What is an Organization?. An organization is a consciously coordinated social entity, with a relatively identifiable boundary, the functions on a relatively continuous basis to achieve a common goal or set of goals.
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What is an Organization? • An organization is a consciously coordinated social entity, with a relatively identifiable boundary, the functions on a relatively continuous basis to achieve a common goal or set of goals. • Organization‘s structure has having three components: 1) complexity, 2) formalization, and 3) centralization. • Organizations tend to be centralized or tend to be decentralized. • Organization design is concerned with constructing and changing an organization’s structure to achieve the organization’s goals. • Organization theory it is the discipline that studies the structure and design of organizations. • In contrast, organization theory takes a macro perspective. OT is concerned not only with employee performance and attitudes but with the e overall organization’s ability to adapt and achieve its goals.
What is a System • A system is a set of interrelated and inter-dependent parts arranged in a manner that produces a unified whole. • Every system is characterized by two diverse forces: 1) differentiation and 2) integration. • Systems are classified typically as either closed or open. • A perfect closed system would be one that receives no energy from an outside source and from which no energy released to its surroundings. • The open system recognizes the dynamic interaction of the system with its environment. • Open systems, however, have some additional characteristics: • A system can reach the same final state form differing initial conditions and by a variety of paths. 7) Balance of maintenance and adaptive activities. Maintenance activities ensure that the various subsystems are in balance and that the total system is in accord with its environment. Adaptive activities are necessary so that the system can adjust over time to variations in internal and external demands. 8) Equifinality 1) Environment awareness 2) Feedback 3) Cyclical character 4) Negative entropy 5) Steady state 6) Movement toward growth and expansion
System growth (Organizational Life Cycle) • All organizations are born, live, and die. • They evolve through a standardized sequence of transitions as they develop over time. Transitions for one stage to another are predictable rather than random occurrences. • Five-stage model : • 1) Entrepreneurial stage. infancy • 2) collectivity stage. mission is clarified • 3) Formalization-and-control stage. efficiency and stability are emphasized. Departure of members causes no severe threat to the organization. • 4) Elaboration-of-structure stage. Diversifies its product or service markets. • 5) Decline stage.
Organizational Life Cycle Maturity Decline Formalization & control stage Formalization of rules Stable structure Emphasis on efficiency Growth Formation Elaboration of structure stage More complex structure Decentralization Diversified markets Decline stage High employee turnover Increased conflict Centralization Collectivity Stage Informal communication and structure High commitment Entrepreneurial stage Ambiguous goals High creativity
Organizational Question • Almost every issue within an organization can be cataloged as an answer to one of five questions: • 1) How do we know if an organization is successful? • 2) What are the components of an organization? • 3) What determines the structure of an organization? • 4) What options do managers have for designing their organization and when should each be used? • 5) How do you apply a knowledge of organization theory to the resolution of current management problems?
Org. Theory Development (Mgt. History) • Prior to about 1960, organization theory tended to be dominated by a closed-system perspective. Beginning around 1960, however, organization theory began to take on a distinctly open-system perspective. • The rational perspective argues that the structure of an organization is conceived as a vehicle to effectively achieve specified objectives. The social perspective emphasizes that structure is primarily the result of the conflicting forces by the organization’s constituents who seek power and control. • Type 1 theorists, also known as the classical school. • In 1911 of Frederick Winslow Taylor’s Principles of Scientific Management. • He argued)R(1) the placement of rule-of-thumb methods for determining each element of a worker’s job with scientific determination; (2) the scientific selection and training of workers; (3) the cooperation of management and labor to accomplish work objectives, in accordance with the scientific method; and (4) a more equal division of responsibility between managers and workers, with the former doing the planning and supervision, and the latter doing the execution. • Henri Fayol was consolidating this principles of organization. • Fayol proposed fourteen principles. • Esprit de corps. • “ideal-type” organization structure proposed by the German sociologist, Max Weber? • Bureaucracy. • Ralph C. Davis. Primary objective of a business firm is economic service.
