overly simple and sequential stories of heroism would have us overlook the true complexity and true contributions made by largely anonymous cast.

6.4 Leading change

Greiner and Quinn (1988) proposed that different leadership stages, need different leadership styles to take the organization forward. Dunphy and Stace (1993) modelled approaches to change on 2 dimensions; 1). level of environmental readjustment needed and 2) the style of leadership to realign it. Their readjustment categories are: fine-tuning, incremental adjustment, modular transformation and corporate transformation. The categories of leadership are: collaborative, communicative, directive, coercive. The combination of these categories lead to (figure 6.7):

• Type 1 Participative evolution

• Type 2 Charismatic transformation

• Type 3 Forced evolution

• Type 4 Dictatorial transformation

The problem with this model is that it implies that managers have a choice of change strategies. It argues that change can be planned and implemented whatever outcomes are desired.

Resistance applies that the employee who is asked to change puts up a fight against it. It is often seen as a negative thing. Piderit (2000) identified different forms of resistance:

• Behavioural: endless questioning, non-compliance, disruption to planned changes.

• Affective .

• Cognitive forms of resistance.

Ford and Ford (2009) mentioned five manners to use resistance as feedback in a positive way:

• Boost awareness

• Return to purpose

• Change to change

• Build engagement

• Complete the past

Orag (2003) developed a scale to measure individual differences with a model of resistance:

1. Routine seeking (behavioural)

2. Emotional reaction (affective)

3. Short-term focus (affective)

4. Cognitive rigidity (cognitive)

Scepticism towards change is: doubt about the viability of a change for attainment of its stated objectives. Scepticisms do not believe that the intended change will bring about the intended benefits if it is implemented.

Cynicism differs in that is it disbelief about management’s implied or stated motives for a specific organizational change (figure 6.8).

Readiness for change involves shaping, perhaps conditioning, attitudes and beliefs to be favourable. Communication strategies need to emphasize 2 messages:

1. The need for change to explain the gap between what organization need to be doing and what it is doing

2. Affected parties ability to change and the ability to do it well.

A figure to combine the readiness for change and urgency is showed in figure 6.9 and leads to the following typology (Harris and Mosshole, 1993):

• Low readiness/low urgency: communicate

• Low readiness/high urgency: crisis

• High readiness/low urgency: maintain

• High readiness/high urgency: quick response

Graen et al. introduced the LMX theory (leader-member-exchange) and argued that the different types of social exchanges fall into two types:

1. In-group: Employees are involved in decision making and might receive projects to lead.

2. Out-group: Employees are kept at arm’s length and only receive information needed to do their job.

The OCB (organizational citizenship behaviour) refers to the discretionary behaviour that people display in the workplace (such as covering for a colleague off sick). The link between OCB and LMX found that OCB directed towards the supervisor are stronger than OCB directed to the organization.

The force field analysis (Lewin, 1951) is used to analyze the range and the strength of forces for and against change (figure 6.10). It is based on the idea that social situations can be seen as equilibria, where the 2 sets of forces are in balance and when the opposing forces are stronger than the driving forces. The model:

• identifies and brings out into open the forces that are impacting on a situation;

• identifies power interest of actors involved and should lead to ideas how it influence the actors to reduce the opposing forces and strengthen the driving forces;

• Can be incorporated into other change analysis such as the TROPICS (Paton & McCalman).

The following steps must be undertaken (illustration 6.10):

1. Define the problem in terms of the present situation.

2. List the forces working for and against the desired changes.

3. Rate each change of the forces for and against change in terms of strength.

4. Use the diagram (such as figure 6.10).

5. Label each line to indicate whether that force is very important, important or not important.

6. For each very important and important force supporting the change, indicate how the force might be strengthened.

7. Agree on those action that appear most likely to help solve the problem of achieving change.

8. Identify the resources that will be needed to take the agreed actions and how these resources may be obtained.

9. Make a practical action plan designed to achieve the target situation.

Paton and McCalman (2000) suggest that the force field analysis can be incorporated into other change situation analyses (sucha s TROPICS) and Strebel (1992) offers the following advice:

1. Look for closed attitudes

2. Look for an entrenched culture

3. Look for rigid structures and systems

4. Look for counterproductive change

5. Asses the strengths of the overall resistance to change

Three main functions of leadership within a group can be conceptualized:

1. Strategic function: Develop a sense of direction in the group.

2. Tactical function: Define the tasks necessary to achieve the group’s goals and make sure that these tasks are carried out effectively.

