Introduction

This lecture introduces you to the

important concepts met in
organization theory. We shall learn
what a theory is, what an
organization is, and its importance
in society We
shall further differentiate between
organization theory and other
theories we learn in business such
as Organization Behaviour (O.B.)
Organizational Psychology and
Management theory. It is assumed
you have already covered
1.3 What is Organization
Theory?

Organization theory is the discipline that

studies the structure and the design of
organizations. Organization theory refers
to both the descriptive and prescriptive
aspects of the discipline. It describes how
organizations are actually structured and
offers suggestions on how they can be
structured to improve their effectiveness.
It is a body of knowledge about
organizations which has been developed
through the scientific method.


1.3.1 Sources of Knowledge

 (a) Common sense: When people share a common belief then.

it must be true e.g. opposites attract, “birds of a feather flock
together.” Although common sense may at times be correct or
true, it may sometimes present different versions of the truth.
 (b) Appeal to Authority. The second source of knowledge is
appeal to authority. This means that what experts say is
correct (is the truth) and it is to be accepted.
 c) Deductive Reasoning. This method of building knowledge
follows the
following format:
 all short men are clever
 and Kariuki is a short man
 ness therefore, Kariuki is a clever person

(d) Unsystematic Research. This form of creating
knowledge entails the
carrying out of research and making conclusions without
following a systematic
(scientific) method for example, one i4ay want to find the
proportion of cars in
and Nairobi which are Toyotas. He or She stops at a main road
e.g. Uhuru Highway
 counts all the cars that pass there, in terms of makes
and at the end of his research, finds that Toyotas
were 10% of the cars passing through. He/She
therefore
concludes that 10% of cars in Kenya/Nairobi are
Toyotas.

(e) Scientific/Systematic Research. In this
method of building knowledge, the researcher
follows a systematic (scientific) method which can
be tested and followed by other researchers in
order to confirm the findings. In the systematic
of method the following steps are necessary:
 Step 1 State study objectives
 Step 2 State in detail proposed data collection
sources e.g. primary data or of secondary data
Step 3 State data analysis methods
 Step 4 State data presentation

1.3.2 What is a Theory?

 A theory is a body of knowledge used to

describe and predict. It is an integrated set of
statements that summarise and explain
research findings. It is an explanation of some
phenomenon and it consists of principles that
describe relationships observed in some
situation. In other words a theory tries to
explain some practice observed in nature. In
organization theory the primary focus is the
study of organizations at the macro level. In
other words we are trying to learn the whole
organization or departments: the way it is
structured: the ways the various variables
relate to each other and the way groups
behave in an organization set up.
Purpose of Organization
Theory 1.4.3.

The purpose of organization theory is to

explain the component parts of an
organization and their relationships so that
some prediction can be made about how
they are likely to behave under certain
conditions. It is a way that scholars try to
see and think about
organizations based upon patterns and
regula1ities in organization design. It is a
theory
that studies organizations, their structure
and the relationships between its various
parts.
It focuses on organizations as entities in
themselves i.e the whole organization.
Organizational Behaviour and
Organization Psychology

 1.4.1. What is Organizational Behaviour?

 Organizational behavior refers to the behavior of
people in organizations. It tries to
understand the behavior, attitudes and
performance of people in organizations. In
addition it discusses human psychological
processes that can affect behavior in
organizations for example it tells us how a
system of rewards affects a person’s behavior
and performance in organizations.
Organizational behavior derives its concepts
from
political science, psychology, anthropology
and social psychology.

1.4.2. What is Organizational Theory?
Organizational theory focuses on the design
and structure if organizations. It also looks
at organizations as social systems. The
discipline of organization theory derives its
concepts from sociology, and anthropology.
Organizational theory therefore studies
organizations from their macro aspects

1.4.3. How does Organizational Theory
Differ from Organizational Behavior?
Organizational theory looks at an
organization as a whole - its objectives,
goals, structure and context. On the other
hand organizational behavior looks at the
micro elements of the organization, the
individual worker
1.4.4. What is Management Theory?
Management theory on the other hand is the
study of a particular group (managers) in
the organization. How this group behaves,
what makes them do what they do and
how they can be made to behave in a way
that benefits the organization is in the field
of management theory.

1.4.5. What is Organizational
Psychology?
Organizational psychology is a science of
behaviour and mental processes.
Psychology is a study of mind or the soul.
Thus in psychology, we study both the
mental experiences such as hunger and
thirst or anger and their outward
manifestations such as drinking or
aggression.

1.5 Importance of
Organization Theory

 For people who are or will be managers, organization

theory provides significant insight and
understanding to help them be better managers in
a rapidly changing world. For example, one of the
greatest threats to organization today is the
inability of management to adapt to the speed and
chaos of technological change. Although
companies have made massive investments in
technology, they are only beginning to implement
the
organizational and management changes needed
to make technology and the internet
competitive weapons. Understanding organization
theory can help managers make these necessary
changes by helping them see and understand how
technology interacts with other elements of
organization and its environment. In a very real
sense organization
theory can make managers more competent and
more influential by giving them an understanding
 1.5.1 Level of Analysis
 In systems theory, each system is composed of
subsystems. Systems are nested within systems
and one level of analysis has to be chosen as the
primary focus. Four levels of analysis normally
characterize organizations. The individual human
being is the basic building block of organizations.
The human being is to the organization what a cell
is to a biological system. The next higher system
level is the group or department. These are
collections of individuals who work together to
perform group tasks. The next level of analysis is
the organization itself. An organization is a
collection of groups or departments that combine
into a total organization. Organizations themselves
can be grouped, together into the next higher level
of analysis, which is the inter organizational set
and community. The inter organizational set is the
group of organizations with which a single
organization interacts. Other organizations in the
1.6 The Meaning of an
Organization

An organisation is a consciously coordinated

social entity with a relatively verifiable
boundary that functions on a relatively
continuous basis to achieve a common
goal/ or goals. This definition brings out
certain facts about an organization. These
facts are that organizations are:
Consciously coordinated This implies that
management deliberately allocate tasks
and responsibilities.
Social entity This implies that the unit is
composed of people or groups of people
who interact with each other while
performing their various tasks. The
interaction pattern that people follow in an
An organisation has a relatively identifiable
boundary. This boundary exists to identify
members from non- members. Members
enter into explicit and implicit contracts
with the organisation.
People in an organisation have some
continuity or bond.
Organisations exist to achieve certain goals.

 1.6.1 Characteristics of Organizations
 All organizations exhibit the following
characteristics:
 Composed of people who interact with each
other
 Have identifiable boundaries.
 Are consciously coordinated and structured.
 Are relatively continuous. I.e. are established to
last.
 Have goals, which they strive to achieve.
 It is a system: i.e. it is composed of subsystems
of parts which constitute a unitary whole.
 
1.6.2 Benefits of Organisations
In this section we wish to find the
answer to the question” why do we
study organizations?”
Organisations pervade all aspects of
contemporary human life - society as a
whole, the economy and even our personal
lives. You may be interested, in pursuing a
career in
management. As a manager you may want
to know how organisations operate and
how to structure them so that they
become effective. You may also want to
pass a required
course in a university or college - thus you
 Basic needs (biological needs)
 These are the needs necessary to maintain life. They
include the need for
food, water and shelter. Many organisations are
formed to satisfy the
biological needs.
 
 
 Social needs.
 These are needs that satisfy man’s desire for
love, affection, social acceptance, recognition and
self-fulfilment.
 Economic utilities: - these are the goods and
services that provide
man with material well-being. The food he eats,
the car he drives, e.g. are examples. Other
economic utilities include roads, education and
Political utilities: - these refer to the
benefits man receives associated
with political stability, national defence,
security and internal stability.
Social utilities: - these are benefits
attained through association with other
people e.g. sense of belonging, talking
with other people and social contacts,
provides man with some of his most
gratifying experiences.
Religious utilities: - helps man to find
answers to questions on death, life,
morality and the universe.
Aesthetic utilities:- these help a man
achieve his desires in art and
music.
Time utilities: - compared with an
individual effort, an organisation can make
available a good for use by an individual
within a short time what would take years
for an individual to manufacture. For
example one individual would take years if
not decades to make an aeroplane but
through the use of an organisation, the
same can be made within a year or less.

 Place utilities: - these are benefits enjoyed by
people who live in different climates of goods
produced in another climate for example an
individual living in a cold climate e.g.
Greenland is able to enjoy a cup of coffee
grown in a hot climate.
 Form utilities: - a manufacturer who sells a
pick-up vehicle to a farmer exemplifies this.
The manufacturer converts raw materials into
the form of the truck for the farmer who needs
to know nothing about the manufacturing
process.
These utilities overlap. To some extent there
can be a trade-off of utilities. In other words,
more or less of some utilities can be traded for
more or less of other utilities. For example
Organisations also store utilities:
Organisations permit society to create and
store advances in knowledge and
technology and to pass them along to
succeeding generations; thus with
organisations, it is not necessary to re-
invent the wheel or other technological,
social and cultural advances. This permits
rapid and higher level of technological
advancement as succeeding generations
start from a higher level.
 Organisations enable human beings to
enjoy consumer surplus.
 Consumer surplus is the difference between the
total utility the consumer receives from a
quantity of a good and the total rice he pays
for that quantity. Let us explain this further.
The law of diminishing marginal utility
postulates that the first unit of a good has
more utility than the second unit of a good For
example suppose the utility of the first glass of
milk to a hungry customer is kshs 30 while the
utility of the second glass is Kshs 28 and so on
as depicted in the table below. Customer
surplus is the difference between the price
he/she pays for the glass of milk and the utility
 Other benefits of organisations
 In addition to the benefits cited above organizations do
provide the following other benefits
 They bring together resources to achieve desired goals
and outcomes.
 They are able to produce goods and services efficiently.
 They facilitate innovation and creativity.
 They enable the use of modern technology.
 Are able to adapt to and influence a changing
environment.
 They create value for owners, customers and employees.
 They accommodate on-going challenges and diversifying
ethics and the motivation and coordination of
employees.
 They are able to accommodate and utilize ethnic and
other diversities among organizational participants

1.7 Relationships in
Organisations

In almost all organizations the following

relationships are likely to exist:

Accident Relationships
Parasitic Relationships
Mutual Relationships
Transcendental Relationships
Let us now briefly explain each of these;
 

 1.7.1. Accidental Relationship.

This is an association in which no participant
deliberately associates with another, yet from
such an association benefits often accrue to at
least one participant. For example a
man who happens (without planning the
association) to walk down the street of a crime
ridden neighbourhood at the same time with a
policeman is less likely to be hurt or robbed by
his assailants because of his association with
the policeman which occurred merely by
accident. In a business scenario, this can occur
when an executive of a clothing store gets an
idea for a new type of garment from two
 1.7.2 Parasitic Relationship
 This type of relationship exists when one gains
from an association at the expense of another.
For example a flea gets its nourishment from
its host- a dog, a cat or a human being. In a
business organisation, a parasitic relationship
exists when one organisation as a matter of
policy receives support, advantage or service
from another without payment or proper
return.

At another level, a relationship where work is
extracted for less than appropriate pay is
parasitic. Another parasitic relationship can be
demonstrated by firms which conspire to form
a monopoly and charge unreasonable prices to

1.7.3 One-Way Relationship
 In this relationship, one party benefits without
harming or helping the other. The one
providing the benefit indifferently tolerates the
one benefited. Here the relationship is
deliberate at least on the part of the benefited
one. An example is a business organisation
that goes about its normal business while
permitting itself to be observed by a student.
However, for this relationship to be one- way,
the organisation being researched must not
expect any form of benefit- including a copy of
research project.

1.7.4 Mutual Relationship
This relationship is both deliberate and
mutual for both parties. Both parties
expect to benefit from this association.
Most relationships in nature are mutual or
mutually beneficial. In most business
organisations relationships are mutual.
Both expect to make profit. In addition, the
relationship between the organization and
its employees is mutual.

 1.7.5 Transcendental Relationship.
 This type of relationship calls for much more than
mutual. It requires the participants in the
relationship to aspire for more than their individual
benefit or profit. The participants in a
transcendental relationship aspire for benefits to
accrue not only to him and his partner but also to
other individuals, organisations and society not
directly associated with the relationship. In a
transcendental relationship, a person acts in such
a way that his advantage will also be the other’s
advantage rather than his advantage being other’s
disadvantage. Achieving transcendental
relationships in organisations offers a great
challenge in the human society. Nevertheless the
advantages are great. In nature, transcendental
relationships can be seen in animals when it leaves
its meat (after being satisfied) to others. In the
human society it requires an exceedingly high
degree of personal honesty and responsibility
 1.8. Complexity of Organizations
 Organizations are complex structures. This is because
they are composed of complex beings in the form of
human beings. Human beings bring their diversity, their
temperament, and their attitudes in to the organization
making quite a complex whole. Human beings are basic
building blocks of organisations. Human beings are
biological rather than machine systems Consequently,
organisations are extremely complex systems far more
complex than other systems. The human organisation
has many characteristics of simpler systems but it also
incorporates new forms of complexity. The sources of
these complexities are characteristics formed in human
groups which include:
 Norms and values which are intangible and hard to detect.
 Cultural dimensions such as music and art.
 System elements (human beings) display awareness.
 The structure of elements and roles continuously changes.
 Information is processed through abstract forms of
language, symbols and meaning systems.
Informal organizations that are also referred
to as work groups are:
Formed in every formal organisation by its
members.
Parallel to the formal organisation.
Are a shadows of the formal organization .
 1.9.1 Why do Informal Organisations Arise?
 In almost all organizations informal organizations
exist to serve the following purposes:
 To satisfy social needs.
 To provide a sense of belonging.
 To provide information on approved behaviour.
 To provide a sympathetic ear.
 Assist individuals in meeting objectives.
 To provide opportunity for influence and creativity.
 To enable members to perpetuate cultural values.
 Provides the members with an additional channel of
communication.
 Provides satisfaction and stability to members.
 Compensates for managerial limitations.

 1.9.2 Comparison of Informal and the Formal
Organisation.
 Goals. The informal organisation also has goals that could
either be congruent to those of the formal organisation
or not.
 Norms. A norm is a standard of behaviour expected from
group members. Formal groups have norms and so do
informal groups. However, the pressure to conform
to the informal group member’s norms is greater.
 Role. A role consists of the total pattern of expected
behaviour. In the formal are to organisation, it includes
but goes beyond the official content of the job
a large description. Informal group members are also
expected to have a role. Whether or not the informal
group supports the role of group members, has a major
impact on the role of members in the formal group.
 Leadership. In the formal organisation leaders (or
managers) are appointed. The formal group leaders
emerge from the group; there is no formal title attached
to the individual.

 Structure. A formal organisation has a structure- an
organisational chart,
hierarchical and horizontal differentiation and formal
coordinating mechanisms.

 In the informal organisation there is also a structure,

with hierarchical levels and horizontal differentiations.
However, there are no formal structures or coordinating
mechanisms Differentiation is informal.
 Cohesiveness. This refers to the degree of attraction that the
group has for each of
its members. This is important in both the formal and informal
organisation. Cohesiveness is measured by such things as
loyalty to the group, feeling of
responsibility for a group effort, defending against outside
attach, friendliness,
e.t.c. In the informal group, cohesiveness is usually stronger.
 Size. The size of the formal work group is determined by the
need of the
organisation. The size of the informal group is determined by
the size of the
formal group. The size of the informal group is usually smaller.
 Synergism. In the formal group, the concept of synergism
 1.9.3 Benefits of the Informal Organisation
 Assists in accomplishing work in organizations.
 Helps to remove weaknesses in the formal structure e.g. where
a manager
has given orders which may be inconsistent with
organisational needs eg.
8.00 to 5.00 pm.
 Lengthens the effective span of control by exchanging
knowledge and
experience within the group, workers are able to learn what
is expected of
them without needing supervision.
 Compensates for violations of formal organisation principles for
example
a manager may need the help of an employee to achieve
efficiency or
effectiveness.
 Provides additional channels of communication to some extent,
which is t
faster and accurate.
 Provides emotional support to employees which is necessary
for efficient performance for employees but which the formal
organisation does not
provide.
 Encourages better management. The acceptance by managers
 1.9.4 Dysfunctions of Informal Organisations
 May work counter to the purposes of the formal organisations especially
when
the formal group goals are counter to the organisation’s goals.
 Reduces the degree of productivity and control by managers .Due to the
influence of the informal group on members behaviour, the manager
is unable f the to control the members, nor predict outcomes
 Reduces the number of practical alternatives. The solidarity developed in
the
informal groups strengthens their cohesiveness and thus reduces
manager’s
ability to change the groups of workers.
 Increases the time required to complete activities. Informal workgroup
behaviour such as gossiping, consultations, long coffee breaks, e.t.c
are time consuming and can lead to delay in task completion.
 Resistance to change. To the extent that change can affect informal
groups they will resist change. Therefore assuming change is
functional, then any resistance to the change is dysfunctional.
 Source of rumours.
 Group conformity to unacceptable standards.

 1.9.5 Managing Informal Organisations.
 When Managing Organizations Managers
should be Guided by the Following
Principles;
 Compatibility Try to set organizational goals
that are compatible with those of the
members of the informal group
 Influence. Try to influence the informal group
members rather than forcing
 Togetherness. Try to work together with the
informal group members for the s not interests
of both the formal and the informal
organizations.

 1.9.6 Characteristics of Informal Organizations.
 Standards of behaviour. Just as formal groups develop laws, taboos
and beliefs about
what is right and wrong so does the informal group.

Pressure to conform. Informal groups apply pressure to members to
conform to group norms.

 Informal leadership. Informal groups have leaders who guide and

direct the members through persuasion and influence.

Status systems. Informal groups also display status differences.
Status is a differentiation of social position from associates. It is the
amount of prestige a person has and defines the person’s position in
terms of importance in the group. Status depends upon the following
factors:
 a) External factors- these are factors that the individual brings to the
organisation. Such as sex, education, age ethnicity and personality.

b) Internal factors- These are determined by the job one has e.g. job
title, pay, and work schedule.
  

EVOLUTION OF
ORGANIZATION THEORY


2.1 Introduction
In this lecture we shall trace the
development of organization theory from
the pre classical period to the present. We
shall discuss the classical theories then the
neo classical theories after which we shall
briefly touch on some modern theories and
principles of managing organizations

2.3 Pre-classical Period

 The evolution of organization can be traced from the following periods:


The Pyramids of Egypt
 The pyramids of Egypt could not have been completed without
sophisticated organization practices and structures of the modern
period.

The Chinese Empire
 The construction of the Great Wall of China could not have been
accomplished without the sophisticated administrative and
bureaucratic structures we know today.

The Catholic Church
 The Catholic Church has also practiced many elements of classical
theories for over two thousand years.
  
 The Roman Empire
 The extensive bureaucracy of the Roman Empire could not have been
maintained in such a form and for such a long time without the
application of a management theory that we know today.

2.4 The Classical Theories

The classical theories were developed in

three streams/approaches namely:
The Administrative theory
The theory of Bureaucracy
The Scientific Management Theory
 

 2.4.1. Administrative Theory:
 This theory was largely developed by Henri Fayol (1841
1925) who was a French industrialist. He described a
number of management principles that go towards
capturing
the entire flavor of the administrative theory of
management. Some of those principles
are:
 Division of work (or specialization): One should work
at activities in which he/she has comparatively higher
skills. This should lead to higher productivity.
 Authority and responsibility Authority is the right to
give orders. Each person should have an appropriate
authority to go with the given responsibility.
Responsibility is the task to be accomplished.
 Discipline There must be respect and obedience to the
rules and objectives of the
organization.

 Unity of Command To reduce confusion and
conflicts each member should
receive orders from and be responsible to only one
superior.
 Unity of direction An organization is effective when
members work together b
towards the same objective.
 Subordination of individual interest to general
interest The interests of one employee or group of
employees should not prevail over that of the
organization. Rather, the general interest must be
maintained as paramount.
 Remuneration of personnel should be fair -not
exploitative, and should reward good performance.
 Centralization - A good balance should be found
between centralization and decentralization.