Mgt. History (2) • Type 2 The human-relations school. • These theorists operated under closed-system assumptions but emphasized the informal relations and noneconomic motives operating in organizations. • Hawthorne studies. • Social norms of the group, therefore, were concluded to be the key determinants of individual work behavior. • An organization is a cooperative system is generally credited to Chester Barnard. • Douglas McGregor’s. • McGregor’s Theory X and Theory • Warren Bennis argued the other extreme-conditions now pointed to flexible adhocracies as the ideal organizational form in fifty years. • Type 3 • The need for organizations to adapt to a changing environment if they are to survive. • Daniel Katz and Robert Kahn’s book The Social Psychology of Organizations, Was a major impetus toward promoting the • Type 3 theorists include theorists include those who advocate organization size as an important factor influencing structure such as the Aston Group. • Technology as an influencing factor was also considered by Woodward & Perrow. • Type 4 • March and Simon challenged the classical notion of rational or optimum decisions. They argued that most decision makers selected satisfactory alternatives-alternatives that were good enough. • Pfeffer proposes that control in organizations becomes an end rather than merely a means to rational goals such as efficient production of output. An organization’s design represents the result of the power struggles by these diverse coalitions.
Mgt. History Summary Date: 1900-1930 1930-1960 1960-1975 1975- Systems Perspective: Closed Closed Open Open Ends Perspective: Rational Social Rational Social Central Theme: Mechanical People & Contingency Power & efficiency human designs politics relations Classification: Type 1 Type 2 Type 3 Type 4 Key People: Fredrick Taylor Elton Mayo Katz & Kahn March & Simon Henri Fayol (Hawthorne Woodward & Pfeffer Max Weber studies) Perrow Ralph Davis Chester Barnard Aston Group Douglas McGregor (Theory X & Y) Warren Bennis
Organizational Effectiveness (OE) • This belief that OE defies definition has been widely accepted. • The goal-attainment approach states that an organization’s effectiveness must be appraised in terms of the accomplishment of ends rather than means. • Assumes that organizations are deliberate, rational, goal-seeking entities. • Management by objectives ( MBO ). • The fact that organizations have multiple goals also creates difficulties. • In some cases, official goals may merely be rationalizations to explain past actions rather than guides to future actions.
OE (2) • A systems approach to OE • Implies that organizations are made up of interrelated subparts. If any one of these subparts performs poorly, it will negatively affect the performance of the whole system. • Focuses on the means necessary to assure the organization’s continued survival. • Output/input (O/I), transformations/input (T/I), transformations/output (T/O), changes in input/input (I/I). • The problem is that its focus is on the means necessary to achieve effectiveness rather than on organizational effectiveness itself. • The strategic-constituencies approach • Proposes that an effective organization is one that satisfies the demands of those constituencies in its environment from whom it requires support for its continued. • The task of separating the strategic constituencies from the larger environment is easy to say but difficult to do in practice.
OE (3) • Different Aspects of OE • Flexibility versus control. • Well-being and development of the people. • Well-being and development of the organization. • Means versus ends. • Summary of the Four OE Approaches • Goal attainment • Systems • Strategic constituencies • Competing values
Complexity, Formalization & Centralization • Complexity. formalization, and centralization are the three core dimensions of organizational structure. • Complexity: • Horizontal differentiation. • Vertical differentiation • Spatial differentiation • The most visible evidence in organizations of horizontal differentiation is specialization and departmentation. • Vertical differentiation refers to the depth in the structure. • Vertical differentiation is a response to an increase in horizontal differentiation. Leads to
Span of Control • The span of control defines the number of subordinates that a manager can direct effectively. • Narrow or wide spans. • Spatial differentiation: organization’s offices, plants, and personnel are dispersed geographically. • The paradox of organizations. • The more complex an organization, the greater the need for effective communication, coordination, and control devices. This creates pressures to add managerial personnel to facilitate control, coordination, and conflict reduction. So the economies that complexity creates may be counterbalanced by the increased burden of keeping the organization together.