3. Interpersonal function: Maintain the morale, cohesion and commitment of the group.

6 steps to effective change (Beer, 1990):

1. Mobilize commitment to change through joint diagnosis of business problems

2. Develop a shared vision of how to organize and manage for competitiveness

3. Foster consensus for the new vision, competence to enact it and cohesion to move it along

4. Spread revitalization to all departments without pushing it from the top

5. Institutionalize revitalization through formal policies, systems and structures

6. Monitor and adjust strategies in response to problems in the revitalization process.

Transformation efforts fail (Kotter, 1995)through:

1. not establishing a great enough sense of urgency;

2. not creating a powerful enough coalition;

3. lacking a vision;

4. undercommunication in a big way;

5. not removing obstacles to the new vision;

6. not systematically planning for and creating short-term wins;

7. declaring victory too soon;

8. not anchoring changes in the corporation’s culture.

6.5 Conclusions

The existence of many different leadership theories provide insights of approaches and implication. Furthermore, resistance to change is better understood and good communication is one of the best strategies for dealing with it. Learning how to learn from resistors is a challenge to modern managers and leaders.

Chapter 7: Hard Systems

7.1 Unitary, pluralist and coercive relationships

Flood and Jackson classify various methodologies in a similar way but use terms ‘simple system’ and ‘complex system’ instead of difficulties and messes. Three ideological viewpoints, presenting 3 types of relationships between people (illustration 7.1):

1. Unitary. People relating to each other from a unitary perspective:

   • share common interests

   • have values and beliefs that are highly compatible

   • largely agree upon ends and means

   • all participate in decision making

   • act in accordance with agreed objectives

2. Pluralist. People relating to each other from a pluralist perspective:

   • Have a basic compatibility of interest

   • Have values and beliefs that diverge to some extend

   • Do not necessarily agree upon ends and means, but compromise is possible

   • All participate in decision making

   • Act in accordance with agree objectives

3. Coercive. People relating to each other from a coercive perspective:

   • Do not share common interests

   • Have values and beliefs that are likely to conflict

   • Do not agree upon ends and means and ‘genuine’ compromise is not possible

   • Coerce other to accept decisions.

7.2 Approaches to change

Some would say the logical and rational approach is the only way to solve a problem or response to opportunities. These hard approaches rely on the assumption that clear change objectives can be identified in order to work out the best way of achieving them.

7.3 The hard systems model of change

The HSMC (hard system model of change) is a method that has been developed for designing and managing change. The HSMC is useful when dealing with situations that lie towards the ‘hard’ end of the hard-soft continuum change situations. It provides a rigorous and systematic way of determining objectives for change. The process can be thought of as falling into 3 overlapping phases:

1. Description phase: describing and diagnosing the situation, understanding what is involved, setting the objective for the change.

2. Options phase: generating options for change, selecting the most appropriate option, thinking about what might be done.

3. Implementation phase: putting feasible plans into practice and monitoring the results

Within these 3 phases a number of stages can also be identified (illustration 7.3):

1. Description

2. Situation summary

   1. Stating the commitment to the analysis and the reason for doing it.

   2. Describing in words and with diagrams, the situation within which changes will be set.

3. Identify objectives and constraints

   1. Listing objectives that are consistent with the themes which emerged from the diagnostic stage.

   2. Arranging the objectives into a hierarchy of objectives (objective tree, figure 7.1).

   3. Listing constraints in term of those that are inviolable and may be modified.

4. Identify performance measures

   1. Formulate measures of performance, which can be put against the objectives on the objectives tree.

      2. Options

5. Generate options

   1. Drawing up a list of options. This can be done by making use of any number of creative thinking techniques such as: brainstorming, ideas writing, focus groups and research.