 Scalar Chain-There is a scalar chain or hierarchy
dictated by the unity of command linking members
of the organization from the top to the bottom.
 Equity Kindliness and justice, largely based on
predetermined conventions, should prevail in the
organization.
 Stability of tenure of personnel Job security
should reward good performance.
 Initiative A manager who has initiative, and can get
others junior to him to do it, is far superior to the
one who does not have this ability.
 Esprit de corps “Unity is Strength” Superior
performance comes from working together; thus,
everyone in the organization should be encouraged
to work together and have a sense of belonging.
 Technical ability Technical ability predominates
lower down the ladder and management ability
higher up.

Fayol emphasized the importance of
planning, organizing commanding,
coordination and controlling in
organizations.
Fayol recommend rational selection of and
training of workers together with
professional training for managers.

 2.4.2 The Theory of Bureaucracy
 The theory of bureaucracy was developed by sociologists who took a
relatively scholarly descriptive point of view. The most famous of those
sociologists was Max Weber (1864 -1920) who was a German
Sociologist. He published most of his works towards the end of the
19th Century. Max Weber identified the following as the, main
characteristics of bureaucracy:
 Labor is divided so that the authority and responsibility of each member
is clearly defined.
 Offices or positions are organized in a hierarchy of authority resulting in a
chain of command.
 All organization’s members are to be selected on the basis of technical
qualifications through formal examinations or by virtue of training or
education.
 Officials are appointed not elected.
 Administrative officials work for salaries and are career people.
 The officials are separate from owners how
 The officials are subject to strict rules and controls regarding the conduct
of their official duties. Those rules are impersonal and uniformly
applied to all people and cases.

 2.4.3 Scientific Management Theory
 First developed by Fredrick W. Taylor (1856 -1915), a mechanical
engineer in the
United States, the Scientific Management can be defined as:
  
 The application of scientific method of study, analysis and
problem solving to organizational problems.
 Or
 A set of mechanisms or techniques for improving organizational
problems.

  
 Scientific Management focuses its unit of analysis on the
physical activities of work.
Scientific management deals with the relationship of a worker
and his or her work. Thus,
this lays emphasis on man-machine relationships with the
objective of improving
performance of routine, repetitive production tasks.
 Scientific management advocates for an empirical detailed study
of each job to determine
how it could be done most efficiently
 The basic assumptions of scientific management
theory are:
 Improved results in organizations will come from the
application of the
scientific methods of analysis to organizational
problems. In other words,
the scientific management approach holds that
scientific solutions to
problems of management of organizations are
superior to those of other
approaches.
 Scientific management focuses primarily on work
itself and not on the
particular person doing the work.
 Each worker is assumed to be a classical economic
man-interested in
maximizing his monetary income. The
 The basic principles of scientific management as
expounded by Fredrick W. Taylor are as follows:
 Develop a science for each element of man’s work in
order to maximize the
organizations output.
 Scientifically select and then train, teach and
develop the worker.
 Management should heartily cooperate with the
workers so as to ensure all the work is being done
in accordance with the principles of science.
 There is almost equal division of the work and
responsibility between management and the
workers. The management should take over all
work for which they are better fitted than the
workers, and the workers should do the work for
which they are better fitted.
Application of the piece rate
principle
 : This is the principle by which workers are paid
by piece rates on the basis of standards set by
motion and time studies rather than on other
basis. Piece rates are effective in motivating
workers.
 Tailor’s piece rate system was called the
differential piece rate system. Under this
system, workers were paid a low piece rate up
to a standard (a standard was based on a first
class man performing under average
conditions). At higher levels of output the
worker was paid a higher rate.
 Tailor’s recommendations were designed to
reduce the inefficiencies and the wastefulness
of the past through practicing scientific rather
than rule of thumb
 2.4.4. Comparison of the Classical Theories
 The theories were mainly developed during the early
part of the 20Th
century.
 The three streams were formed on similar
assumptions about organizations - organizations
as a structure of relationships of human beings
with goals, objectives, roles, activities, power etc
that exist when persons work together.
 Their main goal was to find out what needs to be
made to organization
structures and relationships to improve efficiency
in the organizations.
 They considered the environment to be either static
or to have an
insignificant role in organizational efficiency

 However the three approaches had the
following dissimilarities:
 
 They were developed by separate groups of writers
working totally
independently of each other:
 Bureaucracy developed mainly by sociologists who
generally took a
scholarly point of view.
 Administrative theory and scientific management
developed by writers who were practicing
managers; they were not merely content at
describing organizations; they prescribed practical
purposes for better organizational performances.
 Administrative theories focused on overall relatively
macro aspects of levels organizations. The
scientific management theory looked at the micro
aspects — the worker, and the foreman.
Bureaucracy also looked at the macro aspects of
 2.4.5 Evaluation of the Classical Theories
 The Administrative theory
 The principles of administration as postulated by
Henri Fayol fail to be universal truths.
 The principles lack scientific derivation and
verification.
 The administrative theory is power centered. It
is thus in philosophical conflict with those who
desire limited individualism.
 Administrative theory suffers from the
dysfunctions of bureaucracy such as
lion rigidity, impersonality, and excessive
categorization.
 Administrative theory suffers from superficiality,
oversimplification and lack of realism. It is
satisfied with theoretical rather than actual.

 However, as a theory of organization, the
Administrative theory is critical because:
 (i) It recognizes the need for:
 Specialization
 Unity of command
 Discipline
 Separation of individual and organization
interest.
 
 (ii) It also introduces essential principles that
even today lead to organization
efficiency.

The theory of bureaucracy

Most of the characteristics described by Max

Weber truly describe an ideal organization.
They described what should be rather than
what is. However, to the extent that
organizations aspire to achieve the
characteristics described by Max Weber,
their efficiency and effectiveness can be
maintained.
Some of the aspects envisaged by Weber,
however, have sometimes taken on a
negative meaning .e.g. being associated
with endless rules and red tape.

The Scientific Management
Theory

The basic problem with the scientific

management theory is that it assumed
man to be
purely an economic man interested only in
the satisfaction of his basic needs. His
rationality and motivation were purely
financial/materialistic. These assumptions
were not realistic and man was motivated
by more than his basic needs as later
proved by the
neo classists.

2.4.6 What Prescription did Each
Theory have on how to Best Structure
Organizations?
The Scientific Management Theory
Scientific way to do work
Scientific selection of personnel
Financial incentives
Separation of management and workers
 

The theory of Bureaucracy
Contribution to organization theory
well defined hierarchy of authority
A clear division of
A system of rules covering rights and duties
of each position
A system of procedures dealing with work
situation
Recommended impersonality of inter
personal relationship
Selection /promotion based on technical
competence.

Criticisms
Lack of empirical evidences
Assumed people are machines
Ignored practical situations

 2.4.7. What Prescriptions did each Theorist ‘have for, how
to Best Ensure Compliance — to ensure in other words
that each worker carried out the task to which he or
she is assigned?

Scientific Management Theory
 Standards
 Procedures
 Incentives

Administrative theory
 Discipline
 Unity of command

Bureaucracy
 Rules and procedures
 Hierarchy of authority

 2.4.8 What was the Environment of the Organizations that Theorist
Focused on.?

i.e. what influenced the theorists to make the type of recommendations that
they made.
 The tasks facing workers then were relatively routine and repetitive
 Efficiency rather than creativity was the rule consequently, the theorists were
justified in making the type of recommendations that they made about how to
perform those tasks.
  
 What was it about the environment of the organizations each theorist focused on
that influenced the prescriptions for how to structure organizations and gain
compliance?
  
 During the time, the organizations environments were relatively simple and
unchanging.
 Technology was generally static over long periods
 Political environment was also stable
 Equality and democratic ideas were developing

This type of environment motivated organization theorists to come up with the
type of proposals they came up with on how to structure organizations and to
motivate workers.

2.5. The Neo Classical
Theories

The neo classical theories are based on the

classical theories. They seek to address
the shortcomings of the classical theories.
A4 few of the neo classical theories are
discussed here below.

 2.5.1. The Hawthorne Experiments
 The experiments were carried out between 1927
and 1933 at the Chicago Hawthorne plant of
the Western Electric Company: Four studies
were carried out namely:

a) The illumination studies
 These studies were expected to determine the
relationship between the level of illumination
and worker’s productivity. It was expected that
worker’s productivity would increase with
increasing levels of illumination. The studies
failed to prove any relationship between
worker’s productivity and level of illumination

b) The Relay Assembly Test Room
Studies
These studies were carried out to determine
the relationship between worker’s
productivity and improved benefits and
working conditions. The studies found out
that there was no cause - and - effect
relationship between working conditions
and output. Rather, there were other
factors that affected worker’s output such
as his/her attitudes and supervisor
behavior
c) The Interviewing Program
A group of employees were interviewed to
learn more about their opinions with
respect to their work, working conditions
and supervision. The workers suggested
that:

Psychological factors help determine

whether a worker is satisfied or dissatisfied
in any particular work situation
The person’s need for self-actualization
determines his/her satisfaction in the work.
A person’s work group and his relationship
to it, also determines his/her productivity
d) The Bank Wiring Room Studies
This study was expected to study the effect
of group influence on workers productivity.
The researchers found out that an informal
grouping and relationship was a critical
factor in the workers’ productivity. The
informal group determined the group’s
productivity, and functioned as a
protective mechanism (served both for
internal and external purposes).

The Hawthorne Experiments concluded that:
An industrial organization is a socio technical
system. The socio part is the human
aspects that need to be taken care of in
order to increase workers’ productivity and
the technical system are the physical
aspects that also need to be improved.
Employee attitudes and morale are also
important as determinants of productivity.
Other factors include worker’s personality
and supervisor’s behavior. These two also
affect worker’s altitude and morale.
A worker’s social group has a prevailing
effect on his or her altitude and
Criticisms of the Hawthorne
studies

The philosophical basis

By emphasizing the social needs of human
being rather than the economic needs and
self-interest, these studies conflict the
philosophical basis of economic theory.
Methodology
The study methodology lacks the basis for
generalizations.
Findings
The cause - and - effect relationship
conclusions lack general support and
scientific verifiability.

Contribution

The Hawthorne Studies have however made
the following contribution to Organization
theory
 As a basis for organization theory Research, the
Experiments were important. They were some
of the earliest scientific studies in human
behavior.
 Their finding on the importance of informal
groups is also a key to organization theory.
 Their emphasis on employee altitude towards
work as an additional to other factors was a
breakthrough in organization theory.
 

 2.5.2 Mary Parker Follet
 She was a philosopher and political scientist. She
was also a social worker among the poor in Boston.
She proposed the following principles:
 Emphasized the importance of subordinating
individual freedom to that of the group
 Stressed the importance of democracy in decision
making -by involving all in order to find a solution.
Recommended the use of power with rather than
power over. Observed that Power cannot be
delegated but authority can. Power is the capacity
to get things done. Authority is the right to give
orders. Power should be exercised with rather than
over. Power over is dominance or control, based on
force. Power with is a jointly developed power. She
emphasized that power is a basic to management
especially when used with.
 Defined conflict as the difference in opinion or
interests. She emphasized that conflict cannot be
avoided, and therefore must be used to manage
organizations. Noted that there are three ways of
managing conflict:
 Dominance - one side wins over the other
 Compromise - each side gains something to settle
the conflict; also
each side loses something. In both dominance and
compromise, the
basic causes of conflict are not settled. Follet
recommends a third way.
 Integration of desires. In this way a solution that
fully meets the goals
of each party in a dispute is found. Both parties get
what they want.
Neither party gives up anything. Integration lets the
parties creatively
discover alternatives that satisfy both parties in
2.53 Chester Barnard
Barnard was writing in the 1 930s
Was the President of New Jersey Bill
Telephone Company
Contributed to organization theory in three
areas:
the importance of individual behavior
theory of compliance
theory of organization structure
 
 

1. The importance of the
individual

 Bernard was the first person after the

Hawthorne studies to emphasize the
importance and variability of the individual in
the work setting.
 He emphasized that an essential element in
organizations is the willingness of persons to
contribute their individual effort to the
organization.
 The individual is always the basic strategic
factor in organizations.
 Consequently the individual regardless of his
history or his obligations must be induced to
cooperate or there cannot be cooperation.

2. Barnard’s Theory of
Compliance

 Barnard’s theory of compliance consisted of four basic elements.

 the willingness to cooperate is a basic element of the individual
in the organization
 in complying, the individual surrenders his personal preferences
i.e. surrender or foregoes other preferences in order to comply
in an organization.
 An individual is only willing to comply if he is sufficiently
induced.
 The level/quantity of inducements determines his degree of
compliance.
  
 Barnard noted that material incentives by themselves are not
enough.
Other incentives include:
 Opportunities for distinction
 Prestige
 Personal power
 Coercion (i.e. sometimes force is necessary to obtain
compliance).

3. Barnard’s theory of
organization structure

Emphasized that the organization was a

structure of decision makers
Stressed the importance of communication
in organizations
Stressed the role and importance of informal
organizations in communication and
cohesiveness
He was also one of the first organization
theorists to take a system’s view of
organizations.

 2.5.4 The basic Elements of the Neo-
Classical Theories were:
 Individual needs. Recognizes the existence of,
and the variability of individual needs, and
characteristics e.g. feeling, emotions, and
perceptions.
 Work Groups- recognizes the existence and the
importance of informal groups in
organizations.
 Participatory Management - emphasizes the
need of involving employees in decision
making especially on things that affect them.

2.6. The Information
Processing Theory

The Information Processing theory views

organizations as open systems which face
two basic situations
Environmental threats and uncertainties
Task uncertainty- this is the difference
between the amount of
information already possessed by the
organization and the amount of
information required to perform the task.
 
i.e. Task uncertainty Information required to
perform the task MINUS the information
already possessed by the organization.

 
 The organization must have the mechanism and be
structured in such a way
that it can diagnose the information it has, and the
information required. In
particular the organization must be able to gather,
interpret, and use the
appropriate information in order to reduce this task
uncertainty
 The second assumption of the information
processing theory is that given
the various sources of uncertainty a basic function
of organization structure
is to create the most appropriate configuration of
work units (as well as the
linkages between them) to facilitate the effective
collection, processing and
set distribution of information.

The third assumption of the theory deals
with the sub systems or the various ma
departments of an organization. Because
the sub systems have different degrees of
differentiation (that is to say they have
different time perspectives, goals,
technology etc) the important question is
not what the over all organization should
be but rather what are the optimal
structures for the different sub units within
the organization.

 The information processing theory views the organization
as having
 the tasks of the organization vary in their degrees of their
uncertainty
 as work related uncertainty increases, so does the need
for increased amount of information and thus the need
for increased information processing capacity
 an organization will be more effective when there is a
match
between the information processing requirements
facing the organization and the information processing
capacity of the organization
 if an organization ( or sub units) face different conditions
over time
more effective units will adapt their structures to meet
the changed
a way information requirements

2.7 The Contingency Theories

 The contingency theories relate to how the organization

structure adjusts to fit with both
the internal environment such as work technology and
the external environment such as given economic or
political legal.

Contingency means that one thing depends upon
another thing or that one characteristic
depends upon another characteristic. What works in
one setting may not work in another setting. There are
no universal principles that apply to every organization.
There is no one
best way. Contingency theory means it depends. The
most efficient organization structure
various may be contingent upon the size, technology,
strategy and since organizations are open different
systems, its environment. These contingency factors
are discussed in chapters 6 and 7.
 


The Population- Ecology theory can be explained by the following
characteristics:

 The carrying capacity of the environment is limited. An excess population

of organizations leads to congestion and subsequently to the survival
of only those organizations successful in creating a niche in the
market place.
 Like biological elements organizations are doomed to die unless they
meet the environmental test of fitness. Environmental forces select
out the most appropriate structural forms for survival from among
populations of
creased organizations on the basis of fit between structural attributes
and environmental characteristics.
 The population- ecology theory shifts away from preoccupation with
organization at the individual level towards population level. It is not
the fitness of any single organization that is of interest. It is the group
or groups of organizations and they may be influenced by actions and
events with which they have no obvious or direct links
 Management has no effect in deciding whether or not the organization
will survive or die. Environmental factors solely determine the survival
of any
organization.

 Criticism of the Population Ecology Theory
 The Population- Ecology theory is not without
problems. The following has been cited as the
major weaknesses of the theory:
 The claim that the organizations’ existence and
survival is determined by the environments’
carrying capacity means that the theory
cannot be used to predict about the future.
This is because the concept of environmental
carrying capacity is immeasurable and cannot
be estimated. It can only be measured on ex
post or retrospective basis. Thus the theory
cannot be used to make organizations adapt
to their environment and therefore ensure
survival. Thus as an organization theory it is
therefore inappropriate.

 The concept of fitness is not clearly defined by the theory.
In other words it is insufficient to state that only those
organizations that environment determines as fit
survive. To do so would be tautological. A more
meaningful and causal pattern must be presented for a
theory to be acceptable.
 To claim that organizations are like biological organisms
also ignores the fact that organizations are created by
men- a biological organism- to meet its objective. To
claim that a biological organisms, man, can create a
biological organism, an organization, endows man with
supernatural powers.
 The population ecology theory also ignores the role of
managerial decision makers. To assume or argue that
managers should be passive, helpless elements
completely dependent on environmental forces is to
denigrate the important role managers can play in
determining the success or failure of an organization.
 

 An organizational goal is a desired state of affairs which the
organization attempts to realize. It is that future state of
affairs which the organization as a collectivity is trying to
bring about. It can also be defined as a state of affairs or
situations which does not exist at present but is intended to
be brought into existence in the future by the activities of the
organization. A goal or purpose is an unrealized state or
condition that the members deem desirable.

All organizations are established for a purpose. This purpose
may be referred to as a goal or mission. Different parts of the
organization establish their own goals and objectives to help
them meet the overall goal, mission or purpose of the
organization.
The overall goal for an organization is often called the mission
the organization’s reason for existence. The mission describes
the organization’s vision, its shared values and beliefs, and its
reason for being.

The mission is sometimes called the official goals, which are
the formally stated definition of business scope and outcomes,
the organization is trying to achieve. Official goal statements
typically define business operations and they may focus on
values,
 Goals are Ideal States
 Goals represent targets established at certain points in time
therefore it is inevitable that actual performance of
organisation tends to be less consistent and less perfect than
anticipated.

Sometimes the goals may be too low, harmful or
otherwise misplaced.
 Thus it would be meaningless to evaluate organisations in terms
of effectiveness using such types of goals.

Most organizations are multifunctional and they
generally seek to accomplish
several different goals at the same time.
 The realisation of one goal may inhibit the attainment of
another. For instance, a high rate pr of return may be well
achieved at the expense of long-term organizational growth.
Thus, effectiveness in the attainment of one goal may be
inversely related to effectiveness in b) attainment of another.
  

 Assessment of effectiveness on the basis
of goal attainment depends upon the
extent to which goals are measurable.
 While some goals are easily measurable e.g.
sales, number of production units, profitability,
many organisations do not have such
identifiable objectives. Service organisations
such as social welfare agencies and voluntary
associations are examples of organisations
with non-measurable goals.

Interpretation of some goals is also
subject to wide differences of
interpretation
Despite such problems however, the goal
attainment remain an important measure of
(organizational effectiveness.

3.4. Official and Operative
Goals

 a) Official goals refer to:

  
 The formally stated outcomes that the organisation states it is trying to
achieve.
 What the organization should be doing, the reason it exists and the
values that underlie its existence
 Aims normally written down in a policy manual in a charter or in the
annual
report.
 Goals emphasised in public pronouncements by the top officials of the
organizations.
 Goals that describe a value system.
 Goals that serve the purpose of legitimising the organisation to the
various
parties such as customers, taxpayers, suppliers and employees.