Formalization • Formalization can be explicit or implicit. • Employees required to “clock in ”at their work station by 8 A.M. or be docked a half-hour’s pay and, once at that work station, are required to follow a set of precise procedures dictated by management. • Standardizing behavior reduces variability. McDonald’s, for example, can be confident that a Big Mac will look and taste the same whether it is made at an outlet in Portland, Maine; Biloxi, Mississippi; Fairbanks, Alaska; or Amsterdam. • The greater the formalization, the less discretion required from a job incumbent. Sound judgment is a scarce quality and cost more to buy. Organizations have to formalize jobs wherever possible so as to get the most effective performance from employees at the lowest cost. • The greater the professionalization of a job, the less likely it is to be highly formalized. • Employees higher in the organization are increasingly involved in activities that are less repetitive and require unique solutions.
Externalized & Internalized • Externalized: unskilled. • Externalized behavior. The formalization is external to the employee; that is, the rules, procedures, and regulations governing the individual’s work activity are specifically defined, codified, and enforced through direct management supervision. This characterizes the formalization of unskilled employees. • Internalized: professionalization preprogrammed behaviors. • Internalized behavior through social specialization. • Socialization refers to an adaptation process. • For example, one of the main tasks of a business school is to socialize students to the attitudes and behaviors that business firms want. • As the level of professionalization increases in an organization, the level of formalization decreases.
Selection • Choosing New Employees • A “good” employee is defined as one who will perform his or her job in a satisfactory manner and also whose personality, work habits, and attitudes align with what the organization desires. If the selection process does anything, it tries to prevent the employment of misfits; that is, individuals who do not accept the norms of the organization. • Selection should be recognized as one of the most widely used techniques by which organizations control employee discretion. • Role Requirements • Role expectations may be explicit and defined narrowly. • By loosening or tightening role expectations, organizations are actually loosening or tightening the degree of formalization.
Org. Strategy • Goals refer to ends. Strategy refers to both means and ends. This includes all the employees in the org. • Strategy can be defined as the determination of the basic long-term goals and objectives of an enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying out these goals. • Strategy is not necessarily a well-thought-out and systematic plan. It evolves over time as a pattern in a stream of significant decisions. Environmental Factors & Org. Capabilities Org. Structure Strategy
Types of Strategy • Corporate-level strategy. • This strategy seeks to answer the question, In what set of businesses should we be? • Business-level strategy. • Seeks to answer the question, How should we compete in each of out businesses? • Alfred Chandler published in the early 1960s. • Organizations typically begin with a single product or line. • Because the organization‘s strategy is narrowly focused, the structure to execute it can be low in both complexity and formalization. • From the single-product line, companies typically expand activities within their same industry. Vertical integration. • Finally, if growth proceeds further, into product diversification, again structure must be adjusted if efficiency is to be achieved. t t+1 t+2 Time Product Diverivication Strategy Low High Simple Functional Divisional Structure
Miles & Snow • Defenders • seek stability by producing only a limited set of products directed at a narrow segment of the total potential market. • The result is a structure made up of high horizontal differentiation, centralized control, and an elaborate formal hierarchy for communications. • Prospectors • The opposite of defenders. Finding and exploiting new-product and market opportunities. Innovation may be more important than high profitability. 3M. • The structure is flexible. It will rely on multiple technologies that have a low degree of routinization and mechanization. There will be numerous decentralized units. The structure will be low in formalization, have decentralized control, with lateral as well as vertical communications. • The prospector cannot maximize profitability because of its inherent inefficiency.