6. Edit options and detail selected options

   1. Possibilities page 292

7. Evaluate options against measures

   1. Check that the model you have used is an accurate representation of the system.

   2. Consider whether the model seems to contain any bias or mistake assumptions.

   3. Evaluate each option, or a combination of options, according how well it meets the performance measures.

      3. Implementation

8. Develop implementation strategies

   1. Pilot studies leading to eventual change

   2. Parallel running

   3. Big bang

9. Carry out the planned changes

7.4 Model in use

Pages 295 – 304 shows all the steps of the HSCM applied on an organization.

7.5 Further uses

The HSMC model is used for situation with a hard complexity. It can be used to find problems and options in a quick manner. The therefore named Q & D (quick and dirty) analysis can be a useful starting point for the change agents tackling a more complex problem (Paton & McCalman, 2008). It will indicate key factors and potential barriers to change, it will highlight the principal players and give an indication of resource requirements. Such an analysis will at any early stage set the scene for things to come and provide the change agents with a valuable insight into the complexities of the transition process. An example of the Q&D analyses can be found in the book: illustration 7.5 and figures 7.6 and 7.7.

7.6 Conclusions

The hard systems model is particularly useful when an area of the organization may need to be changed but may not infringe on other areas and when choices based on ration decision making can be made.

Chapter 8: Soft Systems

8.1 Manage change

Ackoff (1993) identifies three kind of things that can be done about problems:

1. Resolve: Approach that relies on common sense. To resolve a problem is to select a course of action that yields an outcome that is good enough.

2. Solved: Solvers use scientific methods, techniques and tools. They eschew qualitative models in favour of quantitative models to be completely objective.

3. Dissolved: “To dissolve a problem is to change the nature, and/or the environment, of the entity in which it is embedded so as to remove the problem.” Problem dissolvers idealize rather than satisfies or optimize because their objective is to change the system involved or its environment in such a way as to bring close to an ultimately desired state, one in which the problem cannot or does not arise. Only a minority of managers uses this approach and they are those whose principal organizational objective is development rather than growth o survival, and who know the difference.

“People do not act rationally, it is to way that they act according to their own view of what is rational for them” (Carnell). Change in this scenario will only be possible and effective if it is accompanied but processes that address feelings, needs of individuals. Hard systems models of change, are not sufficient to explain organizational messes and are extremely limited in providing a model for planning and implementing change in these situation.

Organization Development (OD) is an umbrella term for a set of values and assumptions about organizations and the people within them that, together with a range of concepts and techniques, are thought useful for bringing about long-term, organizational wide change.

8.2 Organizational development

Different definitions of OD exists and most of them show the following characteristics:

1. It emphasizes goals and processes but with particular emphasis on processes as a means of improving an organization’s capacity to change.

2. It deals with change over the medium to long term, that is, change that needs to be sustained over a significant period of time.

3. It involves the organization as a whole as well as its parts.

4. It is participative, drawing on the theory and practices of the behavioural sciences.

5. It has top management support and involvement.

6. it involves a facilitator who takes on the role of a change agent.

7. It concentrates on planned change but as a process that can adopt to a changing situation rather than as a rigid blueprint of how change should be done.

In addition French and Bell (1999) give the following OD principles:

1. OD focuses on culture and processes.

2. OD encourages collaboration between organization leaders and member in managing culture and processes.

3. Teams of all kinds are particularly important for accomplishing tasks and are targets for OD activities.

4. OD Focuses on the human and social side of the organization and in so doing also intervenes in the technological and structural sides.