Official goals are therefore the general purposes of the organization
as put forth in the charter, annual reports, public statements by key
executives, and other authoritative
pronouncements.

 b) Operative goals on the other hand represent the real aims of the
organisation. They:
 Designate the end results sought through the actual operating policies of

the organisation.
 Tell what the organisation is actually trying to do regardless of what the
official goals say are the aims.
 Describe desired operational activities and are often concerned with the
short run
  
 Operative goals designate the end results sought through the actual
operating procedures of the organization and explain what the
organization is actually trying to do. Operative
goals describe specific measurable outcomes and are often concerned
with the short run. Operative goals represent actual goals, while
official goals represent stated goals.
Operative goals pertain to the primary tasks an organization must
perform. These goals concern overall performance, boundary
spanning, and maintenance, adaptation, and production activities
  

3.5 Types of Goals

There are many ways of classifying goals,

one way, discussed by Perrow, classifies
goals into five categories’ according to
“whose point of view is being recognized”,
that of society, the customer, the investor,
the top executive or others. Thus
organizations may be said to have:
Societal goals: The point of view recognized
here is that of society in general. Societal
‘goals relate to the goods produced and
services provided by an organization to
enhance general welfare, maintain order,
and generate and maintain cultural values

 Output goals: The point of view being recognized
here is that of the
public for which goods are produced or services
provided. Examples would be the creation of
consumer products, business services health care,
and education programs.
 System goals: The point of view being recognized
here is that of the organization itself and the
manner in which it functions, independent of the
goods it produces or services it renders. Examples
would be the goals of growth, stability, and profit
and market share.
 Product Goals: The point of view being recognized
here is that of the actual good or service which is
produced or provided. Product goals relate to the
characteristics (quality, styling, uniqueness,
variety) of the goods and services in question.

 Derived Goals: The point of view being
recognized here is that of the top
management of an organization, and what it
chooses to do with the power and resources it
accumulates while pursuing other goals. For
example top management may use its power
and wealth to further certain political aims, or
to support the arts or higher education, or to
contribute to the personal development of its
employees.
 

You could also classify goals to help you
catalogue what you know about goals and the
goals role they play in organizational life. One
scheme of classifying goals was proposed by
R.C. Davis in his classic. The Fundamentals of
Top Management.
Primary Objectives

 These are objectives that are tied directly to satisfying the

needs and desires of the
organization’s primary client group (primary
beneficiaries). Whatever type of
organization is considered, it is basically established to
provide goods and services to some special group that
may be called the primary client group.
 
 This primary objective is of paramount importance to the
organization because it by establishes the base for
defining other supporting objectives by setting the basic
purpose
of the organization. Also it can be a determining
influence on the structure and process used in the
organization. It sets the stage for an organization’s
operations because the
process, technology, and even personnel are selected
on the basis of what is required to produce and
distribute products and services that will satisfy primary
client needs and desires.

 Secondary Objectives
 All organizations must satisfy the needs and desires
of a variety of secondary client
groups, and these needs and desires become the
basis for determining the organization’s
secondary objectives. For example the
organization’s employees expect certain utility
from the organization in return for their
contribution to it. This utility can take many forms,
wages and salaries, pleasant working conditions,
and a host of fringe benefits, are
but a few examples. Whatever form they take,
however, secondary goals are the personal goals of
secondary client groups that can be satisfied only
if the organization concentrates
on providing utility that the group desires.

Short-term goals

Are those that the organization hopes to
accomplish within a year. Accounting
cycles are often used as the time frames
for these short term goals. The
organization then strives to attain this type
of goal within the bounds of its accounting
cycle.

Long-term goals
 Are those that cannot be accomplished within the time
frame of year or so. A few years ago, long-term ranged
from five to ten years. Now that period has been
prolonged to range up to twenty years. The reason for
this is that technology has greatly increased
management’s ability to forecast. Whatever its
definition, the long-term objective of an organization
will provide the overall direction for it for a considerable
number of years. It is important to keep the long-term
objective in mind when setting short term objectives so
that their accomplishment can directly contribute to the
attainment of long term goals. At the same time, it is
important for management to review the long term
goals each year in order to reaffirm or alter them as the
base for the future direction of the organization,
whether the organization deserves to be in a state of
equilibrium or improvement.

Equilibrium Objectives

 Those organizations that wish to remain in or

achieve a steady state will develop what might be
termed equilibrium objectives. These objectives
are such that their attainment would allow the
organization to preserve its relative share of the
market and its relative share of resources over
time. Basically, an organization that adopts
equilibrium objectives makes a conscious decision
also to adopt the adaptation strategy for staying in
tune with its macro environment. This means that
it will monitor this environment with a view to
making internal changes that will allow it to remain
in consonance with outside pressures. This means
that the organization is in a reactionary mode in
that it is reluctant to adopt objectives that would
require shaping or molding the macro
environment.

Improvement Objectives

The desire to improve operations and to

accomplish projects more efficiently is one
of the universal goals of most
organizations. So for reasons of efficiency,
conservation and tradition, today’s
organization counts the improvement
objective among its goals.
 

Explicit Objectives

Organizations frequently set formal, official

objectives that are printed and circulated
primarily to those outside the organization
(e.g. owners, government, or the media).
These might appear in the annual reports,
in press releases, or in other organization
pronouncements. These objectives may
not even be the actual objectives of the
organization. They may be formally stated
only for public - relations purposes.

Implicit Objectives

 The actual or unofficial objectives that the organization

works toward in reality might be to the different from
the formally stated. This might occur for several
reasons.
 Lower - level managers may not be aware of explicit
objectives and may for the therefore formulate their
own objectives.
 Explicit objectives may be deemed unrealistic or
unattainable, and less
ambitious ones may be implicitly set.
 Personal objectives of managers may cloud or even
negate formal objectives.
 
 For whatever reasons, it is important to note that formally
stated objectives may not be the actual objectives that
guide behavior in organizations.


3.6 Functions of
Organizational Goals

 Viewed in broad perspective organizational

goals perform several important functions
which vary according to time and
circumstances among other things.
Organizational goals perform the following
functions:
 Guidelines for action. By describing future
desired results, goals serve as
guidelines for action, directing and channeling
efforts and activities of
organizational participants. In this regard,
goals provide focus, and direction for
organizational activity by prescribing what
should be done.

 “Constraints” To the extent that goals prescribe what “should be” done,
they
also serve to prescribe what should not be done. An Organization that
commits
itself to certain goals reduces the amount of discretion it has, to
pursue other outcomes. For example, an organization that commits
itself to maximizing immediate stock holders’ dividends in effect
reduces, the amount of financial resources available for expanding
production capacity or investing in research and development of
future products, Thus, by their nature, goals function to constrain the
activities of organizational participants.
 Source of legitimacy Goals also provide a source of legitimacy for an
organization by justifying its activities and indeed its existence to such
groups as customers, politicians, employees, stockholders and society
at large. Prominent examples of organizations and their stated official
goals that provide legitimacy include:
Hospitals- provision of medical services aimed at cure, and
prevention of
diseases.
 Prisons and mental hospitals therapy and rehabilitation
 Churches- divine worship and spiritual salvation
 Universities - teaching, research and public service

 Standards of performance: To the extent that
goals are clearly stated and understood they
offer direct standards for evaluating an
organization’s performance. Once organization
establishes goals in such quantifiable areas as
sales, market size, or profit, the degree to
which they have been obtained should be
easily verifiable.
 Source of motivation: The goals of an
organization can serve as an important source
of employee’s motivation and identification. In
fact organizational goals give incentives to
members. This phenomenon is clearest in
organizations that offer their members
bonuses for achieving specified levels of sales,
 Rationale for organizing Organizational goals
provide a basis for organizations design;
organizational goals and organizational
structure interact in
that the actions necessary for goal
accomplishment may impose unavoidable
restrictions on employees activities and
resource initialization patterns, necessitating
implementation of a variety of organizations
design elements; communication patterns,
control mechanisms departmental structures
etc. for instance, the more the goals of a
functionally structured organization call for
diversification, the greater will be the need to
evaluate alternative structural arrangement
such as product or customer
departmentalization.
3.7 Goal Formulation

 3.7.1 Responsibility for Goal Setting

 The process of setting organizational goals should
ideally begin at the top levels of the organization in
order to set the basic direction for an entire
organization. However, even though the ultimate
responsibility for goal setting rests with the top
management group, it
is important that they gather sufficient input from
within and without the organization to
make intelligent decisions about the goals that the
organization on will seek. First-line
managers and production workers can add
valuable input to production oriented goals,
and the same can be said for sales managers and
the sales force about establishing sales
goals. These members are most familiar with the
conditions surrounding the process of
goal achievement.

 3.7.2 Determinants of Organization Goals
 The following are some of the major factors that
organizations must consider when setting
goals:
 a) Consumer needs:
 All organization exist to serve some consumer
groups (primary beneficiaries) so they must
carefully identify those people they will
attempt to serve. A clear understanding of
these consumer needs is necessary for a
management group to establish primary
organization goals. In addition, the
organization should examine the needs of
secondary beneficiary groups. In this way
there can be an integrated set of goals aimed
at satisfying primary consumer groups that
also takes into account the needs of the
secondary groups such as government,

b Technology:
Organizations tend to change their goals to
accommodate technological advances. The
classic example is this; once it became
generally available, organizations began to
change goals in accordance with the
computer. Production and sales quotas
were revised upward as technology made
more rapid and efficient production and
distribution possible. Such actions were
tied to goals affected by the availability of
the computer and its capability of
increasing organizational efficiency.
 c. Resources:
 Having the most critical aspects of goal setting is
recognizing the role of resources. It is not practical
for instance to set objectives that require more
resources than the organization can reasonably
expect to acquire.

d. Management philosophy:
 Because top management is ultimately respnsib1e
for establishing the organization’s goals, the values
that this group holds will exert a major influence on
the statement of goals. This set of values guides all
management’s decision making, and it is
recognized here that goal setting is a major choice
area. The goals of an organization can even be
taken as a reflection of the values that the
management group seeks for the organization
since goals represent a desired end-state of the
organization.
e. Practices of others:
Often an organization sets its goals in
response to what others in its industry are
doing. For example, when a competitor
brings out a new product, others in the
industry must take this into account when
setting sales and production goals for the
coming period. For example, in order to
attract students as well as faculty
universities try to bring out new courses
and majors in response to the practices of
other colleges and universities. In fact, the
goals of others can actually determine the
goals of an organization.
 f. Mandates
 Occasionally, organizations are mandated, in effect,
to set a particular goal. This can be demonstrated
in the case of the Environmental Protection Agency
(EPA) of the U.S. Government. When setting goals
that can affect the environment, organizations
must abide by the rules and regulations of the EPA.
Environmental impact studies
must be conducted to measure the projected effect
of certain construction projects. For example in
cases such as housing developments, the
developer must establish a and goal to protect the
surrounding environment. Manufacturers are
required to observe certain protection standards.
Mandates then can have a significant impact on
the
entire process of goal setting and measurement.

 3.7.3 Goal Setting Techniques
 Officially, organizations often have a formal and
explicit means for establishing goals,
whether by a vote of the shareholders or the board
of directors or by some other means.
In actuality, the setting of goals or objectives is
often quite different from the formal means that
the organization espouses. In reality there are
many factors that come into play in establishing
goals; internal policies frequently exert a great
influence on the
process. A strong group or an individual in a key
place can exert an inordinate amount of influence
on setting goals and also on determining their
priority once they have been it is
selected. The following sections briefly discuss the
main techniques that can be used to
establish organizational goals and the priority
placed on them.

 Conflict Setting goals by conflict can create the
type of discussions that result in the
development of an effective base for conflict
resolution. This means that conflict can
provide the impetus for the type of interaction
that brings out the factors affecting the goals
of all parties. Without the conflict one of the
parties might set a good goal that would
require the other(s) to set either sub-optimal
or unreasonable goals. Conflict, because it
does focus attention on its own resolutions,
points out the way to effective goal setting.
Unchecked, conflict can be potentially
disastrous to an organization, and yet a
healthy level of conflict can bring pressure on
the setting of realistic goals. A management
group can use it as a process to bring about
the establishment of a sound goal program for
the organization.
 Compromises: It is not unusual for managers
to set goals that are quite ambitious in their
initial form in order to establish a base for
compromise as well as for an increased share
of resources. Every organization has its own
set of rules for such practices, and these rules
of the game play an important role in setting
courses of action for the organization.
Managers who expect to use compromise set a
given level of goal in the hope of bargaining
away some of the advantages that might be
associated with this level for other benefits.
For example, a college administrator might set
the goal for his or her unit’s share of capital
funds at an optimistic level in the hope of
bargaining with superiors for a larger share of
current expense money. In other words, there
is a deliberate attempt to establish a base
from which to retreat in an effort to gain an
 Cooptation: When an organization or a group of people absorb
another, the act is termed cooptation. As mentioned earlier,
this can be seen when a company becomes a member of a
larger organization. It is customary for its goals to be set in
accordance with guidelines furnished by the parent
organization. This means that the goals of the parent will
determine to a large extent which goals of the members will
fit into the overall, goal structure of the conglomerate. The
goals of an organization itself can be affected by the practices
of its members. The management of the conglomerate must
take the conditions and objectives of all its members into
account when setting the goals of the entire organizations.
Therefore cooptation can be viewed as a two-edged effect,
with influence
flowing from the top and the bottom of the organization.
 Coalitions
While discussing the concept of organizational goals, it must be made
clear that
organizations as such cannot have goals except in a purely
metaphorical or figurative
sense. Attributing such things as goals and needs to organizations
place us in a position
of treating organizations as having anthropomorphic (human)
characteristics it does not
possess. In reality, organizations are mental abstractions, incapable of
having an
existence and behavior independent of the behavior of their members.
In other words,
people have goals, organizations do not. At the same time, the
opposite extreme of
equating the goals of an organization with the sum total of the
purposes and needs of its
individual members is also unacceptable.
 3.7.4 Organizational Decision Making
 Bounded Rationality
 The classical economic theory portrays organizational decision makers as
maximizing intended outcomes based on complete information. This
representation flows from two fundamental assumptions upon which
classical economic analysis rests. The first assumption is that
organizations seek to maximize expected utility or profits above all
else. The second assumption is that human beings are substantively
rational. The realism and applicability of these assumptions has been
challenged by organizational theorists. One of them is the Nobel
Laureate, Herbert A. Simon who advances the view that the actual
choice or decision to follow a course of action, far from being
substantively rational, is limited by the finite cognitive capacity and
affective attributes of the individuals involved as well as by
environmental constraints over which there is virtually
 no control. Thus, individuals make decisions under conditions of
bounded (or limited) rationality.
 bounded.

Satisficing:
This word is a Scottish word meaning satisfying. Simon argues
that once decision makers have isolated a limited set of
variables, they again deviate from the demands of rationality
by generally selecting the first course of action that is deemed
“satisfactory” or good enough rather than searching further
for the optimum source. That is rather than examine all
possible alternatives and attempt to order them according to a
well organized and stable hierarchy or preferences, they
generally settle for the first satisfactory alternative that
presents itself. Examples of statisficing criteria include
“reasonable share of market” “adequate profit” “fair price”
and “acceptable rate of return”.

 Incrementalism:
Charles E. Lindblom (1959) contends that in many
organizations, goals are not necessarily either stabilized or
agreed upon prior to the consideration of alternatives. Rather,
there is an ever ending series of attacks on the issues at hand
through repeated sequential or incremental analysis. Lindblom
depicts managers as risk avoiders who prefer to wrestle with
problems and seize opportunities as they emerge, rather than
formulate goals at the outset of a comprehensive search
process. Thus managers bumble along, or “muddle through”
without even attempting to survey all possible alternatives for
achieving superior performance.

A course of action is selected and the consequences are
evaluated as they develop, becoming the focus of subsequent
incremental analysis.

 Garbage Can Model
 March and Olsen (1972) challenge both the preexistence of goals to direct organizational
choices and the orderliness of choice processes. They claim decisions are an outcome of
four partially independent streams; a stream of problems, a stream of potential solutions,
a stream of participants, and a stream of choice opportunities. Likening organizations to
irrational garbage cans into which. various participants have poured miscellaneous
problems and solutions, they view organizations as “organized anarchies” the no clear
or consistent idea of what they are trying to do, how they are supposed to do it or who is
to decide. Decisions are only made if a problem (for example declining sales), a solution
decision (for example a new product), the relevant participants (for example annual sales
convention) simultaneously intersect.

The Garbage Can Model emphasizes the impact of chance and timing in determining
organizational choices, and thus reflects reality.


 Means-Ends Chain
 Once specific courses of action are chosen for attaining agreed upon goals, subsequent
decisions must be made to complete what is called the means-ends chain or hierarchy.
That is, given the limited or bounded rationality of individual decision markets, and the
fact that both goals and means at the highest level of an organization are often both
complex and abstract, it becomes necessary to divide ultimate goals into sub goals for
participants at lower organizational levels. In other words, what are means intended to
contribute to the accomplishment of ends articulated at the highest level become ends in
themselves for individuals at the second level of organizations. These ends in turn are
translated into specific means and are parceled out to people at the third level who treat what
are means for the second level as ends of themselves. Though the elaboration of
chains, non-operational organizational chains, non-operational organizational goals are
eventually transformed into very specific routines of behavior for people at the lowest
level.



3.8. Measuring Goal
Efficiency and Effectiveness

 3.8.1. Organizational Efficiency is generally defined as the

ratio of an organisation’s output (products or services) to its
inputs (labour, capital, raw materials.)

In economic terms, the concept of efficiency can be
formulated as an optimisation problem i.e. what is the least
cost combination of inputs that will produce a given level of
outputs.
 In normative terms, an organization is judged efficient if when
compared to similar organisations its outputs (benefit
received) are relatively high in comparison to its inputs (cost).
Thus if two companies making the same product finish the
fiscal year with equal production levels but one attained the
same level with fewer invested resources than the other, that
company is said to be more efficient. This is so because it
attained the same level of outputs with fewer inputs

 3.8.2 Organisational Effectiveness- This is a
measure of how well an organisation has achieved
its goal. The greater the extent to which an
organisation’s goals are met or surpassed, the
greater its effectiveness.

3.8.3. Models of Measuring Organizational
Efficiency and Effectiveness
 There are four models or approaches used to
measure an organization’s efficiency and
effectiveness. These models are as explained
below:

 Systems Resource Model of Measuring Organizational
Effectiveness
 In the systems resource model organisations are viewed as being
involved in a bargaining relationship with their surrounding, importing
various scarce resources (for example physical facilities, ideas, raw
materials, personnel, funds, e.t.c) to be returned to the same
environment in the form of products and services (outputs).

An organisation’s long- run success and sustainability depends upon
its ability to establish and maintain a favourable input- output ratio.
The procurement and the transformation of inputs to outputs and their
subsequent distribution to the external environment is therefore the
frame of reference of measuring organisational effectiveness.
Accordingly, the systems resource model proposes that an
organisation is most effective when it maximises its bargaining
position and optimises its resource procurement.

 Shortcomings of the systems resource model for
evaluating organisational effectiveness and efficiency
 While the systems resource model takes into account that
organisations are dependent on their environment for their
sustainability, it provides little or no guidance as to what
constitutes the optimum exploitation of resources. Thus,
without some optimisation criterion, the model is difficult to
operationalize i.e. with this approach, we are left with
unanswered questions “how does one know when a system
has reached a point of optimal input exploitation.”
 The systems resource model also fails to provide guidance in
determining which scarce and valued resources are relevant
as the basis of determining the organisational effectiveness.
Without reference to specific output goals, the definition of
resource becomes ambiguous.

Internal Process Approach

 In this approach, effectiveness is measured as internal organizational health and

efficiency. An effective organization has a smooth well - oiled internal process.
Employees are happy and satisfied. Departmental activities mesh with one
another to ensure high productivity. The following are the indicators of an
effective organization as seen from an internal process approach:
 Strong corporate culture and positive work climate
 Team spirit, group loyalty and teamwork
 Confidence, trust, and communication between workers and management
 Decision making near sources of information regardless of where those sources are
on the organization chart
 Undistorted horizontal and vertical communication; sharing of relevant facts and
feelings
 Rewards to managers for performance, growth, and development of subordinates
and for creating an effective working group
 Interaction between the organization and its parts with conflicts that occurs over
projects resolved in the interests of the organization

Shortcomings of this
Approach

 Does not consider the external environment and it ignores the

shareholders and other external stakeholders. Further the
internal process approach has been faulted for being
subjective because many of its aspects are not quantifiable.