Miles & Snow (2) • Analyzers • Capitalize on the best of both the preceding types. They seek to minimize risk and maximize opportunity for profit. Their strategy is to move into new products or new markets only after viability has been proved by prospectors. Analyzers live by imitation. • Analyzers will tend to have smaller profit margins in the products and services that they sell than will prospectors, but they are more efficient. • But in this compromise there can be costs. If situations change rapidly, demanding that organizations move fully in either direction, their ability to take such action is severely limited. Little Change and Uncertainty Rapid Change and High Uncertainty Defender Reactor Analyzer Prospector
Michael Porter • No firm can successfully perform at an above-average level by trying to be all things to all people. Management must select a strategy that will give its organization a competitive advantage. • Cost -leadership strategy. • Efficiency of operations, economies of scale, technological innovation, low-cost labor, etc. • Differentiation strategy. • The key is that the attribute chosen must be different from those offered by rivals and significant enough to justify a price premium that exceeds the cost of differentiation. • Focus strategy. • Aims at a cost advantage (cost focus) or differentiation advantage (differentiation focus) in a narrow segment. • Stuck in the middle. • Organizations that are unable to gain a competitive advantage by one of the previous strategies.
Power & Control (Contingency Perspective ) • John Child in the early 1970s. • 1) Decision makers have more autonomy than that defined only by the environment. • 2) Organizational effectiveness should be construed as a range instead of a point. The satisfice concept. • The range between maximizing and ”good enough ” creates an area in which managers can utilize their discretion. • 3) Organizations occasionally have the power to manipulate and control their environments. • 4) Perceptions and evaluations of events are an important intervening link between environments and the actions of organizations. • Restricted by two facts: (1) Commitments often lock an organization into a limited domain and (2) there are barriers to entry in many markets. • The contingency perspective is committed to rationality.
Power & Control (Dominant coalition) • In contingency perspective, the dominant coalition and top management are assumed to be one and the same. • First, individual decision makers aren’t able to be totally rational. Second, even if individuals could be rational, organizations can’t! • Realistically, decision makers recognize only a limited number of decision criteria. • The choice of alternatives and assessment of those alternatives, will reflect their self-interests. • Rather than considering all alternatives and listing them, once a minimum level is attained, the search stops and the choice is made. Decision Maker’s Interests Organization’s Interests
Power & Control (Coalitions) • While organizations are made up of individuals, they are also made up of coalitions of interests. • Few situations are so congruent, or the facts so clear-cut that judgment and compromise are not involved. • Coalitions form to protect and improve their vested interests. • Probably the most visible coalitions form along departmental lines. • Any coalition that can control critical information, expertise, or any other resource can acquire power and become a dominant coalition.
Power & Control (Authority & Power) • Authority is part of power but, power does not require authority. • When we use the term power we mean an individual’s capacity to influence decisions. As such, authority is actually part of he larger concept of power; that is , the ability to influence based on an individual’s legitimate position can affect decisions, but one does not require authority to have such influence. • Secretaries of high-ranking executives typically have a great deal of power but very little authority ? As gate-keepers for their bosses. • Those with formal authority may have the clout but, then again, that others in the organization may have created strong power bases that allow them to have even greater influence over decisions. Power Core Authority Level
Power & Control (How to Get Power) • Power is, first and foremost, a structural phenomenon. • The evidence indicates that there are three roads to the acquisition of power: (1) hierarchical authority, (2) control of resources, and (3) network centrality. • Formal authority is a source of power. Those occupying senior management slots, can influence through formal decree. • If you have something that others want, you can have power over them. The resource must be both scarce and important. • If resource scarcity increases the power of the resource holder, then the proximity of relevant substitutes for the resource should also be considered.
International Organizational Structure • Subsidiaries in Early Stages of Internationalization • A subsidiary is opened because an on-site presence is required from the start ChiefExecutiveOfficer Production Marketing Finance Personnel France Japan Australia Taiwan Production Marketing Finance Personnel
Asian Vs Western Management • Some Basic Features of the Two Management Styles
Organizational Characteristics of MNCs • Specialization • U.S. plants tend to have more horizontal specialization while Japanese plants tend to have more vertical specialization • Centralization • Japanese firms tend to have higher centralization while U.S. firms have more delegation and involvement at lower levels • Characteristics • MNCs tend to keep the structures of the home-based headquarters even when established overseas for many years (p18)
Organizational Structure Design • Growth Stage • Org. structure changes over the growth of the firm • Young firms tend to be centered around one or few people who are the founders or entrepreneurs • As staffing and product lines grow, more formal structures are required to maintain efficiency • Reorganization (or re-engineering) is required when market conditions change and the firm must change • Organizational Configurations • There are at least 243 distinctly different org. structure types • Five common elements in every org. structure: • Operating core-employees who perform the basic work related to production of products and services • Strategic apex- top-level managers who are responsible for overall org. • Middle line-managers who connect the operating core to the strategic apex • Technostructure--analysts who have the responsibility for affecting certain forms of standardization in the organization • Support staff-people who provide indirect support services for the org.