5. Participation and involvement in problem solving and decision making by all levels of the organization are hallmarks of OD.

6. OD focuses on total system change and views organizations as complex social systems.

7. OD practioners are facilitators, collaborators and co-learners with the client systems.

8. An overarching goal is to make the client system able to solve its problems on its own by teaching the skills and knowledge of continuous learning through self-analytical methods.

9. OD relies on an action research model with extensive participation by client system holders.

10. OD takes a developmental view that seeks the betterment of both individual and the organization.

The OD approach believed that people at all levels throughout the organization are both drivers and the engines of change. Paton & McCalman (2008) offer 3 fundamental concepts with respect to the management of people gaining their commitment to their work and organization:

1. Organizations are about people.

2. Management assumptions about people often lead to ineffective design of organizations and this hinders performance.

3. People are the most important asset and their commitment goals a long way in determining effective organization design and development.

OD approached to change assume that work groups and teams are an essential element in the process of designing and implementing change. OD reinforces the systematic nature of organizational life and the fact that change in one part of the organization will inevitably impact on operations in the other part. OD challenges the assumption that a single important cause of change with clear effects can be found, as well as the assumption that any cause and its effects are necessarily closed related in space and time. Any organization is a balance of forces built up and refined over a period of time. Because OD as a concept is assumed to operate throughout an organization, he OD process is most definitely not a ‘quick fix’ to the latest management problem. Furthermore: OD approached to change are essentially processes of facilitating planned change.

The concept of a learning organization is built upon the proposition that there is more than one type of learning. Argyris and Schon (1996) distinguish:

- Single-loop learning. Goal oriented, problems are viewed as a difficulty.

- Double-loop learning. Process oriented, problem are viewed as a messy

Senge terms single-loop and double-loop learning as adaptive and generative.

8.3 The OD process

OD as a process for instigating and implementing change has 2 important characteristics:

1. Process of change which has a framework of recognizable phases that take the organization from its current state to a more desired future state.

2. OD process can be perceived to be a collection of activities and techniques that, selectively or accumulatively, help the organization and/or parts to move through these phases.

Lewin’s model of change is a well known OD model:

- Unfreezing: shaking up of people’s habitual modes of thinking and behaviour to heighten their awareness of the need for change.

- Movinging: Process of making the actual changes that will move the organization to the new state.

- Refreezing: Stabilizing or institutionalizing the changes.

The disadvantages of Lewin’s model are focused on the last phase, refreezing. The idea of cementing the changes in place to create a new organizational reality. Thereby it tends to ignore the increasingly turbulent environment and the need for continuous change.

8.4 OD model of change

Change is a continuous process of confrontation, identification, evaluation and action. The key to this is what OD proponents reder to as a action-research model. Frech & Bell, Coghlan & Brannick and Cummings & Worlet give detailed descriptions of action research: “A collaborative effort between leader and facilitators of any change and those who have to enact it.” Seven simplified steps (figure 8.2):

1. Management and staff perceptions of problems.

2. Data gathering and preliminary diagnosis by those concerned with leading the change.

3. Feedback to key client, management and those involved in the change.

4. Joint agreement of the problems.

5. Joint action planning.

6. Implementation.

7. Reinforcement and assessment of the change.

This approach is different from the hard systems model of change it is an iterative process that is continuous and which continuous as part of everyday organizational life. Furthermore each of the components of the model may be used to form each of the phases that make up a typical OD process and this approach is firmly embedded in the assumption that all who are of who might be involved in any change should be part of the decision-making process to decide what that change might be and to bring it about.

Figure 8.3 shows the major stages of the OD process:

1a and 1b: The present and future

Phase 1a and 1b are strongly related, these processes act paralell, feeding each other until the goal is achieved.

Diagnose current situation (1a) by detect strategic drift and gather data on capacity to response to a change in direction or ways of operating. A more detailed examination of organizational purposes, goals, structure, culture, leadership(styles) and training and development provision is needed. Table 8.1 is a comparison of different methods of data collection which can be put together to create a rich picture (description of soft systems)

Develop a vision for change (1b): creative phase. A vision can energize commitment as people will be working towards a common goal.