Usefulness of the Approach
 Happy committed actively involved and satisfied employees are
appropriate measures of efficiency and effectiveness as it
would be difficult to achieve efficiency without satisfied staff
 Keeping staff happy is the key to long term success of a
company
 The idea of a positive corporate culture is also part of this
approach and this also leads to corporate efficiency

 c) Stakeholder approach
 In this approach efficiency is measured from the perspective of
the organizational stakeholders. A stakeholder is any group
within or outside an organization that has a stake in the
-organization’s performance. Creditors, suppliers, employees,
and owners are all stakeholders. Each stakeholder will have a
different criterion of effectiveness because it has a different
interest in the organization. Each stakeholder group has to be
surveyed to learn whether or not the organization performs
well from its viewpoint. The following table shows each
stakeholder and its criterion;


  

 Table 2: Stakeholder and its criterion

Stakeholder Effectiveness Criteria
  
 Owners Financial return
 Employees Work satisfaction, pay
 Customers Quality goods and services
 Creditors Creditworthiness
 Community Contribution to community affairs
 Suppliers Satisfactory transactions
 Government Obedience to laws tax payment
  

Shortcomings of using the
stakeholder approach

This approach is complicated as it seeks to

satisfy many stakeholders at once
It also ignores the major stakeholders
It is also a subjective
Business organizations would also find it
difficult to simultaneously fulfill the
demands of all groups
 

Usefulness of the stakeholder
approach

 It takes a broad view of effectiveness and examines factors in the

environment as well as within the organization
 It includes the social aspects which are ignored by the other approaches.
 The approach further handles several criteria simultaneously and on that

acknowledges that there is no single measure of effectiveness.

 The approach is also gaining popularity based on the view that
effectiveness is a complex, multidimensional concept that has no
single measure
 Recent research has also shown that the assessment of multiple
stakeholder
groups is an accurate reflection of effectiveness.
 Moreover research shows that firms really do care about their reputation
status
and actually do attempt to shape stakeholders’ assessment of their
performance.

 d) Goal approach
 This approach consists of identifying an organization’s
output goals and assessing how well the organization
has attained those goals. The main advantages of this
method are the following;
 Organizations are established to achieve goals
 All organizations have goals

The main disadvantages are
 Multiplicity of goals
 Subjectivity of goal measurement criteria
 

ORGANIZATION AS A SYSTEM

 
4.1 Introduction
In this lecture we shall define a system and
discuss the importance of looking at
organizations as open or closed systems.
We shall also discuss the disadvantages of
looking at organization as closed or open
systems.
 

4.3 Definition of a System

 A system is an organised or complex whole, an assemblage or combination of

things or
parts performing as a complex or unitary whole.

This definition conveys three very important ideas:
 The first concept is that of interdependence. That is to say the parts that make
up a system are interdependent i.e. if change occurs in one part or set of parts,
it affects all other parts. This effect on each part or set of parts in a system may
be direct or indirect. The second concept is that of holism. That is to say, the
system should be considered as a functioning whole. Changes in parts of the
system and in the functioning of the elements of the system should be
considered from the standpoint of the systems overall performance.

Finally is the concept of synergism. This refers to the fact that the interactive
effects of the parts of the system working together create an effect greater than
the effect of the parts acting separately. This means that, as each part performs
its role within the system it enhances the performance of other parts and hence
the total performance of the system.

 The system is capable of growth.
 It is also capable of receiving inputs
 It is also capable of producing outputs.
 It is a goal searching system. (In fact also multi goal seeking).
 It consists of both abstract and concrete subsystems.
 It also a dynamic system.

The general subsystems of an organisation system are:
 Production subsystems
 Boundary spanning subsystem
 Maintenance subsystem.
 Management subsystem.
 Adaptation subsystem

4.4. What are Subsystems?

 Subsystems are a group of functioning elements within a larger system. They are in fact
systems within a larger system. The determination of subsystems depends on the desired level of abstraction at
a given time for a desired type of analysis. If we are concerned
with analysing the University Of Nairobi as a system, we can break it into colleges as subsystems. If we want to
analyse the College of Humanities as a system, we can break it
into faculties and consider them as subsystems and so on. Thus, all systems can be considered as subsystems
and every sub system can be considered as a system depending on the level of analysis desired. In the case of
organisations, we are interested in looking
at an organisation as a system composed of subsystems (departments).
 System
 subsystem
 subsystem
  
 University of Nairobi
 College of Humanities and Social Sciences
 College of Physical and Biological Sciences
 College of Architecture and Engineering
 Faculty of Commerce
 Faculty of law
 Faculty of Arts


 4.4.1 Organisation Subsystems.
 The sub-systems perform the specific functions required for organisational survival.
Each sub-system is a system on its own because it has a boundary and absorbs
inputs from other sub-systems and transforms them into outputs for use by the
remainder of the organisation. The organisational sub-systems can be divided
into the following functional sub-systems:
 Production sub-system: this subsystem is responsible for producing the product
and service output of the organisation. This is where the primary transformation
takes place. In a manufacturing firm, the production subsystem is the
production department. In a university, it is a teaching department. In a brewing
company it’s the department that actually produces beer.


  


  

 Boundary spanning: the boundary spanning subsystems
handle transactions
at organisational boundaries. They are responsible for
exchange with the environment on both the input and the
output sides. The boundary spanning
subsystems acquire the needed supplies and materials. On
the output side,
they create demands and deliver outputs. On the input side
they provide inputs
to the organization Boundary spanning subsystems work
directly with the
external environment. In a beer manufacturing company, the
boundary
subsystem includes the marketing department on the output
side and the
purchasing department on the input side.

Maintenance subsystem: this is a
subsystem responsible for the smooth
operation and upkeep of the organisation.
The maintenance subsystem includes
cleaning and painting of buildings and
maintenance of machines. Maintenance
subsystem also includes departments,
which take care of human needs such as
morale, compensation and physical
comfort. Such departments include
personnel, salaries, and cafeteria e.t.c
 The adaptation subsystem: This is the subsystem
responsible for the organisationalchange. It scans
the organization’s environment for problems,
opportunities, threats and technological
developments and provides
appropriate recommendations to the organisation.
It is also responsible for providing information and
helping the organisation to change and adapt. In a
manufacturing organisation, the adaptation
subsystem includes such
departments as marketing research, Research and
Development and corporate planning.

 The management subsystem: this subsystem is
responsible for directing the
other subsystems of the organisation. It provides
direction, establishes
strategy, goals and policies for the whole
organisation. The subsystem also
coordinates the performance and activities for the
other subsystems and
resolves conflicts between them. It is also
responsible for developing
organisation structure and directing tasks within
each subsystem. This subsystem consists of the
top management team in an organisation.

 4.4.2 Advantages of the Systems Approach.
 Its holism approach enables one to consider the organisation as a whole.
This clearly emphasises the interdependence of the parts of the
system.
 The approach allows the student or manager to clearly comprehend the
various concepts, ideas, or elements and their relationships.
 The approach also allows for model building, which makes presentations
of ideas easier. The diagrammatic presentation makes the
understanding of
the relationship easier not only to understand but also to build up
models
to help in empirical research and hypothesis generation and testing.
 The approach also allows for quantifications of relationships between
elements in the system.
 It enables managers to view their jobs as parts of a system, not as static
isolated elements

 4.4.2 Advantages of the Systems Approach.
 Its holism approach enables one to consider the organisation as a whole.
This clearly emphasises the interdependence of the parts of the
system.
 The approach allows the student or manager to clearly comprehend the
various concepts, ideas, or elements and their relationships.
 The approach also allows for model building, which makes presentations
of ideas easier. The diagrammatic presentation makes the
understanding of
the relationship easier not only to understand but also to build up
models
to help in empirical research and hypothesis generation and testing.
 The approach also allows for quantifications of relationships between
elements in the system.
 It enables managers to view their jobs as parts of a system, not as static
isolated elements

 4.4.3. Disadvantages of the Systems Approach.
 There is a tendency for some students and practitioners
who apply the system approach to
advocate for a more centralised administrative
structure in organisation. That is looking
at the organisation as a whole may tempt one to
concentrate decision-making power at
the top of the organisation with little delegation if any.
 
 The systems approach tends to oversimplify
organizational relationships. Relying exclusively on
these models at the expense of managerial judgment
and experience can
lead to dysfunctional consequences.

4.5. Closed and Open
Systems

 4.5.1. Closed System
 A closed system would not depend on its environment
 A closed system would be autonomous, enclosed or sealed off from the
outside world.
 Although a closed system would not exist since it would die due to entropy, the classical theorists
looked at organizations as closed systems because they focused on internal systems. This is
because they took the environment for granted and assumed that the organizations could be
made more effective only through internal design. They assumed that the environment was
stable and predictable and did not affect the organization.
 Does not depend on its environment
 Does not interact with its environment
 It is enclosed and sealed off from its environment
 It has all the energy it needs.
 Assumes the environment is static and has no effect on the organisation.
 Assumes that the only thing that matters is internal structure and design, which can be
effectively structured by management.

 a) Advantages of looking at organizations as closed
systems:
 Some managers treat their organisations as closed systems.
 The classical theorists treated organisations as closed systems.
 As a basis of theory building, one can conceptualise the
organisation as a closed system to enable more
understanding.

b) Disadvantages:
 No organisation is a closed system.
 This approach ignores the importance of the external
environment in
affecting the organization



4.5.2 Open System
 An open system:
 Interacts with its environment to survive.
 To survive, it must continuously change and adapt to the environmental
changes.
 It must correctly interpret and act on the changes happening to its environment.
 It must also control and coordinate its internal activities in the face of
environmental disturbances and uncertainty.
 The need for input from the environment and the need to export its output into
the environment denote an interdependence relationship between an
organisation and its environment.
 It both consumes resources from and exports resources to the environment. for
 It cannot seal itself off from its environment. It must deal continuously with
its environment. At the same time, it must also deal with internal efficiency as
well as interact and act on the environmental changes.
 It must sell its output in the environment, coordinate its internal activities, and
deal with environmental changes and uncertainties.
 All systems that must deal with their external environments to survive are
open systems. Human beings are open systems. The University of Nairobi is
an open system.
 It must correctly interpret and act on the changes happening in its environment
 At the same time it must control, structure and coordinate its internal
environment to take account of changes in the external environment.


 a) Advantages of looking at organizations as open
system:
 Enables us to see the dependence of the organisation on
the environment
 Enables us to understand the inter-relationship between
the organisation and the environment.

b) Disadvantages
 Tends to ignore the role of management behaviour and
decision- making, capacity to make the organisation
efficient.
 It ignores the importance of the internal environment to
the organisation’s efficiency and effectiveness.

4.6. Input — Output Analysis
of a System

An input- output analysis depicts the system

as taking or receiving resources from the
environme1at, processing them into
outputs and giving them to the
environment.
Input — output analysis involves examining
a flow of materials, ideas, concepts,
money, people, e.t.c. from the
environment.
The input- output analysis consists of 5
parts namely:

 Inputs: the resources, ideas, concepts and people
coming from the environment.
 The transformation process: the process that
works on the inputs and changes them usually by
adding value.
 The feedback: the process or flow of information
regarding the quality or price e.t.c. of inputs and
outputs.
 The outputs: the end results of the transformation
process that is taken to the environment.
 The environment: the element, which constitutes
these sources of inputs or the users of the outputs.

4.7 Other Kinds of Systems

 There are many kinds of systems with their own subsystems. The human being is
one of them, but it is the most complex because it:
 Is alive- it has life.
 It can think, plan and remember.
 Is aware of its surroundings.
 Is also aware of itself.
 Have attitudes, moods, feelings and norms.
  
 You can also proceed to a higher and more complex system,

vi. The organization as a system. It is composed of human beings and
consequently transforms the complexity of the human system many times over.
The complexities of social system arise from:
 Complexities of the human system.
 The norms and values of human beings, which are intangible and hard to detect.
 Cultural dimensions of human beings, which are even harder to identify.
 The fact that these norms, values and cultures are constantly changing.

 Thus the social system (the organisation) requires extra training to be understood, manage and
change. Other systems include :( from the simplest to the most complex).

 Atom, map or bridge.

 Simplest because it’s static.
 Clocks and watches.
 A higher complexity because it is dynamic.
 Thermostat.
Higher complexity because it is self regulating within prescribed limits.
 Cell.
This is the beginning of a system that is not only Self-regulating but it is a living thing.
 Plant.
Complexity increases due to ability to reproduce and grow. (Several cells).
 Animal system.
 Dynamic and living.
 Human beings.
 Living, dynamic and has awareness of its surrounding. Self- regulating
 Social organisation.
 A social system is composed of complex systems namely human beings that transfer their
complexities to the social organisation.

Levels of analysis
 in systems theory, each system is composed of subsystems.
Four levels of analysis usually characterise organisation.
 The individual human being is the basic building block of the
organisation.
 The next higher level of analysis is the group or department.
These are collections of individuals who work together and
interact to perform subsystem tasks.
 The next level of analysis is the organisation itself. An
organisation is a collection of individuals who work together
and interact top perform subsystem tasks.
 The next level is the community of organisations, which are
grouped together. They form an important part of the
environment.
  

ORGANIZATION STRUCTURE
AND DESIGN

 5.1 Introduction
 In this lecture we shall define organization structure and design and
discuss the structural and contextual dimensions of organizations.

5.3 Meaning of Organization Structure and Design
 An organisation design is defined as a structure and a process through
which individuals allocate tasks among members, identify
relationships and integrate their activities towards common objectives.
It includes
 Allocation of tasks and responsibilities between the different members of
the organization
 Differentiating these tasks and activities into groups and departments
 Differentiating the tasks and responsibilities into hierarchies and
locations
 Establishing coordination mechanisms to integrate the different groups,
and
hierarchies into a unitary whole.

Organisation structure may
also mean the following
:
 The way the organisation is differentiated into
various tasks and responsibilities.
 The way the tasks and responsibilities are allocated
to the various members of the organisation.
 The way the organisation is differentiated into
hierarchies.
 The way the organisation is differentiated into
different locations.
 The way the different responsibilities, tasks and
locations are coordinated or integrated into a
unitary whole

5.4. Dimensions of
Organization Structure

 There are several ways in which the organization structure is measured

or differentiated.
The measures used are:
 Span of control. This refers to the number of employee directly
controlled by a single supervisor. The size of the span of control is a
function of:
 The degree of complexity of the work- simple tasks are easily
supervised and are therefore associated with long spans while mo
complex or advanced tasks are associated with shorter span of
control
 The level of staff skill and ability. Well-framed and able employ can
be supervised more efficiently in larger groups (wider spans) while
untrained staff require narrow or smaller span of control.
 The supervisors’ training and ability level. Too wide span of con is
associated with lack of control and the likelihood of costly mistake
being made by subordinates. Too narrow a span of control leads
employee being over supervised and denied the opportunity to
creative. This may lead to decline in organisation growth as a result
inability to be adaptive to environmental change and dynamics.

 (b) Chain of command: This identifies how power and control is passed
down through the organisation. A tall structure is a long chain of
command and a flat structure is a short chain of command. Chain of
command is also described in terms of vertical complexity.

(c) Ceitra1isation/decentralisation. This refers to the level in the
organisational hierarchy in which decisions are made. In a centralised
hierarchy, the decisions are made at higher level.

(d) Formalization- the amount of written documentation in the
organisation that describes the procedures, job descriptions,
regulations policies of these organisations.

(e) Specialisation- the degree to which organisational tasks is
subdivided.
 (This is also referred to as the division of labour.) If specialisation is
extensive, each employee performs only a narrow range of activities.

 f) Standardisation- is the extent to which similar work activities are
performed in a unified manner. In a highly standardised organisation,
work content is described in detail, so similar work is performed the
same way across departments or locations.

(g) Hierarchy of authority- describes who reports to whom and the
span
of control for each manager. Span of control refers to the number of
employees reporting to a supervisor. Hierarchy of authority is the
number of hierarchal levels.

(i) Structural Complexity-refers to the number of activities or
subsystems within the organisation(horizontal complexity) the number
of levels in the hierarchy (vertical complexity) and the number of
localities that is geographical (spatial complexity).

s
 j) Professionalism- is the level of formal education and training
of employees. Professionalism is considered high when
employees require long periods of training to be jobholders in
the organisation. Professionalism is measured in terms of the
average number of years of education of employees.

(k) Personnel configuration is another structural dimension
of organisation and this refers to the deployment of people to
various functions and departments. Personnel configuration is
measured by ratios such as administrative ratios, the ratio of
direct/ indirect labour employees. It’s measured by dividing
the number of employees in a function by the total number of
employees in the organisation.

5.5 Contextual Dimensions


 They characterise the whole organisation including its

environment. Contextual dimensions are important, because
they influence the structure. The key contextual dimensions
are as follows:
 Size- this is the number of people in the organisation. Since
organisations are social systems, the number of employees
measures size. Other measures such as total sales or amount
of assets are related but do not indicate the size of the human
part of the social system.
 Organisational technology- the nature of the task to the
production subsystem and includes the actions, the
knowledge and the technologies used to change inputs to
outputs. An assembly is one type of technology. E.g. college
classroom or an oil refinery.

 Organizational environment- this refers to all the elements
outside the organisation’ boundary but can affect or have the
potential to affect the organization. The key elements include:
the industry, government, customers, suppliers and the
financial sectors. Most elements that affect the organisation
are composed of other organisations. Both contextual and
structural dimensions represent variables that can be
measured and analysed for any organisation. They provide a
basis for measurement and analysis.
 Organizational culture This refers to the beliefs, values and
customs shared
by members of an organization or group. The shared beliefs,
values and customs
are strongly held and shared by the group and they help guide
the group in the
pursuit of the group’s goals

Organizational strategy This refers to the
formulation of the organizations goals and
objectives and the way to achieve those
goals
 
 

ORGANISATION
ENVIRONMENT

6.1 Introduction
In this lecture we shall define organisational
environment as the elements outside the
boundary of the organization which affect
or have the potential to affect the
organisation. We will also discuss the
various environmental sector facing
organizations such as political/ legal,
economic, industry and others.
 

 6.3 Definition of Organization’s External Environment
 Organizational environment refers to all the elements existing
outside the boundary of the organization that have the
potential to affect all or part of the organization. In a broad
sense, the environment is infinite and includes everything
outside the organization. It
consists of sectors such as
 Raw material - these are individuals and other firms which
supply the
organization with raw materials
 Human resources - these are organizations which supply the
organization
with human resources

 Financial Resources - these are conditions, competitiveness,
institutions
and instruments which supply the organization with financial
resources
 Customer or Market - this sector includes the customers who purchase

the organization’s goods and services

 Economic - this includes the state of the economy, inflation, depression,
or unemployment rates, economic policies etc. of the country or
region
where the organization sells its goods and service
 Political/legal - this includes the stability Or instability, rules and
regulations, and the justice systems of the country
 Socio-cultural - consists of values, beliefs, standards of the society in
which the organization is situated

 Demographic - consists of all the demographic dimensions of
the society
of the organization
 Natural Environment - consists of the climate, weather and
other natural
conditions of the country or region of the organization
 International environment - consists of the elements, factors and
other
organizations existing outside the country of the organization
which have
the potential to affect the organization.
  
  
  

6.4 Dimensions of
Organizational Environment

The external environment of an organization

can be differentiated, measured or
categorized in many ways. The main ways
in which this differentiation can be done
include the following studies:

 6.4.1 By Aldrich - Aldrich Categorizes
 External Environments in Terms of:
 Environmental Capacity: This measures the environment in terms of resources
availability
 Homogeneity/Heterogeneity: This categorizes the environment in terms of the
degree of similarity among the environments elements
 Stability/Instability: This categorizes environment in terms of the degree of
turnover of the elements
 Consensus/Dissensus: This categorizes the environment in terms of the degree
to which an organization’s claim to a specific domain is disputed or recognized
by other organizations
 Concentration/Dispersion: This measures the degree to which resources and the
elements are evenly distributed over the range of the organization’s domain.
 Environmental Turbulence: This measures the extent to which the task
environment of an organization is disturbed by an increasing rate of
interconnection between elements and trends.