Organizational Structure Designs • Simple Structure • Strengths: simplicity; fast and flexible; low cost; goals are clear • Weaknesses: limited application (only can be used in small size organizations); too much power with single person Owner Manager Manager Manager Manager
Organizational Structure Designs ChiefExecutiveOfficer • Machine Bureaucracy Structure • Strengths: standardization; high efficiency; economies of scale; employees in peer groups so easier management; experienced management not required due to high level of standard rules • Weaknesses: each unit is independent and so does not know what other units are doing; org. goals not well known; unknown or new situations cannot be handled Dir. PublicRelations Exec. Dir. VPFinance VP Personnel VP Marketing VP Manufacturing Manager Manager Manager Manager Manager Manager Manager Manager Manager Manager Manager Manager Manager Manager Manager Manager
Organizational Structure Designs • Professional Bureaucracy Structure • Combines standardization with decentralization requiring top management to give up power in order to give professional high skill employees more effectiveness. Used in schools, hospitals and firms requiring highly trained employees. • Strengths: Combines standardization with decentralization requiring top management to give up power in order to give professional high skill employees more effectiveness. • Weaknesses: same as for professional bureaucracy; highly trained employees may have professional directions and restraints that do not match firm’s goals ChiefExecutiveOfficer Dir. PublicRelations Exec. Dir. VPMarketing VP R&D Research Strategy Promotions Electronic Materials Packaging
Organizational Structure Designs • Divisional Structure • A set of autonomous units, each usually a machine bureaucracy, coordinated by a central headquarters (a business in a business). This structure gives more power to division managers. • Strengths: more focus and responsibility given to each division; gives top management more freedom from day-to-day operations; any division can be cut without hurting other divisions; being part of a larger structure gives economies of scale ChiefExecutiveOfficer • Weaknesses: duplication of effort; conflict between divisions; resentment over lack of division freedom; coordination problems Dir. PublicRelations Exec. Dir. VP Asia VP Europe VP Personnel VP Personnel Marketing Marketing Production Production Manager Manager Manager Manager Manager Manager Manager Manager Manager Manager Manager Manager
Organizational Structure Designs ChiefExecutiveOfficer • Adhocracy Structure • Staffed mostly by professionals with high levels of experience. Supervision needs are small and behaviors are internalized and management has chosen employees based on well established professional criteria. Unlike the professional bureaucracy, the adhocracy does not make rules for new problems, but each and every problem has a unique solution so standardization and formalization is not needed. Power flows to anyone with expertise, regardless of the position. • Strengths: ability to respond quickly; adaptivity; creativity; collaboration; can handle complex, highly technical tasks • Weaknesses: conflict easy to arise due to blurred lines of authority; no economies of scale; inefficient; not long lasting Dir. PublicRelations Exec. Dir. VP Operations VP Marketing VP R & D Manager Manager Manager Manager Manager Manager Manager Manager Manager Manager Manager Manager
Bureaucracy (A Closer Look) • Max Weber’s ideal organization, characteristics: • The central theme in Weber’s bureaucratic model is standardization. • Dangers: • One of the best-known arguments presented against the machine bureaucracy was made by social psychologist Bennis. Weber’s Bureaucracy • Division of labor. • Well-defined authority hierarchy. • High formalization. • Impersonal nature. • Employment decisions based on merit. • Career tracks for employees. • Separation organizational and personal lives. • The rules become more important than the ends that they were designed to serve, the result being goal displacement and loss of organizational effectiveness. • People will do just the bare minimum to get by. The rules, therefore, become interpreted as setting the minimum standards for performance rather than identifying unacceptable behaviors. • A major cost of bureaucracy is employee alienation. • A “cog in the wheel.” People Dangers Org. Dangers • Rapid and unexpected change. • Growth in size. • Increasing diversity. • Change in managerial behavior.