2. Gain commitment to the vision and the need for change

Feedback from the stages 1a and 1b is most important! Gaining recruits for change is not easy, as Pugh’s (1993) four principles for understanding the process of organizational change show:

1. Organization are organisms.

2. Organizations are occupational and political systems as well as rational resource-allocation.

3. All members of an organization operate simultaneously in the rational occupational and political systems.

4. Change is most likely to be acceptable with people who are successful and have confidence in their ability and the motivation for change.

3. Develop an action plan

Beginning the phase of managing the transition from an organization’s current state to its desired future state. It is very important (3 steps):

1. Who guides planning/implementation?

The success of using an OD approach depends on those who act as facilitators of the change; the change agent. The role of the change agent is:

• to help the organization define the problem by asking for a definition of what it is;

• to help the organization examine what causes the problem and diagnose how this can be overcome;

• to assist in getting the organization to offer alternative solutions to provide direction in the implementation of alternative solutions;

• to transmit the learning process that allows the client to deal with change on an ongoing basis by itself in the future.

Kotter (1996) mentions four key characteristics as being essential for it to be effective:

1. Position power

2. Expertise

3. Credibility

4. Leadership

Illustration 8.6 summarizes competencies of an effective change agent in five categories (Buchanan and Boddy 1992):

1. Goals: sensitivity to changes in key personnel, clarity in specifying goals, flexibility in responding to changes out control of the project manager.

2. Roles: Teambuilding activities, networking skills, tolerance in ambiguity

3. Communication: skills to transmit need for change effectively, interpersonal skills, personal enthusiasm, stimulating motivation

4. Negotiation: selling plans and ideas, negotiate with key players

5. Managing up: political awareness, influencing skills, helicopter perspective

Beckhard & Harris (1987) developed a technique called ‘responsibility charting’ that assesses the alternative behaviours for each person involved in a series of action designed to bring about change. The actors identified can include (figure 8.6):

R = Person responsibility to initiate action

A = Whose approval is required

S = Those who can provide support and resources

I = Those who merely need to be informed or consulted (can’t veto action)

Certain rules for making a responsibility chart are according to French and Bell (1999):

• Assign responsibility to only one person.

• Avoid having too many people with an approval- veto function on an item.

• The person with approval-veto on most decisions could become a bottleneck.

• The support function is critical.

• The assignment of functions to persons at times becomes difficult.

2. What needs to change?

Pugh devised a matrix possible change initiatives on the different issues that can hamper change and the level at which they occur (figure 8.7). The matrix is useful for type of intervention required (horizontal), level at which it should take place (vertical). Beckhard & Harris suggest the following organizational subsystems:

• Top management

• Management-ready systems

• Hurting systems

• New teams or systems

• Staff

• Temporary project systems

3. Where should intervention take place?

The planning of OD interventions must also take account of the degree of change needed that is the scope of the change activities. In terms of Pugh’s OD matrix, considering whether:

• people’s behaviour needs to change, and/or;

• organization’s structure and systems need to change and/or;

• context or the setting needs to change.

Beckhard and Harris concept of the action plan being a ‘road map’ for change effort is a useful one. An effective plan should have characteristics as: relevance, specificity, interaction, chronology, adaptability.

4. Implement the change

Different tools and techniques can be used to lead a change.

• Surveys can be used to assess the attitudes and morale of people across the organization and are used at different stages in the OD process.

• Organisational mirroring is a set of activities in which a particular organizational group, host group, gets feedback from representatives from several other organizational groups how it is perceives and regarded.

• Inter-group confrontation confront organizational issues that go beyond particular expertise.

• Role negotiating is developed by Harrison (1972) which involves individuals or groups negotiating to ‘contract’ to change their behaviour on a quid pro quo basis. It concentrates solely on the roles they plan and their behaviour as part of these.

