MANAGING ORGANISATIONAL CHANGE

Week 9: Questions
What are the characteristics of technostructural interventions (restructuring, reengineering, downsizing, TQM)? What is employee involvement? How does it lead to higher productivity? How do the engineering, motivational, and socio-technical approaches to job/work design differ? How can jobs be enriched using Hackman and Oldhams model of job design?

Techno-Structural Interventions
MNGT2035 Change at the Structural Level Dr Richard Winter

Contingencies influencing structural design

Environment

Restructuring
In response to external/internal pressures, senior executives have embraced downsizing (reducing the number of employees) and delayering strategies (removing excess layers of management). Radical changes in the way people perceive, think and behave at work.

Organisation size

Structural design

Worldwide operations

Technology

Organisation goals

Restructuring
Restructuring signals a major change in the employment relationship (end of job security) Employees are expected to be flexible and take care of their own employability and career development In return, organisations provide tools and training for developing new skills

Downsizing process
Clarify the organisations strategy Assess downsizing options and make relevant choices Implement the changes Address the needs of survivors and those who leave Follow through with growth plans

Downsizing tactics (Cameron et al. 1993)

Tactic
Workforce reduction
Organisation

Re-engineering process
Prepare the organisation Specify the organisations strategy and objectives Fundamentally rethink the way work gets done
Identify and analyse core business processes Define performance objectives Design new processes

Characteristics
Reduces headcount Short-term focus Fosters transition Changes organisation Medium-term focus Fosters transition and transformation Changes culture Long-term focus Fosters transformation

Examples
Attrition Retirement/buyout Lay-offs Eliminate functions, layers, products Merge units Redesign tasks Change responsibilities Foster continuous improvement Downsizing is normal

redesign

Systemic

Restructure the organisation around the new business processes

Characteristics of re-engineered organisations

Work units change from functional departments to process teams Jobs change from simple tasks to multidimensional work Peoples roles change from controlled to empowered The focus of performance measures and compensation shifts from activities to results Organisation structures change from hierarchical to flat Managers change from supervisors to coaches; executives change from scorekeepers to leaders

Employee Involvement
Management practices and philosophies that allow employees some measure of control over their immediate work environment and some degree of participation in strategic, administrative, and operational decision making.

Employee Involvement Elements (Text, p.287)

Power
Extent to which influence and authority are pushed down into the organisation

EI and Productivity
Improved Communication and Coordination Employee Involvement Intervention Improved Motivation Improved Capabilities Improved Productivity

Information
Extent to which relevant information is shared with members

Knowledge and Skills

Extent to which members have relevant skills and knowledge and opportunities to gain them

Rewards
Extent to which opportunities for internal and external rewards are tied to effectiveness

Secondary Effects of EI on Productivity

Employee Well-being and Satisfaction Attraction and Retention Productivity

Employee Involvement Applications

A pplication Parallel Structures H igh Involvem ent O rganizations Pow er Inform ation L ow M oderate K now ledge/ Skill M oderate R ew ards Low

H igh

H igh

H igh

H igh

Employee Involvement Intervention

Productivity

Total Q uality M anagem ent

H igh

H igh

H igh

H igh

Parallel Structure Application Stages

Define the parallel structures purpose and scope Form a steering committee Communicate with organisation members Form employee problem-solving groups Address the problems and issues Implement and evaluate the changes

High Involvement Organisation Features

Flat, lean organisation structures Enriched work designs Open information systems Sophisticated selection and career systems

Extensive training programs Advanced reward systems Participatively designed personnel practices Conducive physical layouts

Total Quality Management (TQM)

TQM is a philosophy of organisationwide commitment to continuous improvement (originated in Japan car assembly plants) with a focus on teamwork, increasing customer satisfaction, and lowering costs.

Total Quality Management (TQM)

The Diagnostic Model is TQC/TQM methods of analysis statistical control of process to eliminate variations to reduce product variability (i.e. enhance reliability) and improve customer satisfaction Interventions are QCs/teams to harness employee knowledge and equip employees with process improvements tools (e.g. Six Sigma Method)

TQM Application Stages

Gain long-term senior management commitment (for innovation, participation, continuous improvement) Train members in quality methods Start quality improvement projects using TEAMS (i.e. Quality Circles) Measure progress (using feedback) Rewarding accomplishment [See Readings for TQM in HK Hotels Application]

Demings Quality Guidelines

Create a constancy of purpose Adopt a new philosophy End lowest cost purchasing practices Institute leadership Eliminate empty slogans Eliminate numerical quotas Institute on-the-job training Retrain vigorously Drive out fear Break down barriers between departments Take action to accomplish transformation Improve processes constantly and forever Cease dependence on mass inspection Remove barriers to pride in workmanship

Job/Work Design Approaches

Engineering Approach - Scientific methods, job tasks, specialization Motivational Approach self actualization, satisfaction & commitment the key to productivity

Work Design Approaches

Sociotechnical Systems Approach open systems, work groups & teams

Traditional Jobs & Workgroups

Based on Scientific Management
Highly specified behaviours Narrow range of skills Low levels of authority and discretion Highly repetitive
Core Job Characteristics Skill variety Task identity Task significance Autonomy Feedback from work

Enriched Jobs
Critical Psychological States Experienced Meaningfulness of the Work Experienced Responsibility Knowledge of Actual Results Moderators Outcomes

Huge Benefits
Low selection and training costs High productivity High levels of control

High internal work motivation High growth satisfaction High job satisfaction High work effectiveness

Core Job Dimensions

Skill Variety - extent to which multiple skills and talents are used to complete a range of activities Task Identity - extent to which an individual works on a whole task Task Significance - impact of the work on others, the organisation, or society Autonomy - amount of discretion in the work (e.g. scheduling the work, determining which procedures to use) Feedback from the Work Itself - extent to which work provides information on effectiveness (how am I doing?)

Job Enrichment Application Stages

Perform a thorough diagnosis Form natural work units Combine tasks Establish client relationships Vertical loading Opening feedback channels

Summary
Global competition is forcing organisations to restructure, downsize, delayer and change to more flexible (organic) structures. EI encompasses QWL, empowerment, participative management approaches. All these approaches are human relations in focus i.e. greater EI in decision making leads to increased employee motivation (job satisfaction, commitment, effort) which leads to improved business performance.

Summary
EI approaches vary in the amount of power, information, knowledge and skills, and rewards that are moved downward throughout the organisation: Least EI parallel structures Greatest EI High Involvement organisations, TQM

Summary
TQM is an total organisation-wide commitment to continuous improvement, with the focus on teamwork, increasing customer satisfaction, and lowering costs. TQM means a shift from bureaucratic (hierarchy) to decentralized (teams) methods of control. Quality circles and teams harness employee knowledge and skills focus is on process improvement tools and techniques (to reduce variations, improve product reliability)

Summary
Engineering, motivational and sociotechnical systems (STS) approaches to work design. The motivational approach focuses on employee needs and satisfaction. Jobs can be enriched by combining tasks, forming work units, establishing client relationships, vertical loading, and improving feedback channels.