Bureaucracy (Very Successful Form) • Bureaucracies are everywhere! • It works. Bureaucracies are effective in a wide range of organized activities: manufacturing, and voluntary associations. • Large size prevails. Organizations that succeed and survive tend to grow to large size. And we know that bureaucracy is efficient with large size. • Natural selection favors bureaucracy. • Societal values are unchanging. North Americans have traditionally been goal-oriented and comfortable with authoritarian structures. • Environmental turbulence is exaggerated. • The professional bureaucracy has emerged. • Bureaucracy maintains control.
Adhocracy (A Closer Look) • The matrix is a structural design that assigns specialists from specific functional departments to work on one or more interdisciplinary teams, which are led by project leaders. • A cornerstone of bureaucracy-which requires every employee to have one and only one boss to whom he or she reports. Employees in the matrix have two bosses—their functional department manager and their project manager. VP Personnel VP Personnel Marketing Marketing Production Production Manager Manager Manager Manager Manager Manager Manager Manager Manager Manager Manager Manager
Adhocracy (Theory A & Z) • The major disadvantages of the matrix • Confusion it creates, its propensity to foster power struggles, and the stress it places on individuals. • Not unusual for project managers to fight over getting the best specialists assigned to their projects. • Theory A, J & Z • Large American bureaucracy (the Theory A organization) and the characteristics inherent in the typical large Japanese company (the Theory J organization). William Ouchi. • Theory Z to describe the Americanized version of the Japanese model. • Theory A bureaucracy is designed to control employees through a tightly monitored structural system. • It is adapted to handle high rates of employee turnover. • Jobs are defined narrowly, and employees are required to specialize. • The organization responds to this individualistic ethic by treating people as just another input cost. Employees, then, are not significantly different from a machine. You purchase them to obtain utility of service and can discard them if they break or become obsolete.
Theory A, J & Z (2) • The Japanese model (Theory J) is a very different; essentially a function of low turnover. • Much more likely to mirror an adhocracy than the mechanistic bureaucracy that Theory A creates. • Centered around the generalists rather than specialists. • Japanese employees are appraised against a number of criteria, only one of which is current output or performance. • A holistic concern for the well-being of employees. • The Theory Z organization is the Japanese model adapted to fit into American culture. • American values such as individualism and allocating rewards on the basis of performance. • Treat their employees as a valuable and scarce resource, to be nurtured over the long term. • Essentially adhocratic. Complexity is low since. Formalization is also low.
Change • The objective of planned change is to keep the organization current and viable. • Causes of change: • Change agents • Change agents are those in power and those who wish either to replace or constrain those in power. • You should expect, therefore, that every change agent will bring along his or her own self-interests. • Management can use outside experts to give the appearance of impartiality. • Purchase of new equipment. • Scarcity of labor. • New MIS system. • Government regulations. • The economy. • Unionization.. • Consumer-advocate groups. • Mergers or acquisitions. • Actions of competitions. • Decline in employee morale. • Increase in turnover. • Sudden internal or external hostility. • Decline in profits.
Organizational Change • Model for Managing Organizational Change Forcesinitializingchange Determinants Feedback Changeagent Org. Initiator What is tobe changed? Interventionstrategies Structure?Technology?Org. process? Implementation tactics Change process Implementation InterventionParticipationPersuasionEdict Unfreeze-Move-Refreeze Change Results Org.effectiveness
Change Tactics • Intervention, participation, persuasion, and edict. • Intervention tactic is characterized by change agents selling their change rationale to those who will be affected. • participation, change agents delegate the implementation decision to those who will be affected. • Internal or external experts then use persuasion to sell their ideas. • Edict. When this tactic is used, change agents merely announce changes and use memos, formal presentations, or the like to convey their decision. • Edict was successful just 43 percent of the time. Participation and persuasion achieved success rates of 84 and 73 percent, respectively. Intervention, while used in only 19jpercent of the cases, attained a perfect 100 percent success rate. • Management would prefer to avoid change, if it were possible, because of its cost, disruptive impacts, and threat to management’s control.