• Process consultation introduced by Schein (1998) regards process PC as a central part of organizational development.

• Team building as an essential part of OD process.

• Life and career planning

• Role of short-terms wins. Short terms wins are visible, unambiguous, clearly related to change effort. Kotter (1996) identifies 6 ways in which short-term wins can help organizations transformations:

1. Provide evidence that sacrifices are worth it

2. Reward change agents with a pat on the back

3. Help fine-tune vision and strategies

4. Undermine cynics and self-serving resistors

5. Keep bosses on board

6. Build momentum

5. Assess and reinforce the change

In hard organizational situations it is relatively easy to assess the extent to which change has been achieved. This is more difficult for soft, messy situations. A number of ways are available for measuring the softer issues associated with change:

1. Survey or cultural audit.

2. Interviews with individuals or focus groups.

3. An examination of turnover and absenteeism rates.

4. An analysis (through observation or questionnaire) of group performance .

5. Re-picture the organization.

According to Farquhar, Evans and Tawadey (1989): “A real danger in the process of organizational change is the failure to carry it through sufficiently far”. It is pointless expecting people’s behaviour to change if this is not reinforces by concomitant changes in personnel policies and practices, including appraisal, career development and reward systems.

8.5 Assessment of the OD model

OD as a philosophy and a process can be critiqued according to a number of criticisms:

1. OD does not always face up to harsh realities.

2. OD is limited when change situation are ‘constrained’.

3. OD requires ‘out of the ordinary’ leadership.

4. OD fits uneasily with the structures and culture in the public sector. The problems are:

   • Differences between the assumptions and values of the OD and the bureaucratic model are big.

   • Public sector organizations are supervised by many interests which makes it difficult to get support and gain approvals.

   • Financial support is difficult to obtain for OD work in public sector organizations.

   • In public sector organizations the large variety of different and frequently conflicting interests are difficult to apply.

These point show a depressing picture that OD would succeed in public sector organization. However, since public sector organizations move towards market principles OD models for change become more realistic and easier to apply. Parkes (2008) brought about change to reduce sickness levels across the council workforce. Parkes notes that, what was then a newly team learnt a number of lessons for the future:

• Make sure you have a strong leadership at the top

• Involve managers in setting the policy

• Be consistent in your approach right across the organization

• Train everyone you need to in what is expected fro them

• Accurate, timely communications are essential o people understand what you are trying to achieve.

• Stick at it and do not give up

5. OD does not ‘work’ in all cultures.

OD interventies will struggle to be accepted in societies that score high on the dimensions of Hofstede (1980): power distance, uncertainty avoidance, masculinity and moderate individualism.

Etnocentric: Organizations that tend to offer a standard product across the world and operate with centralized decision making from the home country base.

Geocentric: Organization accept that things might be done differently in different countries. Managers will be trained in a decentralized way.

8.6 Conclusions

A similarity between hard and soft models for change is that they suggest a planned change. If you will follow the described steps, the change will be successful (according to these theories). Soft systems address the issues of soft complexity inherent messy situations.

Chapter 9: Future Challenges

9.1 Introduction

The purpose of this final chapter is to look more closely at the act of changing and recent thinking on how it happens and how best to catalyze it.

9.2 Future organizations

Internal and external factors affecting businesses, lifestyles and social structures. The external factors are summarized below:

1. Choice (benefits of increasing choice seem unlikely to be shared equally)

2. Falling birth rates and rising longevity

3. Mobility (increasing)

4. Independence

5. Creativity

6. Information and communication technology

7. Technology

8. Social structures

9. National competitiveness

The psychological contract (Rousseau and Parks) represents ‘an individual’s beliefs regarding terms and conditions of a reciprocal exchange agreement between that person and another party’. Each employee has a uniquely individual mental picture of their contract such that what upsets one employees may not upset another. Shore and Tetrick (1994) identify 3 types of contact violation:

1. violation of distributive justice

2. violating of procedural justice

3. violating of interactional justice

The psychological contract has a big influence on employee acceptance and when change is in the air, managers need to be alert to how employees will perceive things.