 6.4.2 Emory and Trist
 Emory and Trist categorized external environments into
the following categories:
 Placid Randomized. This is a simple environment. It is
placid in the natural sense that elements change slowly.
The environment is random because when a change
does occur, it is not predicted, and is not coordinated
with other environmental elements.
 Placid Clustered. This environment is stable. Elements
are linked together so that any slight change in one
causes simultaneous change in other elements. When
threats or opportunities occur they occur in clusters
which are more dangerous for the organization.

 Disturbed reactive. In this environment changes are no longer
random. Actions by one organization can disturb the
environment and provoke a reaction. This environment is
made up of large organizations. A decision by any one
organization in this type of environment is significant enough
to cause a disturbance, and calls for a reaction from other
organizations. In a disturbed reactive environment,
management’s task is to carefully plan decisions and strategic
moves to allow for counter moves.
 Turbulent Field. This is an environment characterized by both
complexity and rapid changes. Multiple sectors experience
dramatic changes and the changes are connected. The
turbulent field usually has overwhelming negative
consequences for the organization. The distinguishing feature
of the turbulent field is the inter-dependence and the inter-
connectedness of the elements.

 6.4.3. Lawrence and Lorsch Studies
 Lawrence and Lorsch of Harvard University examined three
departments
(Manufacturing, Research & Development and Sales) in ten
companies in the United
States of America. Their aim was to find out how
organizational structure relates to
environmental complexity. Their findings were that;
 The plastics industry with high environmental complexity tended
to have higher departmental differentiation than either the
food industry, (facing moderate complexity), and the
container industry, (facing low environmental complexity).
They defined differentiation as the differences in cognitive and
emotional orientation among managers in different functional
departments.

 6.4.4 Burns and Stalker Studies
 Burns and Stalker observed 20 industrial firms in England and discovered
that when external environment was stable, the internal structure was
characterized by rules, procedures and a clear hierarchy of authority
(i.e. high formalization). They were also highly centralized.

However, the studies found out that in rapidly changing environments,
the internal organization was much looser, free flowing and adaptive.
Rules and regulations often were not written down, or if written down
were ignored. The hierarchy of authority was not clear. Decision
making was decentralized. Burns and Stalker used the term “organic”
to describe the decentralized, low formalized, flexible- structures, and
“mechanistic” to describe centralized, highly formalized and inflexible
structures.

Environment on the
Organization

 The organization’s external environment has the following effects on the

organization:
 Resource Dependence: The organization depends on its external
environment for its resources. It also depends on its external
environment for marketing its goods and services. These
dependencies give environmental elements power over the
organization. When these dependencies are small and isolated as in
the case of placid randomized environment, significant coping is not
required. When the dependencies are large and are changing rapidly,
the organization must take steps to cope with these dependencies and
reduce them. Organizations have two coping techniques:
 The first one is internal change. This involves altering its structure,
internal work patterns, or policies, or planning and forecasting.
 The second technique is to reach out and change the external
environment. The organization can try to reduce environmental
change, or to change external conditions in a direction suitable to its
own needs. These internal and external strategies are described below
 

 6.5.1. Internal Change Categories: These are as follows;
 Structural complexity. As the complexity in the external environment increases,
so does complexity in the organization structure. This is based on the law of
requisite variety that says that complexity in one system is required to
control complexity in another system.
 Buffering. Buffers absorb uncertainty from the environment. The goal of buffer
departments is to protect the organization’s technical core from external
disturbances so that it can operate as efficiently as possible. Buffers are specific
departments established to deal with specific domains and absorb the
uncertainty originating from each domain. Advertising, sales and marketing
departments attempt to buffer the technical core (the production department)
from environmental uncertainty.
 Boundary .spanning roles. These are departments that link and coordinate the
organization with key elements in the external environment The boundary role
establishes a relationship with individuals and organizations in the external
environment. The boundary spanning role serves two purposes:
 To detect and process information about changes in the external environment.
 To represent the organization to the external environment
 Examples of departments which perform boundary spanning role
include strategic planning, public relations.
 Differentiation. This is the difference in cognitive and
emotional orientation among managers in different functional
departments and the difference in formal structure among
these departments. When the external environment is
complex and rapidly changing organizational departments
become highly specialized to handle the uncertainty in their
external domain. For example, when the University of Nairobi
faces a highly hostile political environment, it establishes
specific departments to deal with the complex political
environment
 Integration. Integration is the quality of collaboration between
departments. When environments are highly uncertain,
organizations form integrators to increase co-ordination
among departments. These integrators include liaison officers,
management committees, task forces, or integrators.

 Planning and Forecasting. When the environment
is stable, the organization can concentrate on
current operational problems and day- to-day
efficiency. Long-range planning and forecasting are
easy to do because environmental demands in the
future will be the same as they are today. But when
environments are hostile, rapidly changing and
complex, specific departments for planning and
forecasting are essential
since p1annng required is extensive.
 

 6.5.2 External Strategies
 The relationship between organization and its
external environment is not simply one of
organizational adaptation. Organizations can also
reach out and change the external
environment. Two strategies can be adopted to
manage the external environment viz;

 Establishing favorable linkages with the key

elements in the environment and
 Shaping the environment domain
 

Establishing favorable
linkages.
 This may include:
 Mergers. In a merger, the organization acquires an organization in the
domain that is creating uncertainty

Contracts. The organization enters into contractual arrangements
with suppliers or purchasers.
 Joint Ventures. Organizations form companies with key stakeholders in
the external environment to reduce uncertainty

Co-optation. This occurs when leaders from important domains in
the environment are brought into the organization e.g. influential
customers or suppliers are appointed to the board of directors of the
organization
 Interlocking Directorates. The individuals appointed to the board of the
organization are also members of other key stakeholders in the
external environment.

External Recruitment. Hiring, for example
retired generals from the air force to
connect organization manufacturing air
force equipment to the air force

Advertising
 . Organizations also advertise their products to customers
 Public Relations. This is aimed the at public merely to cast the
organization in a favorable light
 Controlling Environmental Domains of the External
Environment.
 This entails three techniques:
 Change domains. An organization may decide to produce
other products.
 Political activity. This involves influencing government officers
or politicians to make or repeal laws and regulations in the
organizations favor.
 Trade Associations. The organization may form forces with
other organizations in the industry that have similar
interests, by pooling resources together to take care of their
interests, These organizations can afford to pay people full-
time to carry out activities such as lobbying legislators,
influencing regulations, developing new relations, campaigns
and blocking competition .

ORGANIZATION TECHNOLOGY


7.1. Introduction
 In this Lecture we shall define organizational
technology and technology typology and
discuss its importance to the efficiency and
effectiveness of organizations. We shall also
discuss the various technology typologies such
as technical complexity, task interdependence
and knowledge analyzability and analyzability.
 

7.3 What is Technology?

Technology refers to the process of

transforming inputs into outputs. It
includes the knowledge, tools, the
equipment and the processes used in
producing goods and services in an
organization. All organizations have
technology
 7.4. Importance of Technology
 Technology is important because:
 It determines the efficiency of the organization
 It is the principal determinant of increase in
production of limited and exhaustive resources
 It affects the attitudes, feelings and the
temperament of the worker, and therefore
affects his or her productivity
 It affects organization’s structure

7.5. Technology Typology and
its Categories

 Technology typology refers to the ways technology is measured,

differentiated or categorized.

Technology can be classified or differentiated in many ways. Some of
the ways are technical complexity of operations, ii4iterdependence of
operations and knowledge
analyzability and variety. Technical complexity refers to the
differentiation in terms of
the use of human labor versus the use of machinery and equipment in
the transformation process. The more the proportion of the human
input the less complex the technology and the more the proportion of
the machine input the more complex the technology. In the case of
interdependence of operations, the greater the interdependence the
higher the technical complexity. In the case of knowledge analyzability
and variability and task variety the complexity of technology takes on
four dimensions. These dimensions of technology typologies are
explained here below.

 7.5.1 Joan Woodward’s Technical
Complexity
 Joan Woodward was a British Industrial
Sociologist. Her studies covered 100
manufacturing firms in South Essex, England.
Her study was conducted between
September 1954 and September 1955. The
study was designed to test whether
management principles as applied on
organization structure, span of control, chain
of
command etc led to successful organizations.


Method of study

 Woodward and her research team visited each of the firms

studied, interviewed managers, examined company
records and observed its manufacturing operations. Her
data included a wide range of structural characteristics
of these organizations such as span of control, levels of
management, management and clerical ratios, work
skill level, dimensions of management, (i.e. written
versus verbal communications, use of sanctions) type of
manufacturing processes, data on commercial success
of the company (such as profitability, prices of shares in
stock exchange) the history and rate of development,
reputation of the firm as an employer, level of salaries
paid to senior staff, rate of staff wastage and the
relationship between the firm and outside organizations.

Data Analysis

 The initial study of data found that firms varied widely in such
things as span of control, number of hierarchical levels,
administrative ratio and amount of verbal communications.
Thus her data did not show any proof to the “one best way”
principle of management.
However a further look and analysis of the data and
information showed a relationship between organization
structure and technology. Woodward developed a scale and
organized the firms according to technical complexity of the
manufacturing processes. Technical complexity represented
the mechanization and predictability of the manufacturing
process. Her scale had ten categories that were grouped into
three production types as summarized in Annex 1 attached
and discussed below.
  

Group 1: Small Batch and Unit
Production

 These firms tended to be job shop operations

that manufacture and assemble small orders
to meet specific needs of customers. Customs
work is the norm. This technology relies
heavily on the human operator. It is thus not
highly mechanized and predictability of
outcome is low. Examples included many
types of made to order manufactured
products, such as specialized construction
equipment or custom made electronic
equipment.


Group 11: Large Batch and
Mass Production

 This manufacturing process is characterized by

long production of standardized parts.
Output often goes into inventory from which
orders are filled because customers do not
have special needs. Examples would include
most assembly lines, such as automobiles or
trailers homes. The integrated cotton mill is
also a mass production technology.

Group III: Continuous Process
Production

In this technology, the entire process is

mechanized. There is no starting and
stopping. This represents mechanization
and standardization one step beyond an
assembly line. The
organization has high control over the
process and outcomes are highly
predictable. Examples would include
chemical plants, oil refining, and liquor
production.

 Her findings were as follows;
 Ratio of management staff to total personnel shows an increase
from unit production, to mass production and to continuous
process production.
 Supervisor span of control is highest in mass production and
lowest in process production.
 Direct labor to indirect labor ratio decreases with technical
complexity.
 Other characteristics such as span of control, formalized
procedures, and centralization are high for mass production
and low for other technologies i.e. unit production and process
production.
 The number of skilled workers and the use of verbal versus
written communication also depend upon manufacturing
technology. It is high in unit and process production and low in
mass production.

 Overall, the management system in both unit and
process technology is characterized by organic
while mass production is characterized by,
mechanistic system.
 With respect to technology and performance,
Woodward studies found that
successful firms tended to be those that had
complementary structures and
technologies i.e. firms that most nearly
approximated the typical structure
for their technology were most effective. Firms that
deviated in either direction from their ideal
structure were less successful.

 Woodward was able to explain the disparity between
her findings and the
classical prescriptions of management theorists’
these principles must have been based on these
theorists’ experiences with organizations that used

mass production technologies. The mass

production firms had clear lines of
authority, high formalization, a low proportion of
skilled workers achieved
through a high division of labor, wide span of
control at the supervisory
level and centralized decision making.
 Evaluation of Woodward studies
their system
of production

 Group 1: Small Batch and Unit Production Technology

 Production of simple units to customer’s orders
 Production of technologically complex units
 Fabrication of large equipment in stages 7.
 Production of small batches

Group 2: Large Batch and Mass Production Technology
 Production of components in large batches. Subsequently assembled directly
 Production of large batches assembly line type
 Mass production
 Group 3: Process Production Technology
 Process production combined with the preparation of product for sale by large
batch or mass production methods
 Continuous flow of chemicals of liquids, gases, and solid shapes .


 7.5.2 James Thompson’s Task Interdependence
 Another pioneer in the technology- typology arena
was James Thompson. Unlike Woodward’s,
Thompson’s work was not based on field research.
His contribution was theoretical he drew from a
variety of sources and proposed new ideas and
frameworks about organizations. In Thompson’s
view, organizations are open systems and
technology reflects the environment outside the
organization as well as internal task activities. He
proposed three categories of technology that
reflect relationships with clients as well as internal
transformation process. These categories are
Mediating or pooled
technology
 : Mediating technology involves the mediation
or linking of clients with the external
environment. Typically these clients cannot
deal with each other directly because of costs
or complexities involved in face to face
transactions. A stockbroker for example
mediates between sellers and buyers. So does
a real estate firm. Employment agencies bring
together clients who are jobless with clients
who have job openings. Banks and retail stores
also mediate between clients in the
environment.
Long Linked or sequential
Technology
 : the concept of long-linked technology refers to the combination
in one organization of successive stages of production, each
stage of production uses as its inputs the production of the
preceding stage and produces inputs for the following stage.
Organizational activities occur in sequence in long linked
technologies: the output of operation 1 becomes the input of
operation 2, the output of operation 2 becomes the input of
operation 3 and the finished product is then available to
customers. Large-scale organizations that use assembly-line
production to produce goods or services through a sequence
of activities as in the automobile industry are examples of
long linked technologies.

Intensive or reciprocal
Technology
 : intensive technologies are characterized by the
collection of specialized services for clients. A
variety of activities can be brought to bear on the
client and have substantial impact on the client.
Intensive technologies generally go beyond
providing a simple service and are designed to
bring about change in the client. Hospitals are an
excellent example because they represent a
collection of specialized skills to bring about
therapeutic change in patients. A university is
another example — a wide variety of disciplines
and support services are available to facilitate
educational development of students. Figure 7.1
illustrates the three types of technology typologies
by Thompson.

Evaluation of Thompson’s
work

 Thompson’s study fails to explain the departmental

technologies — for example what classification would
one use for G.M which uses an intensive technology in
its R&D department, a long linked one in its assembly
line, and a mediating technology in its financing
department.
 
 Thompson also does not deal explicitly with the issue of
complexity or variability of technology in a given case
(Robbins — 2000). For example some long linked
technologies are quite complex and allow variability and
exceptions (e.g. assembling different automobile
models with color and other options) while others are
less complex.  


7.6.3 Charles Perrow’s Knowledge Technology

Charles Perrow tried to look at the limitations of Woodward
namely the fact that Woodward studied only manufacturing
firms. Since manufacturing firms represent less than half of all
organizations, technology needs to be operationalised in a
more general way if the concept is to have meaning
across all organizations.

Per row looked at knowledge technology rather than
production knowledge. He defined technology as “the action
that an individual performs upon an object, with or without the
aid of tools or mechanical devices, in order to make some
change in that object”. He identified two dimensions
of4echnology viz:

 Task variability — this considers the number of
exceptions encountered in one’s work. These
exceptions will be few in number if the job is high
in routine ness. Jobs that normally have few
exceptions in their day-to-day practice include
those on an automobile assembly line or as a fry
cook at McDonald’s. At the other end of the
spectrum if a job has a great deal of variety, a
large number of exceptions can be expected.
Typically this characterizes top management
positions, consulting jobs or the work of those who
make a living by putting out fires on off shore oil
platforms. So, task variability appraises work by
evaluating it along a variety routine ness
continuum.

 Task/Problem Analyzability — the second dimension assesses the
type of procedures followed to find successful methods of responding
adequately to task exceptions. The search can at one extreme, be
described as well defined. An individual can use logical and analytical
reasoning in search for a solution. If you are basically a high B-student
and you suddenly fail an exam given in a course, you logically analyze
the problem and find a solution. In contrast, the other extreme would
be ill-defined problems. If you are an architect assigned
to design a building to conform to standards and constraints that you
never
heard about or encountered before, you will not have any formal
search
technique to use. You will have to rely on your prior experience,
judgment and intuition to find a solution. Through guesswork and trial
and error, you
that might find an acceptable choice. Perrow called this second
dimension problem analyzability ranging from well defined to ill
define.
 Routine technologies are characterized by little task variety and the
use of objective,
computational procedures the mass — production processes used to
make steel or auto
mobiles or refine petroleum belongs in routine category. A bank’s
teller’s job is also an
example of activities subsumed under routine technology.
 Engineering technologies have a large number of exceptions, but
they can be handled in
took at a rational and systematic manner. The construction of office
buildings would fall in this cell, as would be the activities performed by
tax accountants.
 Craft technologies (Cell 3): deal with relatively difficult problems with
a limited set of
exceptions. This would include shoe making, furniture restoring, or the
work of
performing artists.

 Non-routine technologies: are characterized by
many exceptions and difficult to analyze problems.
Examples of non-routine technologies would be
strategic planning basic
research activities. In summary, Perrow argued
that if a problem can be studied systematically
using logical and rational analysis cells 1 or 2
would be appropriate. Problems that can be
handled only by intuition, guesswork or unanalyzed
experience requires the technology of cell 3 or 4.
Similarly if new, unusual, or unfamiliar problems n
in a appear regularly, they would be in either cell 2
or cell 4. If problem are familiar, then cell 1 or 3
are appropriate.

Technology and Structure
 Perrow argued that control and co-ordination methods should
vary with technology type. The more routine the technology,
the more highly structured the organization should be.
Conversely, non-routine technology requires greater structural
flexibility. Perrow then identified the following as the key
aspects of structure that could be modified to the technology.
 The amount of discretion that can be exercised for completing
tasks
 The power of groups to control the units goals and basic
strategies.
 The extent of inter-dependence between these groups.
 The extent to which these groups engage in co-ordination of
their work
using either feedback work or the planning of others.

 The above means that:
 The most routine technology (cell 1) can be accomplished best
through standardized co-ordination and control. These
technologies should be aligned with structures that are high in
both formalization and centralization.
 Non-routine technologies (cell 4) demand flexibility. Basically
they would be decentralized have high interaction among all
members, and be characterized as having minimum degree of
formalization.
 Craft technology (cell 3) requires that problem solving be done
by those
with the greatest knowledge.
 Engineering technology because it has many exceptions but
analyzable search process, should have decisions centralized
but should maintain flexibility through low formalization
Evaluation of Perrow’s
Typology

At the general level, i.e. where technologies

can be differentiated on the basis of
routine ness and where more routine
technologies are associated with higher
degrees of formalization and centralization
— there is evidence to support Perrows
theories.

8.1 Introduction

 In this lecture we shall define organizational

change and explain the various processes of
implementing change. We shall also discuss
the main causes of change and give an insight
into the causes of resistance to change. Lastly
we shall also discuss in detail the meaning of
organizational development and the main
techniques of achieving organizational
development.


8.3. What is Organizational
Change?

 According to Daft (1986), organizational change is the “adoption

of a new idea or behaviour by an organization”. Similarly,
Hodge and Anthony (1988) define organizational change as an
alteration in the status quo. Change occurs mainly because
organisations as open systems, must frequently cope with
shifts in key environmental domains. If they do not change to
cope with shifts in important environmental domains, they
may face serious problems and they may even die. By
adapting to new conditions, they can continue to grow and
prosper. Thus organisations must change to cope with
changes generated by changes in their external environment,
which are continuously changing. Changes may also be
generated by the internal environment (from within the
organisation). Change generated from within the organization
is endogenous, while that generated from without is known as
exogenous.

 According to Hodge and Anthony (1988) although organizational ecology’s main
contribution is its dynamic environmental conceptualisation, this does not
“displace all other explanatory variables”. In much of research, ecological
variables are combined with institutional and structural variables to explain
organisational adaptation. This paper takes the position that organisational
change can be planned and managed to a certain extent by the management.
To the extent that change can be planned then the uncertainty and instability
associated with change can be reduced. Organizational change is therefore;
  
 alteration of the status quo
 varying or modifying the current state of the organization aspect
 reactive change- change in response to external circumstances
 Proactive change: change primarily caused by desire by management to change.
 Organizational change can influence and be influenced by several features of
the organizational life.
 Change in one part of an organization affects people and processes in another
 Change can be triggered by a number of external and internal factors.