Conflict • The average manager spends approximately 20 percent of his or her time dealing with conflict. • Conflict: behavior by organization members which is expended in opposition to other members. • Whether conflict exists is a perception issue. • The goal of management is not harmony and cooperation-it is effective goal attainment! Elimination of conflict is not realistic in complex organizations, nor would such elimination be desirable. • Rules and regulations reduce conflict by minimizing ambiguity. • Conflict potential is enhanced when two or more units depend on a common pool of scarce resources such as physical space, equipment, operating funds, capital budget allocations, or centralized staff services such as the same secretary. • This is especially likely to occur when true value differences exist among the participants. The research suggests that the high interaction incurred in participation acts to solidify differences more than facilitate coordination and cooperation.
Managing Conflict • Conflict • Normally, we think of conflict as hindering the achievement of the organization’s goals, but another view of conflict is that it improves effectiveness by stimulating change and improving the decision-making process. • Traditional View • All conflict is BAD and must be resolved quickly • Interactionist View • An org. with no conflict is static and does not adapt Conflict & Org. Effectiveness Conflict-Survival Model Conflict Change Adaptation Survival
Sources and Solutions to Conflict • Trouble Makers • Some employees choose to fight. This group can become continuous conflict stimulators-looking for problems, spreading rumors, twisting and distorting facts to instigate disturbances, and similar actions. Such people, and all large organizations have as least one, seem to enjoy upsetting the system. To the degree that they establish allies in their cause, they can become a major source of conflict. • Interdepartmental conflict • Increases when departments possess a great deal of knowledge of each other’s activities. Imperfect knowledge, on the other hand, clouds self-interest, diminishes disparities, and makes coordination easier. (Knowing too much is not good) • A superordinate goal: • A common goal, held by two or more units that is compelling and highly appealing and cannot be attained by the resources of any single unit separately. • The cooperative environment grows as effort is directed away from concern with separate and independent units to recognition that the conflicting units are part of a larger group, a synergy developing from the collaboration of forces.
Sources and Solutions to Conflict (2) • Scarcity of a resource • The easiest manner in which to resolve the confrontation, and the one most satisfying to the conflicting parties, is through expansion of the available resources. • An appeals system provides the right of formal redress. • Authority • The authority that superiors have over the conflicting parties is important enough and its usage spread so widely that it can be singled out as a separate resolution technique. • Managers can manipulate communication messages and channels in such ways as to stimulate conflict.
Org. Culture • Organizational culture • A system of shared meaning. In every organization there are patterns of beliefs, symbols, rituals, myths, and practices that have evolved over time. These, in turn, create common understandings among members as to what the organization is and how its members should behave, • Most large organizations have a dominant culture and numerous sets of subcultures. • Core values • A strong culture is characterized by the organization’s core values being intensely held, clearly ordered, and widely shared. • Strong culture increases behavioral consistency. • The founding fathers or mothers of an organization traditionally have a major impact in establishing the early culture. Key characteristics • Individual initiative. • Risk tolerance. • Direction. • Integration. • Management support. • Control. • Identity. • Reward system. • Conflict tolerance. • Communication patterns.
Influencing the Org. Culture • Selection (most widely used method to influence org. culture) • Typically, more than one candidate will be identified who meets any given job’s requirements. • Results in the hiring of people who have common values (ones essentially consistent with those of the organization) or at least a good portion of those values. • Top Management • The actions of top management also have a major impact on the organization’s culture. • Culture (socialization) • is transmitted to employees in a number of other forms—the most potent being through stories, rituals, material symbols, and language. • New employees are potentially most likely to disturb the beliefs and customs that are in place. The organization will, therefore, want to help new employees adapt to its culture.