Miles et al. (2000) emphasize the importance of innovation. Collaboration is the key to innovation: meta-capability. 3 conditions for collaboration to happen:

1. People need time to discuss ideas, reflect and listen that might produce fresh ideas.

2. They need to develop strong bonds of trust between each other.

3. People need a sense of territory marking one’s place in the outcomes of he collaborative process.

9.3 Changing

Appreciative Inquiry (AI) is an organizational change methodology that takes a radically different view from traditional approaches, being a far more collective method that focuses on the positive psychology generated by asking positive questions rather than concentrating on negative questions and issues. AI is a search for the best in people and what is happening in their organizations. Eight principles how to implement:

1. Constructionist principle: reality is constructed through social interactions.

2. Simultaneity: expresses the idea that inquiry and change occur together.

3. Poetic principle: expresses the notion of organizations as narratives, continually being co-authored by the people in them together with outsiders who work with them.

4. Anticipation: images of the future that people create begin to shape their constructions and discourses about the future

5. Being positive

6. Wholeness: all groups and stakeholders connected to a change should be involved to maximize the capacity for creative outcomes.

7. Enactment: about living the future in the present.

8. Free choice: people should not be constraint in terms of how they contribute to an inquiry.

AI is a form of action research. The eight principles are used to underpin a four stage cycle to engage people: discovery, dreaming, designing, destiny.

Some implications of AI:

• very skilful facilitators are required to accentuate the positive and prevent regression to negative thinking.

• The overt focus on the positive could suppress the voices of people with genuine grievances

• Some decisions and intentions would need referral back to the council who would ‘put out the fires’ lit by AI processes.

Some qualities of AI:

• The focus on changing how people think and not what they do.

• The focus on creating an environment in which ideas lead to self-organizing change.

Capacity to change is about their ability to undertake large-scale changes without compromising daily operations or subsequent change processes. Building on the extensive advice there is on successful change Meyer and Sansaker offer the following prescriptions:

• framing

• participation

• pacing and sequencing

• routinizing

• recruiting

By focusing on these prescriptions, capacity for change will increase.

Change capacity is conceptualized as comprising 3 correlated dimensions; learning, change process and organizational context (figure 9.1) à WHO

WHO is the World Health Organization, which is on a mission to see that people all over the world enjoy the best possible health.

When organizations embark on change, employees’ routines are challenged.

Sense-making (Weick ,1995) is a way of discovering meaning and is a key ingredient in understanding how organizing takes place and the organization that results from it. To focus on sense-making is to portray organizing as the experience of being thrown into an ongoing, unknowable, unpredictable streaming of experience in search of answers to the question: ‘what’s the story’. Sense-making is influenced by the actions of others who play a ‘sense-giving’ role.

9.4 Future research challenges

Prettigrew, Woodman & Cameron suggest 6 issues of the limitations in change research:

1. Multiple context and levels of analysis

2. Time, history, process and action

3. Change processes and organizational performance

4. International comparative research

5. Reciprocity, customization, sequencing and pace

6. Scholar- practitioner engagement

Table 9.1 show trends in organizational development from classic organizational development to new organizational development.

Makshak & Gant suggest that 5 practices are being used in contemporary organizational development situations to take us beyond classical positivist approached and their limitations.

1. Appreciative inquiry

2. Changing mindsets and consciousness

3. Diversity and multicultural realities

4. Different models of change

5. New approaches to organizational change centre around changing discourses on the basis hat it is through discourse that people develop and live out the realities that shape their behaviour

9.5 Conclusions

There are key areas that should be considered in relation to the diagnosis, implementation and review of change situations.

1. Multiple paths to change

2. The challenge of diversity:

3. Empowerment and control

4. Creativity and innovation