8.4. Sources of
Organizational Change

 Organizational change can be caused by either external or external forces or both.

External triggers include: change in demand for an organization’s products or
services (as change a result of changing consumer preferences, action by
competitors, government etc), threatening tactics of competitors, arrival of a
new corner in the market, or take over of the business. ‘Internal Triggers
include: need to change strategy as a result of external
forces, need to introduce a new culture in the organization, need to improve
productive efficiency, need to improve the quality of product or services, or the
need to improve standards. Change can have an impact on various aspects of
an organization. It can impact on task, technology, structure or people.
Organizational growth or retrenchment as
well as new government action often changes structure. Changes in technology
can also affect people’s attitudes, emotions, skills, abilities, expectations and
interest. Seldom is the impact of change neatly compartmentalized as affecting
just one or two parts of an
organization. The arrows in the diagram below indicate that change usually has
an
interactive, dynamic effect on the other parts of the organization.  

8.5 Need for Organizational
Change

 


 Organizations face a continuously changing environment for example

competitors introduce new products, new production technologies are
developed, political environments change, economic environment
changes e.g. economic growth, economic depression, increase or
decrease in interest rates etc.

The organization’s internal environment also changes eg employees
retire or resign, or inter group conflicts arise

These changes and others give managers daily challenges. The
managers must constantly respond to those challenges. They meet
these challenges by implementing one or more of the organizational
change and development techniques namely the three phase the four
phase or the six phase processes. Each of three processes is discussed
below.  

8.6 Organization Change
Processes


There are THREE processes of
organizational change frequently
encountered in
vices, management. These are:
The three phase process by Kurt Lewis
The four phases process by Mint berg
The six phase process by Greiner

 8.6.1 Kurt Lewis’s Three Phase Process
 Forces resisting change — maintaining stability
 Equilibrium
 Process for change
 Proposes that every human grouping has some forces within it which help keep it in
balance and provide it with stability. On the one hand there are forces that force it to
e may maintain stability and others which provide it with a reason to change (the force -field
theory)


 Equilibrium

 
  
 Field force theory
 all behavior is the result of an equilibrium between the two sets of opposing forces (driving forces
and restraining forces)

Driving forces: push one way to attempt to bring about change
 Restraining forces: push the other way in order to maintain the status quo


 Lewis suggests that the best way to implement change is to use a three
—step approach to change the behavior of those opposing the change
as follows.
  
 Step 1: Unfreezing existing behavior by persuading and convincing
those with restraining force
 Step 2: - Changing Behavior by Adopting new Attitudes
 implementing the changes
 use of a change agent

 Step 3: Refreezing - reinforcing continuously convincing the
organizational members that change is not only necessary and
desirable, but inevitable. This can be consolidated by various support
mechanisms such as encouragement, participative management
styles etc.

 8.6.2. Mint Berg’s Four Phase Change Process
 Mint berg identifies a four-phase process of change as follows;

Stage 1: Identification of the need for change

During the first phase of the change process management identifies
the need for change
 Stage 2: Identification of the alternatives
 In the second phase management identifies the various alternatives of
implementing the change
Stage 3: Evaluation of the various alternatives
 In this phase the various alternatives are evaluated using a given criteria
and the most efficient alternative is selected for implementation

Stage 4: Implementation
 During this phase change is implemented

 8.6.3 Greiner’s Six Phase Change Process
 Greiner identified six phases common to successful change efforts each involving a
stimulus to the power structure and a reaction from the power structure of an
organization. A general overview of this process is discussed here below.

Phase 1: Pressure and Arousal: The process begins as a result of pressure
on top management. These pressures may arise either externally or internally.
In successful changes, the result is the same — arousal to take action.

Phase 2: Intervention and Reorientation: Arousal in itself does not
automatically ensure proper response. It is quite likely that top managers will be
tempted to see
problems as temporary or to blame them on other things. As a consequence,
successful
change typically involves intervention by an outsider. It is important that this
individual
be known for his improvements and that he or she enters an organisation at the
top or as a consultant who reports directly to the highest level of management.

 Phase 3: Diagnosis and Recognition: This phase is characterized by a shared
approach to power as the newcomer, with top management support and active
personal involvement, engages members at several lower levels in
collaborative, fact finding,
for problem solving discussion in order to recognize and diagnose current and
potential organizational problems, as well as to reduce any anticipated
opposition.

Phase 4: Invention and Commitment: During this phase, attention switches
to the
invention of new solutions capable of generating sustained commitment to new
courses
of action. As in previous phase, the newcomer plays an active role, involving all
management levels in developing new ideas and methods for solving problems
and taking action. Solutions are based on shared power, emphasizing
participation in the invention
the of group solutions to the problems identified in phase 3. Such collaboration
has been shown to be particularly effective in developing quality solutions and
sustained commitment to action.

 Phase 5: Experimentation and Search: In this phase solutions identified in
phase 4 are tested for credibility on a small scale before they are introduced on
a companywide basis.
In addition, the method previously used to generate solutions (interaction
and shared power) is carefully evaluated. Further, rather than implementing
major changes at the top,
numerous small changes are introduced at all organizational levels on an
experimental
basis.
Phase 6: Reinforcement and Acceptance: This last phase is an outgrowth of
the acceptance and internalization of change as previously experienced. As
change is found
to be successful, and as participants support grows, it is introduced on a much
larger scale, ultimately being absorbed into all parts of an organization.
Accordingly, this phase
involves reinforcement from positive results, leading in due course to an
acceptance of new practices. Greiner suggests that apart from the change
itself, the most significant outcome of this phase is greater acceptance at all
organizational levels of the use of shared power as an approach for introducing
change.

8.7 Additional Aspects of
Successful Change

 Another way of looking at the change process and the elements

necessary for change to occur is by referring to the views of Daft
(1986), Daft concedes that in order for a new idea or behavior to be
adopted, a series of activities has to be completed. If any one of these
elements is missing the change process will fail. These elements are:

 Need: A need for change occurs when managers are dissatisfied with
current performance.
 Idea: An idea is a new way of doing things. The idea may be a model,
concept or plan that can be implemented by the organization. The
idea may be a new product, a new machine, or a new technique for
managing employees.
 Proposal: A proposal occurs when someone within the organization
requests the adoption of a new behavior, idea, or technique. The
proposal gives the organization the opportunity to decide if it wants to
try the change.

 Decision to Adopt: A decision occurs when the
organization makes a choice to adopt the
proposed change.
 Resources: Human force and activity are
required to bring about change. Change
requires resources. Change does not happen
on its own. In order for a change to be
successfully proposed and implemented,
resources must be allocated to it.
8.8. Principles of Successful
Organizational Change


Margulies and Wallace drawing on an in-depth analysis of
techniques and applications of organizational change offer
several guiding propositions on successful organizational
change
Proposition 1: planned change efforts are much more likely
to be successful if initiated and supported by the top
management of an organization.
  
 Proposition 2: Changes will flow most smoothly when those
who will be affected are all brought into the process at the
earliest possible stage.

Proposition 3: Successful changes require time and repeated
effort. That is, before new
 becoming successfully incorporated as an ongoing part of
organizational life, a change effort will typically require
reinforcement over some period of time.

Proposition 4: A successful change requires careful
monitoring to secure accurate with
feedback concerning intended outcomes. No matter
how good a job one does of initially
selecting a change strategy and facts, something-
unexpected will eventually occur during
implementation. Only by carefully monitoring the
process can one identify the
unexpected in a timely fashion and react to it
intelligently.
 

Dealing with Resistance to
Change


8.9.1 Resistance to Change
 Although change is a universal and an inevitable phenomenon, it rarely occurs in a
smooth, balanced fashion. Resistance to change is a frequent and natural
occurrence. The
paragraphs that follow discuss four of the most common reasons for resisting
change.

 (a) Parochial self-interest: Virtually all organizational members can be expected

to behave in ways that will maximize those goals that they personally consider
most important. Consequently, to the extent that all proposals for change
order represent a threat to the status quo, individuals and groups are likely to
resist if
they believe they stand to lose something of value as a result. In such
circumstances, the parties involved will for the most part focus on their own self
interest, and only incidentally on the overall good of the organization. The
following are some of the personal goals, that when threatened, will almost
inevitably provoke resistance; power, money, prestige, convenience, security
etc.

(b) Lack of understanding and trust:
People also tend to resist when they do not
understand the intended purpose,
mechanics, or consequences of a planned
change.
(c) Different assessments: Resistance to
change frequently occurs when
organizational participants differ in their
evaluation of associated costs and benefits
resulting from a proposed change.

(d) Low tolerance for change: Opposition
may stem from a low tolerance for change.
Different people have varying abilities to
absorb change. Unknown consequences of
change may present a psychological threat
to many individuals challenging their sense
of adequacy as well as threatening their
self-esteem.


 8.9.2 Dealing with Resistance to Change
 There are six methods suggested by Bedeian (1983) to
influence participants to accept changes. These
methods are briefly discussed below.
 Education and Communication Education is the
sharing of knowledge or perception that a change
initiator has acquired through means not typically
available to other members of his or her general
organization. This approach involves securing relevant
facts, eliminating misunderstanding due to incorrect or
incomplete information and resolving difficult
viewpoints through discussion.
 

 Participation and Involvement This involves the
participation of potential resisters in the planning and
implementation of a proposed change. This method is
based on the notion that the most effective way to
reduce opposition and to engender commitment to a
proposed change is to work collaboratively with the
members of the targeted system.
 
 Facilitation and Support: This involves the use of
facilitative and supportive skills. Particularly appropriate
when resistance develops as a result of fear and
anxiety, this method may be traced to the interest
stirrings of human relation’s movement.

 Negotiation and Agreement: This involves the use of covert attempts
to side
step potential resistance to change. Manipulation is not simply a
matter of
persuasion but more a devious tactic for persuading different minded
groups
when that a proposed change should be adopted. As such,
manipulation involves
and supporting a position through slanted appeals to the particular
interests of a
target system. Selective distortion of information by both omission
and
commission may be involved. In addition facts and emotional appeals
most
likely to be convincing to the principal parties may be consciously
misrepresented. Co-operation may be classified as a form of
manipulation.
Absorption of various key resisters into an organization’s selection
making
structure has long been a popular method to avert opposition.

 Explicit and implicit Coercion: This method
assumes that there is a basic disagreement
and that the principal parties involved are
operating from
relatively fixed positions. Typified by at least
temporary abandonment of efforts at
consensus, coercion involves the use of force
or threats or both to compel acceptance of an
enacted change. Tactics involved may include
roach violent disagreements as well as
threatened firings, transfers and loss of e to
promotion possibilities. Coercion is generally
used sparingly in practice.

8.10. Creating a Climate of
Total Organizational Change

 In order for a meaningful and total organizational

change to occur it is important not only to adhere
to above methods of managing change, it is also
important to ensure that a new climate and culture
of people in the organization is created. Climate
refers to the way people behave and think and
culture refers to the values of people in the
organization. For an effective change to occur,
both the ways people behave and think, and their
values,
must change. The more these values and beliefs of
people can be changed, the more
organizational change can be achieved.

 8.11.1 Organizational Development
Techniques
 This mainly refers to changing the people. There
are many techniques in use depending on the
organization and the consultant. The four most
widely used include.
 Survey feedback
 Confrontation meetings
 Sensitivity training
 The managerial grid

 i) The Survey Feedback4Technique
 In this technique a questionnaire is used to measure altitudes of employees. The questionnaire is
administered by outside consultants and the results are sent to top management. The main
aim is to find out the views of employees on certain issues. This information can be used to
identify the existence of some problem for
example low morale and seek employees’ proposals of the solutions to the problems. They
can also be used to follow up on the success or not of the proposed solutions. Some examples
of attitude survey questions include:

- the hours of work here are okay( select one)
 Very low
 Low
 Average
 Very high
 High
 - I am paid fairy compared with other similar companies(select one)
 Very low
 Low
 formalization is a problem in my department

 ii) The Confrontation Meetings
 Confrontation meeting is a type of focused exercise in which the
management group meets with employees to discuss and
come to grips with problems that have arisen in the
organization. A consultant is included in the meeting to help
slash the issues that face the organization at any particular
moment. A confrontation meeting usually begins with the
consultant introducing the subject matter in general terms,
emphasizing the need for communication, mutual trust and
understanding and the need for members and management to
share responsibility for accomplishing organization goals. In
such meetings, discussions on organization’s operating
problems are held, and solutions proposed.

 (iii) Sensitivity Training (or T-Group Training)
 This method or technique is a group experience designed to provide maximum
possible opportunity for the individuals to expose their behavior, give and
receive
The feedback, experiment with new behavior, and develop awareness and
acceptance
top of self and others. It provides managers with sensitivity for themselves and
others
tam and with skills necessary to more effectively guide and direct changes in
social
for arrangements and relationships. It develops in managers the sensitivity
the understanding and skills to participate effectively both as group leaders and

the members. It also enables managers discover and develop tested principles
and
improved methods of human relations training.

Sensitivity training is arranged usually away from the job, no activities or
discussion topics are planned and the focus is on the here and now issues. The
participants are encouraged to portray themselves in the group rather than in
terms of past experiences or future problems. The consultant or trainer sees to
it that an environment of mutual trust, understanding and frankness is created

 (iv) The Managerial Grid
 This method is used to bring about change in employees’ attitudes and
values.
The technique was developed by two gentlemen Blake and Moulton.
The basic
objective of the program is to develop managers with a high concern
for people and high concern for production. The program is carried out
in six phases:

Phase 1: Consists of seminal training in a one-week conference where
managers study the theory of managerial effectiveness.

Phase II: The manager implements a climate of openness developed
in phase I
Phase III: The experiences of phase II are extended to include the
interrelationship of related organizational units

 Phase IV: Top management works with other groups
to develop an ideal model of employee
management relationship.

Phase V: During this phase tactics are developed
of moving the company to the ideal organizational
model development in phase IV.

Phase VI: The achievement of phases I-V is
evaluated with the objective of identifying
weaknesses and taking corrective actions as
necessary.

 Therefore O.D is a strategy of improving organizational
effectiveness by means of behavioural science approaches
involving the application of diagnostic and problem solving
skills by an external consultant in collaboration with the
organizations management. It is an organization wide process
that utilizes the techniques and approaches of the behavioural
sciences i.e. psychology, social psychology and sociology in so
far as they relate to the study at work in organizations. It
involves the intervention of an external third party in the
shape of a change agent trained and experienced in
behavioural science applications in the work situation. It is
aimed at organizational effectiveness, not just changing
people or structures for the sake of change. The change agent
and the organization must adopt a collaborative relationship
— which means being open with one another, having a high
degree of trust, and being prepared to work through conflict in
a constructive way.

Role of the Change Agent

 The success of any O.D program depends largely on

the part played by the third party.
The role ranges from the highly directive leader
type of role to non-directive counseling
role. In the first mentioned role, the third party will
tend to prescribe what is best for his
client, at the other extreme, he will tend to reflect
on issues and problems back to his clients without
offering any judgment himself. He will let the client
make / suggest proposals. In between these
extremes are several other possible roles, as
indicated below:


 The following are the qualities of a good third party in an O.D process
 Intellect and personality, in particular the ability to listen diagnostically,
and to apply rational approaches to problems and situations.
 Mature outlook in terms of awareness, and acceptance of personal
strengths and
weakness.
 A preference for interpersonal relations based on mutual trust and liking,
for
teamwork rather than competitiveness and for conflict to be handled
openly and
constructively.
 Must have basic understanding of behavioral science knowledge and
more
generally, intervening skills, presentation skills and ability to establish
and
ion maintain comfortable relationships with a wide cross-section of
people.
 8.11.2 Benefits of an O.D Program
 It enables an organization to adopt to change in a way that obtains the
full
commitment of the employees concerned.
 It can lead to organizational structures that facilitate employee co-
operation and the achievements of task.
 It releases latent energy and credibility in the organization.
 It can improve understanding of organizational objectives by employees
 It can improve decision making processes and skills.
 It provides opportunities for management development in the context of
real
organizational problems
 It may stimulate more creative approaches to problem solving
throughout the
organization.
 It usually increases the ability to management groups to work as teams.

 8.11.3 Principles of Implementing an O.D Program
Successfully.
 create and sustain a sense of urgency about the future
 create and empower a leadership team (a guiding coalition)
 develop a vision and a strategy for achieving it
 constantly communicate the new vision.
 Empower employees to help the change happen by removing
obstacles such 8 12 as restrictive structure, lack of necessary
skills, inflexible managers, and
unimaginative reward systems.
 Generating some benefits in the short term so that people can
see some
tangible improvements on the way to achieving the end goal
 Consolidating short gains
 Embedding the new approaches in the organizations culture.

8.12. Business Process Re-
engineering (bpr)


8.12.1. What does BPR Involve?
 BPR is a strategic approach to organizational change where the entire business
architecture of the, enterprise is restructured. It is a fundamental rethinking and a radical
redesign of business processes to achieve dramatic improvements in critical
contemporary measures of performance, such as quality, cost, service and speed. BPR is
vital, under modem conditions of customer expectations, intense competition and the
pervasive nature of change. BPR processes include all the collection of activities that take
one or more kinds of inputs and creates an output that is of value to the customer. Typical
processes include ordering, buying, manufacturing, product development, delivery,
invoicing. The reengineering process tends to lead to the following changes in the way
work is undertaken:
 Several jobs or tasks becoming combined with related tasks.
 Workers become more involved in decision making (empowerment increase)
 The various steps in a process being performed in accordance with the needs of the next process rather than in some
pre-determined linear form.
 Processes having several versions to deal with differing customer requirements
 Work is performed where it makes most sense.
 A reduction in the number of checks and controls insisted on during the process.
 The minimization of reconciliations (e.g. of orders) between customers and suppliers.
 A single point of contact with the customer
 Hybrid centralized / decentralized operations prevail.
 8.12.2. The Structural Changes Likely in a BPR

These are
 Work structures move away from functional departments towards process
some teams.
 Employees are empowered to act in ways that were previously controlled by rules
 Empowerment implies a willingness and an ability to accept greater responsibility for work outcomes
 Preparation for work implies a greater emphasis on education (i.e to understand the why) rather than on training
(understanding the how)
 The focus for performance and payment shifts from activities to results
radical (expressed in terms of value created for the customers).
 Advancement within the organization is more likely to be based on the
ability to undertake the work rather than on performance in the current job.
 A culture change will occur in which the typical employee will see the
hat take customer as more important than the boss.
 Organizational structures are likely to become flatter and bureaucracies less
critical.
 Senior executives assume the role of culture leaders than financial score
cards
 The role of IT (Information Technology) will be vital in facilitating the reengineering process. The personal computer,
the photocopies, the fax machine,
 e -mail, and the mobile phones, all show the importance of IT in facilitating the BPR processes.


 8.12.3. The Shortcomings of the BPR

BPR has been challenged on the following grounds:
 Much of what passes as BPR is not so much of process
engineering, but process simplification, is process led
rather than vision led, is not revolutionary just an
improvement of existing systems, and works with
existing systems rather than challenging them.
 BPR as practiced makes people work harder, than smarter
 It is used as a tool of downsizing
 Hence people become victims rather than beneficiaries
 The drive to please the customer rather than the boss can
lead to dysfunctional consequences to the organization.

8.13. Ambidextrous Approach
to Organizational Change

 8.13.1 Meaning
 In an ambidextrous approach to change, the
change agent incorporates structures and
management processes that are appropriate
to both the creation and the use of the idea of
change. For example the organization can
behave in an organic way (or create organic
structures) during the innovation and creation
of new ideas, and then adopt mechanistic
structures when the change is being
implemented.  

8.13.2 Justification
Organic structures such as decentralization
and low formalization encourage creativity
and innovation. On the other hand,
mechanistic structures such as high
centralization and high formalization stifle
creativity, with emphasis on rules,
procedures and regulation but results in
efficiency and effectiveness.

 8.13.3 Techniques for Encouraging Ambidextrous Change in
Technology Change
 Switching structures: This means that an organization creates an
organic
in structure when such structure is intended for the innovation of new
ideas, and
reverts to mechanistic structures during the implementation of the
changes.
 Creative departments: In some organizations, the creation of new
ideas is
assigned to separate departments for adoption by other departments.
Departments that initiate change are organically structured to
facilitate generation of new ideas and techniques. Departments that
are supposed to implement those changes tend to have mechanistic
structures so as to achieve efficiency in the implementation.

 Venture teams: These teams encourage creativity. The
teams are often given a separate location and facilities
so that they are not constrained by organizational
procedures. The teams may be given total license to
establish new venture projects for any department.
 New venture fund: A fund is created to provide financial
resources for employees who can develop new ideas,
products or business. Employees are given leave and
resources to go out of the organization and create new
business opportunities for the organization. Employees
can also use company labs and equipment to develop a
business idea. If the idea is successful, the company
can provide the necessary financial resources to start
-up the business.

Corporate entrepreneurship: Here the
company attempts to develop internal
entrepreneurial spirit, philosophy, and
structures that will produce a higher than
average number of innovations
ORGANIZATION CULTURE

9.1 Introduction
In this lecture we shall explain the meaning
of culture, its importance and its
dimensions. We shall also discuss the
relationship between culture and also
propose methodologies of increasing
culture in an organization. 

9.3 Meaning of Culture

 Organization culture is a pattern of values, beliefs and

customs shared by members of an organization or
group. It is often unspoken, but is clearly understood by
members of the organization. It dictates how members
are to behave. It is also unwritten. All organizations
have culture, which has emerged over time. Culture
generally evolves over time and begins with a founder
or early leader who articulates and implements
particular ideas and values as a vision, philosophy or
business strategy. When these ideas and values lead to
success they become institutionalized and an
organization culture emerges that reflects the vision
and strategy of the founder or leader. Over time, culture
becomes artifacts, stories, symbols and language of the
organization.  

 9.3.1 Artifacts

These are the obvious features of an
organization that are immediately visible to a
new employee. They include sounds, behavior,
language, products, rites and ceremonies.
Rites and ceremonies are the elaborate,
planned activities that make up a special
event, and are often conducted for the
benefits of an audience.

 9.3.2 Stories
 These are narratives based on time events that are
frequently shared among organizational employees
and told to new employees to inform them about
an organization. Many stories are about company
heroes who serve as models or ideals for serving
cultural norms and values. Some stories are
considered legends because the events are
historic, and may have been embellished with
fictional details. The stories are myths, which are
consistent with the values and beliefs of the
organization but are not supported by facts.

 9.3.3 Symbols

A symbol is something that represents other
things. Rites and ceremonies are symbols but
symbols generally refer to physical aspects of
culture.

9.3.4 Language
 Language refers to sayings, metaphors and
other forms of language used to convey
of the special meaning to employees.

9.4. Importance of Culture

Culture provides members with a sense of

organizational identity and generates
and commitments to beliefs and values.
Culture integrates members so that they
know how to relate to one another. Culture
also helps the organization to adapt to the
external
comes environment.
 

9.5 Organizational Design
and Culture

The culture of an organizational should

reinforce the strategy and structural
design that
a new the organization needs to be
effective within its environment. That is to
say if the external
Rites environment requires flexibility and
responsiveness the culture should
encourage
are adaptability.

9.6 Dimensions I Categories I
Types of Culture

 The organization culture can be differentiated into four

categories based on the extent to
which the competitive environment requires flexibility or
stability and the extent to which
the strategic focus and strength is internal or external. These
categories are:

(i) Adaptability / entrepreneurial culture
 This type of culture is categorized by strategic focus on the
external
environment, through flexibility and change to meet customer
needs. This type of culture encourages norms and beliefs that
support the capacity of the organization to detect, interpret
and translate signals from the external environment into new
behavior responses. Innovation, creativity and risk- taking are
valued and rewarded.  

 (ii) The Mission Culture
 This type of culture is characterized by emphasis on a clear
vision of the organization purpose and on the achievement of
goals, such as growth, profitability or market share, to help
achieve the purpose. A mission culture reflects a high level of
competitiveness and profit making orientation. Its
environmental characteristic is stability.

(iii) The Clan Culture
 Has a primary focus on the involvement and participation of the
organization’s members. Emphasis is on the needs of
employees as a route to high performance. Involvement and
participation are assumed to create a sense of responsibility
and ownership, which would lead to greater commitment to
the organization. Its external environment is stable and
therefore requires less flexibility.

 (iv) The bureaucratic culture
 In this type of culture, symbols, heroes and
ceremonies support cooperation, tradition and
following established policies, and practices as
a way to achieve goals. The organization
succeeds by being highly integrated and
efficient. There is a high level of consistency,
conformity and collaboration among members.
 Strategic focus is internal rather than external
and the external environment requires stability
rather than flexibility.

9.8 Changing Organization
Culture

 Cultures do change. As the external and internal factors that affect or

influence culture change, so culture will change. However, because
culture is locked up in people’s beliefs, values and norms, cultural
change will be slow and may not change in the same fashion
or speed required to keep up with changes in the environmental
factors. Since a successful culture is one based on values and
assumptions appropriate to the environment to keep up with rapidly
changing external environment, the culture must therefore change
of the or be changed appropriately. Cummings and Worley (2001)
propose six practical steps a route for achieving cultural change as
follows.
 Formulate a clear strategic vision. Effective cultural change should
start greater form a clear vision of the firm’s view strategy and of the
shared values and le and behavior needed to make it work.
 Display top management commitment — Cultural changes must be
managed from the top of the organization; senior managers need to
be committed to the new values.

 Model culture change at the highest level — Senior management
must communicate the new culture through their own actions.
 Modify the organization to support the culture changes — Cultural

change must be accompanied by applying modifications in

organizational
structure, human resource systems, information and control systems,
and management styles.
 Select and socialize newcomers and terminate deviants — One of
the most effective methods for changing culture is to change
organizational membership. People can be selected in terms of their fit
with the new culture.
 Develop ethical and legal sensitivity - Most cultural change
programs attempt to change people’s integrity and values. When
implementing cultural change programs, organizations need to be
aware of ethical and legal pitfalls. In other words, care should be taken
to follow equity, ethical, and legal methods.


ORGANIZATIONAL GROWTH
AND DECLINE


10.1. Introduction
In this chapter, we are going to define size,
growth and decline. We also discuss two
models of organizational growth and
propose strategies for dealing with decline.

10.3 What is Organization
Size?

 Organizational size can be measured in many ways

including:
 Market share — organizations that dominate the market
place are considered large.
 Number of branches: organizations with many branches in
several towns are considered to be larger than single
branch organizations.
 Number of products: organizations with varied products
are considered larger than those with few products.
 Asset size is also considered as a measure of size.
 Number of full —time employees can also be used as a
measure of size.

Use of full-time employees as a
measure of size
Using the number of employees as a
measure of size because it is simple to
understand, is the most commonly used.
All organizations have employees or
people and it is a less subjective measure
than many of the other measures.

10.4. Organizational Size and
Complexity


 When organizations grow in size the organization complexity as

measured by the following measures also increases
 Formalization
 Formal communication in terms of rules, written procedures etc increases

 Differentiation — this is the process of dividing the work of the

organization into manageable units. This may include
 Vertical differentiation — differentiation on hierarchal levels
 Horizontal differentiation — differentiation on functional departments
 Specialization- concentration of tasks into specialist areas
 Routinization — development of a set of routines for the performance
of work

 More impersonal work environment
More impersonal atmosphere in the work place
Friendship groups tend to be limited to a few co-
workers
 Less direct involvement by the chief
executive: In small organizations the
entrepreneur is involved or takes part in all
operations. As the organization grows, this is
no longer feasible and delegation becomes
absolutely necessary.

10.5. Organizational Growth

10.5.1 What is growth?

 Growth is the increase in size for an organization.
The motives for growth (why do firms grow)
include: adventure and risk, prestige power and job
security, increases compensation, organizational
self-realization, to achieve a stable environment,
organizational survival, increased profits, increased
revenue, decreased costs via economies of scale,
and to achieve monopolistic power.
 10.5.2 Growth Models

1 Lippitt — Schmidt model
 This model suggests that organizations normally experience
three stages in their development i.e. birth, youth, and
maturity. As an organization enters each of these stages it
encounters a predictive series of critical crises accompanied
by recognizable key issues and results. A true measure of an
organization’s stage of development is best gained through
analysis of how it handles predictable organizational crises,
rather than through simply making judgments based on its
age or economic size. Consequently, a relatively small or
newly founded organization may rapidly achieve
developmental maturity, and a relatively large (or
comparatively older) organization remain youthful.

 2. Larry Grainer Growth Model
 Greiner observed that organizations often go
into trouble when the specific structure was
not appropriate to the organizations stage of
growth and development; He identified five
phases through which organization pass
through in their growth. For each phase there
was dominant issues and crises that faced a
growing organization.
 

 Phase 1 Creativity
 The organization is born. Emphasis is on creating a product and
surviving in the market place. The founders are entrepreneurs
and they devote full energies to the technical activities of
production and marketing. The organization is informal and
non- bureaucratic. Control is based on the owners’ personal
supervision.
  
 Leadership crisis: when the organization starts to grow, it faces a
leadership crisis because founders are not skilled or interested
in management activities. They may restrict growth. A strong
manager, who can introduce good management techniques is
needed. If the leadership crisis is resolved, the organization
grows into the next phase.

 Phase 2 Direction
 New management systems and clear organizational structures
are introduced to guide the organization into more growth.
Departments are established along with a hierarchy of
authority, job assignments, and 4livision of labor.
Communication may become more formal. Elements of
bureaucracy become apparent.
  
 The Autonomy crisis If the new management structures and
techniques are successful lower level employees find
themselves restricted by the strong leadership and increasing
bureaucracy. Lower level managers begin to acquire
confidence in their own functional areas and want more
discretion. The autonomy crisis occurs when top managers do
not want to give up responsibility

 Phase 3 Delegation
 For the organization to grow into this phase, it must overcome the
autonomy crisis. Top management must delegate responsibility and
decentralize decision making. Top management becomes concerned
with top management issues such as strategy and planning and
leaves the operations of the firm to lower level management. Internal
control and information systems are installed and used.
Communication is less -“““ and more formal. New products and new
employee’s specialists may be added.

 The control crisis: as middle and lower — level managers become

more autonomous, top executives feel that they are losing control of
the organization. In order to overcome the crisis, new techniques to
coordinate the increased number of departments and activities must
be found.

 Phase 4 Coordination
 The response to the control crisis is sophisticated techniques of
coordination. Staff personnel and specialists are required to
review company wide programs. Product groups or other
decentralized units may be formed to improve coordination.
Incentive systems based on profits may be implemented to
ensure that managers work towards what is best for the
overall company. If the new systems are successful, and
effective, the organization will grow to the next phase
 The red — tape crisis: the proliferation of systems and
programs may begin to frustrate middle level executives. The
organization may become over-bureaucratized. The
organization may seem too large to manage through formal
program.

 Phase 5 Cooperation
 The solution to the red tape crisis is a new sense
of collaboration and cooperation. Managers
develop skills for confronting problems and
resolving interpersonal differences and
conflicts. Formal systems may be simplified
and partially replaced by manager
conferences and task forces.

and other Organization
Characteristics

 Greater organization size is associated with

 Increased number of management levels (vertical
complexity)
 Greater number of jobs and departments (horizontal
complexity)
 Increased specialization of skills and functions
 Greater formalization
 Greater decentralization
 Smaller percentage of top administrators
 Greater percentage of technical and professional
support staff.

 11.1 Introduction
 In this lecture we are going to define power and politics in
organizations and explain how power is used to achieve
organization, group and individual interests.

11.3 Definition of Power
 Power is defined as the possession of the potential for
influencing others or the ability to act or produce some effect.
Power is the probability that one actor within a social
relationship will be in a position to carry out, his own will
despite resistance, regardless access to information and
resources within the organization. Individuals and groups will
use power and political activity to handle their differences and
manage
conflict.


Organizational


 power is often the results of structural characteristics.

 Organizations are large complex systems that contain hundreds even thousands of people. These
systems have a formal hierarchy in which some tasks are more important regardless of who
performs of the basis on which this probability rests. Similarly, power is also defined as an
actor’s ability to induce or influence another actor to carry out his directions or any other
norms he supports.

Hodge and Anthony (1985) also define power as the ability (potential or actual) to impose
one’s will on others. It is the ability of one person to affect the behavior of someone else. The
author identifies five bases of power. These are reward power, coercive power, legitimate
power, referent power and expert power. These bases are explained below.
  
 All organizations are a complex mix of individuals and groups pursuing various goals and
interests. Conflict is a natural and inevitable outcome of the close interaction of
people who may have diverse opinions and values, pursue different objectives and have
differential them. In addition some positions have access to greater resources or their
contribution to the organization is more critical. Thus organizational power is vested in the
position not in the person.


Authority
is a form of power which is prescribed by the
formal hierarchy and reporting
relationships. Authority has three
properties viz;
It is vested in organizational positions
It is accepted by subordinates
It flows down the vertical hierarchy.

Vertical Sources of Power

 All employees along the vertical hierarchy have access to some

sources of power. There are three sources of vertical power;
 Formal position-Certain rights, responsibilities and prerogatives
accrue to the positions one holds in the organization. The
amount of power provided to each position is prescribed into
the organization’s structural design. Allowing
people to make their own decisions increases their power.
Access to powerful people in the organization also increases
ones power.
 Resources-Access to resources and having resources is power.
Resources can be used as rewards and punishments. Resource
allocation also creates a dependency relationship.
 Network centrality-Network centrality means being centrally
located in the organization and having access to information
and people that are critical to the company’s success.
Horizontal Sources of Power

Horizontal power pertains to relationships

across departments. Horizontal power is
not defined by the formal hierarchy or the
organization chart. Each department
makes a unique contribution to
organizational success. Some departments
will have greater say and will achieve their
desired outcomes faster than others. The
theoretical concept that explains relative
power is called strategic contingences.

Strategic Contingences
 are events and activities both inside and outside
an organization that are essential for attaining
organizational goals. Departments involved
with strategic contingences for the
organization tend to have greater power.
Departmental activities are important when
they provide strategic value by solving
problems or crises for the organization. For
example, if an organization faces an intense
threat from law suits and regulations, the legal
department will gain power and influence over
organizational decisions because it copes with
such a threat.

 Other sources of organizational power include;
 Dependency-Interdepartmental dependency is a key element underlying relative
power. When eight departments must come for help to the engineering
department, engineering is in a strong power position. In contrast, a department
that depends on many other departments is in a low power position.
 Financial resources-control over various kinds of resources and particularly
financial resources is an important source of power in organizations. Money can
be converted into other kinds of resources that are needed by other
departments.
 Centrality-centrality reflects a department’s role in the primary activity of an
organization. One measure of centrality is the extent to which the work of the
department affects the final output of an organization. Centrality is associated
with power because it reflects the contribution made to the organization.
 Non substitutability-this means that a department’s function cannot be
performed by other readily available resources. If an employee cannot be easily
replaced, his or her power is greater.

Coping with Uncertainty
 . Uncertainty means that decision makers do not have sufficient
information about environmental factors and they have a difficult time
predicting external changes. Uncertainty increases the risk of failure
for the organizational response and makes it difficult to compute costs
and probabilities associated with decision alternatives. In the face of
uncertainty, little information is available to managers on appropriate
courses of action. Departments that cope with this uncertainty will
increase their power. Just the presence of uncertainty does not provide
power; reducing the uncertainty on behalf of other departments will.
Forecasting is one technique for coping with uncertainty. Sometimes
uncertainty can be reduced by taking quick and appropriate action
after an unpredictable event occurs. Other techniques departments
can use to cope with uncertainties include; obtaining prior information,
Prevention and Absorption.

 Obtaining prior information means a department can
reduce an organizations uncertainty by forecasting an
event.
 Departments increase their power through prevention by
predicting and forecasting negative events.
 Absorption occurs when a department takes action after
an event to reduce its negative consequences.

Reward power is defined as power whose basis is the
ability to reward. The strength of the reward power one
person holds over another increase with the magnitude
of the rewards the latter perceives the former can
mediate for him.

 Coercive power involves one person’s ability to
manipulate the attainment by another of positive
(or negative) rewards. The coercive power of one
person over another stems from real or imagined
expectation on the part of the latter that he will be
punished if he fails to conform to the influence.

Legitimate power stems from internalized values
in a person that dictate that another person has a
legitimate right to influence. The actual source of
this legitimate power and the reasons subordinates
feel they ought to obey might be tradition or may
derive from the office the supervisor holds.

 The referent power is based on the fact that one person
identifies with and is highly attracted to another.
 Finally expert power derives from the fact that one person is
viewed as an expert in some area and others MUST therefore
depend on him for advice and counsel. Expert power in an
organization often stems from a person’s position in the
communication network and from that person’s ability to
control access to coveted information.

Power is an important concept in organizations as individuals
exert power to get things done. Power, once gained usually
confers major benefits on those who hold it. Such persons can
change the actions of many other people. In addition they
often acquire high degree of status, with all respects, prestige
and perks this implies. Given such outcomes, many people in
an organization invest considerable time and energy to power.

11.4. Effects of Power on its
Holders

 Power exerts strong effects upon those who hold it and those over whom it is
exercised
In addition power affects a wide range of key organizational processes. An
example o
such processes is negotiation. The most obvious way in which power can affect
negotiations is through differential possession of this capacity in opposing sides.
To the extent one party to negotiations has an advantage in this respect it can
shape the course of the exchange, and obtain an agreement favorable to itself.
Another way in which power can affect negotiations concerns the relationship
between negotiators and their constituents — the people they represent. If the
persons representing an organization in a beginning situation are low in power,
they will have to answer for their actions during negotiations. As a result they
may feel constrained, and adopt cautious or defensive strategy. In contrast, if
negotiators are high in power, they will be protected from such censure and
may feel free to choose a more flexible and open approach. The result is that
negotiations involving high power representatives from both sides may be more
successful and more efficient than negotiations between persons of lower
power.

11.5. Organizational Politics

 Organizational politics can be defined as any actions taken by individuals

or groups to gain power and so secure goals and outcomes that they
personally desire. In other words politics is selfish in its orientation.
Indeed this element of using or gaining power to further one’s own or
groups’ self-interest is one of the major factors distinguishing politics
from other more legitimate uses of power. Politics is one way of using
power- for personal or group gain.

In most organizations, politics is common. In fact, organizations
appear to be highly political environments in which various persons,
groups and units are constantly jockeying for position and power.. As a
result promotions, salary raises and other rewards are not always
distributed solely on the basis of merit. Major decisions are not always
made on the basis of careful study of all available data. And the
principles of fair play and rationality do not always serve as the
guiding precepts. Instead, “politics rules and rules with a
vengeance” (Baron 1980).

Approaches to Organizational
Politics

 There are two approaches to defining politics. One is the

negative approach. In this approach, politics is seen as self-
serving, and involves activities that are not sanctioned by, nor
in the interest of the organization. In this view politics involves
deception and
dishonesty for purposes of individual self-interest and or for
group interest without regard to organizational interest. In this
view politics leads to conflict and disharmony within the work
environment. This view of politics is widely held by lay people.
Studies have shown that workers who perceive this kind of
political activity at work within their companies often have
related feelings of anxiety and job dissatisfaction. Studies also
support the belief that inappropriate use of politics is related
to low employee morale, inferior organizational performance
and poor decision making.

11.6 Techniques Used in
Organizational Politics


People gain and exercise power in organizations in many ways. Among
them includes:

(i) Coalitions — forming the right alliances
 This involves joining forces with persons or groups who have something
to contribute and who can be relied upon. To get such a group or
persons requires search.

(ii) Choosing a powerful mentor
 Having an experienced and powerful mentor is beneficial to the group or
individual seeking this relationship and can be an effective tactic for
acquiring power and reaching important goals. Since there are many
more would be protégés than there are openings for them,
competition in this regard can be intense:. However, given the
substantial benefits yielded by the protection and guidance of a
powerful mentor, efforts to establish such a relationship are well
worthwhile
 (ii) Projecting the right image
 This includes demonstrating a high level of competence,
adopting a co-operative attitude and displaying good
behavior. For this reason, polishing one’s image often yields
valuable dividends where organizational politics is concerned.
In fact, the old adage “nothing succeeds like success” is very
applicable to organizational politics.

(iv) Establishing control over access to information
 This is another highly effective tactic for gaining power that can
be used both by individuals and by groups. This involves
gaining control over vital information. Since information is the
life blood of organizations, any one who can control its flow or
access to it, acquires considerable power.
 (v) Co-optation — neutralizing opponents
 This tactic involves bringing people whose support is desired and
who currently stand in the group’s way into the fold. Once
they are made part of the group they become part of it,
subject to its norms, and often adopt its values and goals.

(vi) The use reciprocity
 A guiding principle of all human relations- whether between
individuals or groups
— seems to be reciprocity. In general people treat others as
they have been treated previously. By doing favors to others,
or supporting them against opponents, it is possible to place
them in one’s debt, then at appropriate times (when their
assistance is needed most) reciprocity can be invoked and
requests for repayment made.

 vii) The use of ‘dirty tricks’
 This refers to strategies that most people view as deceitful,
underhanded and dishonest — ones that violate the ethical
principles of human beings. Included among dirty tricks are
such steps as:
 Falsely attributing blame for negative outcomes to others
(holding them responsible for events they did not produce).
 Announcing one agenda for meetings, but then following a
totally different hidden one thus preventing opponents from
being adequately prepared.
 Restricting the flow of information to others or providing them
with “misleading facts”.
 Spreading false rumors about their personal lives, lack of
commitment to the organization etc.

on the Ethics of
Organizational Politics

 As noted above some of the tactics in acquiring power in

organizations can be quite ethical while others are quite
unethical.
 Some tactics are manipulative, dishonest and in some cases
even illegal. Others are quite reasonable and even desirable
such as coalitions and co-optation. Such situations leave us
with one issue: when are efforts to acquire and use
power through organizational politics justified, and when
are they inappropriate? The following principles suggested
by Cavanaugh, Mob erg and Velasquez (1980) offer some
general guidelines in this regard.
 Whenever the use of politics is contemplated, the following
questions about their ultimate purpose should be addressed:
are they designed to further purely selfish ends or will
they help to promote organizational goals and values as
well? To the ‘extent the former applies, the use of such tactics
is unethical.

 The impact of political behaviors upon the rights of individuals
should be addressed. To the extent such tactics violate
basic human rights, they are unacceptable.
 The relationship of political behaviors to principles of equity and
fair play should be considered. Almost everyone likes to feel
that they will be judged by their merit. Further most persons
like to behave that although all individuals would not finish
together they can at least begin from the same point and run
the same course. By their very nature political actions run
counter to such views. Indeed in an important sense, their
ultimate aim is that of establishing two sets of rules one for
those in power and another one for those without it. To the
extent that political tactics operate in this manner, and
directly conflict with the principles of fairness and
justice, they are unacceptable.
12.1 Introduction
In this chapter we shall define conflict,
competition and cooperation. We shall also
discuss the functions and the dysfunctions
of the three behaviors and attempt to
compare and contrast cooperation and
competition with conflict. We shall discuss
the sources / causes of conflict and
propose some principles of managing
conflict.

12.3. Definition of Conflict


Conflict refers to the interactive, opposing behaviors between
two or more people, groups or larger social systems having
incompatible goals. Conflict is usually experienced as
troublesome if not disruptive. Conflict ranges form
disagreements, debates, to physical confrontation, murder,
and or annihilations (elimination) i.e. can be presented in the
form of a continuum) Conflict may be overt or covert,
perceived or actual, non-verbal or verbal, active or passive,
manifest or latent.
There are five levels of conflict:
 Level I Intra-individual conflict
 Level II Inter personal conflict
 Level III Inter group conflict
 Level IV Organizational conflict
 Level V Conflict between larger social systems  

12.2 Objectives

 At the end of this lecture, the student will be able to:-

 Define conflict, competition and cooperation
 Explain the functions and dysfunctions of conflict
cooperation and competition
 Discuss the basic ways of managing conflict in
organization.
 The main causes of inter group, organizational, and larger
social systems conflicts are
 Intra-Individual conflict
 Inter personal conflict
 The main cause of interpersonal and intrapersonal conflict
is stress. Thus in order to understand conflict one must
understand stress.



What is intra-individual
conflict

 Opposing behavior between different sub-

systems of an individual
 Can be caused by stress
 Can also be caused by the following
Conflict due to frustration. Frustration occurs
when a motivated drive is blocked before a
person reaches a desired goal. The barrier may
be either overt (outward, or physical) or covert
(inward or mental)

 Example
Need drive Goal
 Goal Conflict: Three separate types of goal conflicts can be
identified.
 Approach - approach conflict - where the individual is
motivated to approach two or more positive but
mutually exclusive goals.
 Approach - avoidance conflict - where the individual is
motivated to approach a goal and at the same time is
motivated to avoid two or
more negative but mutually exclusive goals
 Avoidance - avoidance conflict - where the individual is
not clear about what role he is supposed to play in his
different capacities in an organization.

Interpersonal Conflict
 : There are four major sources of interpersonal conflict.
 Personal differences: This refers to differences in
upbringing, cultural and family traditions, and socialization
processes, education, values etc. These differences cause
conflict among organizational participants.
 Information deficiency: This may be a result of
misinformation or communication breakdown.
 Role incompatibility: This may arise when the
organizational participants are expected to perform
incompatible roles in an organization. For example, a sales
manager may be required to increase sales which means
increasing output and stock levels. The production manager
may be required to reduce stock levels to reduce costs. This
may be a cause of interpersonal conflict.
 Environmental stress: In an environment characterized by
scarce or shrinking resources, downsizing, competitive
pressures, high degrees of uncertainty, etc, interpersonal
conflict could be amplified.
 

Inter group conflict

 Inter group conflict arises when individuals belonging

to one group interact, collectively or individually,
with another group or its members in terms of their
reference group identification.
Causes of Inter group Conflict
 Competition for resources
 Task interdependence
 Jurisdictional ambiguity
 Status struggles — this conflict occurs when one
group attempts to improve its status, and another
group views this as a threat to its place in its status
hierarchy.

 In an inter group conflict the following conditions prevail:
 There is a clear distinction between “we” and “they”
 A group that feels that it is in conflict with another group
becomes more cohesive and pulls together to present a solid
front to defeat the other group
 The positive feelings and cohesion within the in-group do not
transfer to the members of the out-group. The members of
the out-group are viewed as the enemy rather than as
neutrals
 Threatened group members feel superior - they over-estimate
their own strengths, and underestimate that of members of
other groups
 The amount of communication between conflicting groups
decrease. When there is communication, it is characterized
by negative comments and hostility.
 If a group is loosing in a conflict, the member’s cohesion
decreases and they experience increased tension in
themselves. They look for a scapegoat to blame their failure
on.

12.4 Competition

 Competition refers to rivalry between two or

more organizations which is mediated by a
thrilled party. In business, the third party4 may
be a customer, a supplier of raw materials, or
distributor, or potential employee. In a free
market system, competing organizations
attempt to influence third party decision
through various appeals and offerings. A third
party choice may be viewed as a vote of
success for one of the competing
organizations.

12.5 Cooperation

 12.5.1 Management of Conflict

 Cooperation consists of mutually reinforcing or supportive behaviors between two
or more people, groups or larger social systems. The behaviors may steal from a
perception that collaboration will help obtain mutual goals, or just from
predisposition to behave this way. Cooperative behavior may be verbal, or non-
verbal or both. Cooperative behavior is usually active, although there may be
degrees of competition. The groups, individuals or larger systems work together
in order to enhance, the outcomes received by each. Assistance is two way or
reciprocal in nature.
 Example
 workers work together to lift a heavy load
 managers use their expertise to reach an important decision
  
 The persons, groups or units involved coordinate their actions in order to reach
goals and levels of performance they could not attain alone. Once the mutually
desired goals are reached the benefits are shared among the parties in some
agreed manner. Cooperation often pays, for all concerned. Cooperation results
in synergistic benefits to all.

12.6 What Happens During
Competition /Conflict?

 In general the following development can be expected in

groups competing for goals that only one group can
attain, such as writing a contest or attaining a
particularly attractive reward of some trend.
 A WE —VERSUS — THEY constellation of attitudes and
feelings forms Both groups take pride in the group’s
accomplishments and make favorable evaluation of
“our” group in contrast to favorable or less negative
evaluations of characteristics of other groups.
 Each group has distorted perceptions and judgments
about the other group
Favorable information about the other group is either
ignored or interpreted in favor of one’s own group

 The performance of one’s own group is over
estimated, and the performance of the other group
is underestimated
 Each group sees the other as the enemy. In addition
to making disparaging remarks within ones own
group about the other groups, contact with the
other group is frowned upon and generally
avoided. A great deal of energy is used to outwit
the enemy
 Group solidarity, cooperation and morale increases If
the odds are not over whelming i.e. - groups in
conflict or competition become more
cohesive and mutual help increases

 Negative perceptions and feelings carry over into
noncompetitive situations
 Information is used to erode the position of the other
group. When negotiations or intermediaries are used to
negotiate between two groups in conflict information
supplied by group members to their and
representations is aimed at improving the relative
position of ones group are rather than at clarifying
matters or enhancing communication
 Representatives may become either ‘heroes’ or traitors.’ A
representative who is negotiating with the other group
and who gives in too readily to the position of the other
group is branded a traitor
12.7 What Happens after the
Competition /Conflict?


The following things happen to the winning group after the context is order
 The winning group tends to be joyful, self-congratulatory, and reveal in the glow of
victory.
 The role of the leader(s) is enhanced. Leaders are congratulated, their status is
enhanced, and group members are even more willing to follow
their leaders in the future.
 The wining group becomes complacent. Characteristically the winners bask in their
success and do not critique their performance. They do not examine in what
respects their performance might improve for future situations. They become
fat and happy.
 The winning group has little empathy for the losers. The winners typically cannot
understand why the defeated group is so defensive and sullen. Further they
cannot understand why the other group takes the matter so seriously.
  

12.8 What Happens to the
Losing Group?

 The following things happen to the loosing. group.

 Gloom settles over the loosing group — the members of the
losing group tend to be gloomy more so and subdued.
 The judges are seen as unfair. The judges who hard done the
decision are frequently perceived by the losing groups as
biased, unfair, and incompetent, and having no grasp of the
problem. They are wrong, not group.
 The leader(s) lose in status and influence and status of the
leader(s) decline dramatically. Feelings may sometimes run so
high that the leader or negotiator is deposed or resigns.
 Some critique of what happened readily occurs. There is some
attempt to assess the reason for defeat, but considerable
blaming of the circumstances or
the judges or of each other can occur.

 Recriminations may occur within the losing group. In
the losing group, mutual blaming for the defeat
frequently occurs. The persons blame one another,
and other group members support the criticism or
defend the person attacked. Recriminations may
proliferate for a while, with some disorganizing and
splintering occurring. Sometimes the splintering
leads to group dissolution.
 The losing group has little empathy for the winning
group. They see the celebration of the other group
as excessive and they resent their self
congratulatory behavior.

12.9 Functions and
Dysfunctions of Conflict

 12.9.1 Functions of Conflict

 Conflict and competition are the vehicles for surfacing and resolving
disagreements and different points of view
 Conflict can help redefine a group’s or organization’s mission and can also help
review group norms
 Some levels of conflict can also provide an energizing and vitalizing dimensions to
organizational life
 Conflicts can also
 Lead to production of better ideas
 Lead to search for new products
 Lead to better clarification of news.
 . Conflict can also lead to group solidarity and cooperation against the other group
 Conflict can lead to morale and increased productivity

 12.9.2 Dysfunctions of Conflict
 Can lead to physical harm or even killings
 Can lead to destruction of property
 In a work environment conflict can make people too upset to
work
 Can lead to break down or distortion of communication
 Conflict can also lead to stress (both emotional or physical)
 Can produce excessive levels of tension anxiety and stress
 Can drive out people who cannot tolerate high levels of conflict
 Can reduce trust, leading to antagonistic interactions. This can
lead to withholding /distorting of information by one party.
 Low conflict fails to encourage new ideas or tolerate different
points of view. This leads to poor decisions made with poor
information


Dysfunctional Consequences
of Competition

  
 12.10.1 Functional Consequences of Competition
 Competition encourages creativity, lowering of prices, and
quality production. Within groups, it encourages effectiveness
and efficiency. Within larger social systems, it encourages
creativity, innovation and effectiveness. Competition
therefore:
 promotes and encourages creativity and innovation
 clarifies differences between people or groups
 motivates
 increases group solidarity
 after the win, may result in group friendship and cooperation
  Dysfunctional Consequences of competition may
lead to the:
 development of a we versus they attitudes
 distorted perceptions and judgment about the other
groups
 each group sees the other as an enemy
 misinformation about the other group
 the wining group might become complacent
 the loosing group might become gloomy leading to
loss of morale and drive

Dysfunctional Consequences
of Cooperation

 12.11.1 Functions of Cooperation

 Shared benefits
 Increased outcomes (synergy)
 Peace and stability within or between group

12.11.2 Dysfunctional Consequences of
Cooperation
 Complacency
 Lack of creativity and innovation
 Failure to adopt change

12.12 Differences between
Conflict and Competition

1. Incompatibility of goals

In conflict, there is incompatibility of goals
between parties while in competition there
compatibility of goals between parties
2. Opposing behavior
In conflict, behavior is entirely (or mostly),
opposing while in competition, there is
some opposing behaviors and some
cooperative behavior

3. Rules
In conflict there are few or no rules of
behavior while in competition rules exist

4. Willingness to enter
In conflict one or both parties may be drawn
or forced into the conflict while in
competition usually both parties enter
willingly
beneficial, why don’t people,
groups or units cooperate?

 The main reason is that the goals sought by the groups or individuals
cannot be shared for example if two people are seeking the same
promotion, they cannot cooperate to attain it. In many cases
therefore, competition or conflict is the result.
• The other reason is that many valued goals in organizations (e.g.
status, power promotions etc,) are in short supply and are sought by
many more persons or units than can hope to attain them:
cooperation is scarce, whereas competition and conflict are the norm.
 The other reason is that in many instances the individuals or groups may
find that they have an alternative to cooperation. They can either
choose to cooperate to achieve mutually desired goals, or they can
work on their own to achieve the desired goals.
 Reciprocity: people treat others the way they are treated rather than
treating others the way they would have others do to them.
 Communication: in many situations where cooperation could develop,
but it does not, its absence is blamed on failure to communicate.

 Group size: as the number of individuals rises,
the level of cooperation drops. Several factors
contribute to this outcome.
 The greater the number of persons, the greater
the possibility that one will be totally selfish,
exploitative or simply uncooperative.
 As groups increase in size communication
among their members, becomes more difficult.
 As the number of individuals increases, diffusion
of responsibility develops such as pass - the
back

12.14 Comparison between
Conflict and Cooperation

 12.14.1 Differences.
 Cooperation has largely positive consequences at least for the parties
involved while conflict has both positive and negative consequences
 Cooperation consists of mutually reinforcing or supportive behaviors
between two or more people, groups or larger systems while conflict
consists of opposing behavior.
 Cooperative behavior stems from a perception that collaboration will help
obtain mutual goals, while conflict sterns from a perception of
conflicting goals.
 Cooperation may stem from a predisposition to behave this while conflict
is largely caused by perceived or actual goal incompatibility.
 In cooperation, since each of the parties involved is obtaining something
desirable, or expects to, there is little reason for the behaviors or be
sub rosa. Therefore cooperative behavior is open and disclosed to all
parties who may wish to hear or know about the cooperation; conflict
is usually sub-rosa.

 12.14.2 Similarities
 Cooperative behavior, like conflict behavior may be
verbal or nonverbal or both.
 Both conflict and cooperation can be functional or
dysfunctional
 In both conflict and cooperation, there are at least
three parties to the situation.
 In both conflict and cooperation, behaviors are
interactive in the sense that it is between at least
two people and there is usually more than one
cycle of behavior and counter behavior.
 Both conflict and cooperation can be considered as
parts of a continuum

12.15 Conflict Management
Model

 12.15.1 The management of conflict requires that when conflict

is dysfunction ally high, the manager tries to reduce it and if
the conflict is dysfunction ally low, he tries to increase it. In
the same way a thermostat maintains a desired room
temperature, conflict management maintains a desired
conflict level.
 Signs of a dysfunction ally high conflict are:
 Low trust in a work unit
 Deliberate distortion of information
 High levels of tension during interpersonal interactions
 Antagonism between parties
 Sabotage
 Violence between the parties

Symptoms of dysfunction ally low conflict are:


 Suppression — includes denial of differences, a

desire to perceive similarities between parties
that do not exist, repressing controversial
information, and prohibiting disagreements
about legitimate issues.
 Withdrawal — reduced communication
avoidance of interactions, the belief
in” peace at any price” and walking away from
a disagreeable interaction.

 12.15.2 Reducing Conflict
 When conflict increases to dysfunction ally high levels, managers must develop
techniques for reducing it to acceptable levels. There are three approaches to
reducing conflict in organizations. These are: win-lose, lose-lose, and win-win
 Lose-lose methods
 None of the parties to the conflict episode get what they want.
 Typical lose - lose methods are
 Avoidance- parties to the conflict avoid confrontation. However although manifest
conflict may be reduced through avoidance, latent conflict can arise.
 Compromise -in compromise parties in conflict use bargaining and
negotiation to reduce conflict. Each party to the conflict gives up values. In
compromise however, manifest conflict may reduce, but latent conflict
persists.
 Smoothing: in smoothing parties to the conflict emphasis similarities not
differences. Thus , because differences are not discussed, latent conflict exists.

 Win -lose methods
 In win-lose method, one party to the conflict becomes a clear winner, and
the other party a clear loser. Consequently win-lose methods clearly
leave latent conflict. Nevertheless, they reduce conflict. Main methods
of win- lose are: dominance; authoritative command; and majority
rule.
 Dominance: dominance happens when one party to a conflict
overwhelms the other either because the overwhelming party has a
higher authority status, or is physically over powering. It can also
happen when one party to the conflict has a low tolerance for conflict.
Although dominance reduces conflict, if leaves latent conflict.
 Authoritative command: this occurs when the parties in conflict refer
their conflict to a common superior who decides the solution to the
conflict manifest conflict stops, but conflict episode ends with a
conflict after ***
 Majority rule: in this method, the issue in conflict is put to a vote. Some
members (majority) win, and the minority loses. If this is acceptable to
all concerned, this method can reduce conflict.

 The win - win methods of conflict reduction
 In these methods, each party to the conflict episode gets what he/she
wants. These methods include: problem solving, integration, and
establishing super ordinate goals.
 Problem solving: this method tries to find the basis of conflict and
ensures that all differences among the parties are fully exposed. The
parties regard differences as important sources of information which
lead to creative solutions to the conflict. Properly done, problem
solving is an effective way of reducing conflict.
 Integration: this method seeks solutions that are in the best interests of
all parties. It assumes that peoples’ deeply held interests and desires
are the bases of conflict. Thus, the method tries to find a solution that
meets the goals of every party in the conflict.
 Super ordinate goal: a super ordinate goal is a goal desired by all
parties in the conflict but is unattainable by any party alone. Super
ordinate goals compel cooperation even if the parties otherwise do not
wish to cooperate.

 12.15.3 Increasing Conflict
 Conflict management includes increasing conflict when
the conflict becomes dysfunction ally low. The goal of
increasing conflict is to get the functional qualities of
conflict so as to increase efficiency and effectiveness
increasing information and proposing creative solutions
to problems. Managers must ensure that conflict in
increased to levels that are not dysfunction ally high.
The following are the major methods of increasing
conflict:
 Deliberately forming heterogeneous groups to find
solutions to problems
 By developing an organizational culture that supports
openness about debate and opinions.  
