Mba III Organizations Design Organization Development 10mbahr341 Notes PDF

Organization Design and Development‐10MBAHR341
HUMAN RESOURCE AREA

ORGANIZATION DESIGN & DEVELOPMENT
Sub Code: 08MBAHR341
ORGANIZATION DESIGN
MODULE 1
Organization: Nature & Scope – Definitions – overview of various components & structure, Evolution of
Organization theory, Organizational Theories – images of Organization. Organizational Effectiveness – Definition
– importance & approaches to organizational Effectiveness – the goal attainment approach – the system approach –
the strategic approach
MODULE 2
Organization Design: Approaches to organizational design – Organizational designs for different excellences. -
Competitive excellence – Institutionalized excellence - Rejuvenatory excellence - Missionary excellence - Versatile
excellence - Creative excellence - External nurturance of organizationalexcellence : The role of super system in
promoting excellence - The role of domain influencing institutions in promoting excellence- The role of the
government in promoting organizational excellence
MODULE 3
Structural Dimensions of Organization design: Organization Design - Components of Organization Design -
Dynamic Balance – Organization structure, dimension - division of labour, standardization, horizontal
Differentiation, Advantages & disadvantages of Departmentalization; Vertical Differentiation, Span of Control,
Centralization, Formalization, Implication of High Formalization, Flexibility.
MODULE 4
Contextual Dimensions & Structural Options: Contextual Factors, types of structure, Influence of: Environment,
Strategy, Size & Technology and Power & Politics on Structure, Flat structure
ORGANIZATION DEVELOPMENT
MODULE 5
Foundations of Organizational Development: Conceptual frame work of OD, History of OD, First order and
second order Change, Values, assumptions and believes in OD, characteristics of OD, Participation and
Empowerment, Teams and teamwork, Parallel learning structures, A normative-re-educative strategy of changing,
Applied Behavioural science, Action research.
MODULE 6
Managing the OD Process: Components of OD Process, Diagnosis, Action& Program Management; Diagnosis:
Diagnosing the System, its subunits\ and Processes, Diagnosis using the Six-box Organizational Model, Third
Wave Consulting: The Action Component: nature of OD intervention, analyzing discrepancies: The Program
Management Component: Phases of OD Programs, model for managing change, creating parallel learning
structures.
MODULE 7
OD interventions: Definition, factors to be considered, choosing and sequencing intervention activities,
classification of OD interventions, results of OD, typology of interventions based on target groups.
Human process interventions (individual, group and inter-group human relations): Individual based: coaching,
counseling, training, Behavioural modeling, delegating, leading, morale boosting, mentoring, motivation, etc.,
Group based: conflict management, dialoging, group facilitation, group learning, self-directed work teams, large
scale interventions, team building, and virtual teams. Inter-group based: Organization mirroring, third party peace
making interventions, partnering
Techno structural (Structures, technologies, positions etc.,) & Strategic interventions: Techno structural:
Balanced scorecard; business process reengineering; downsizing and outsourcing;
MODULE 8
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The Future and OD: The changing environment, Fundamental strengths of OD, Implications of OD for the client,
ethical standards in OD, OD’s future, OD Consultant’s role, issues in consultant-client relationship, Power,
Politics& OD, Research on OD
10MBAHR341
ORGANISATIONS: STRUCTURE, PROCESS AND DESIGN
MODULE – I
ORGANISATION: Nature & Scope – Definitions – overview of various components &
structure, Evolution of Organization theory, Organizational Theories – images of
Organization. Organizational Effectiveness – Definition– importance & approaches to
organizational Effectiveness – the goal attainment approach – the system approach – the
strategic approach
ORGANIZATION
The term ‘organization’ derives from the Greek word organon, meaning a “tool” or an
“instrument”.
Organization refers to a concrete and tangible entity, which describes the manner in which men,
machine, and material resources are or should be organized and inter-related.
ORGANIZATION IS
(a) A social unit or human grouping, deliberately structured for the purpose of attaining specific
goals.
(b) Collection of people for the purpose of achieving results or accomplishing tasks through
combined efforts synergy.
(c) Two or more people working together in a co-ordinate manner to achieve group goals
NATURE OF ORGANISATION
(a) Activity analysis:
Analysis regarding which work has to be performed. What emphasis is to be given to each
activity.
(b) Decision Analysis:
Analysis of various relationships between the tasks of manager and those of his subordinate,
peers and superiors.
CHARACTERISTICS OF AN ORGANISATION
a) Two or more persons: Group or formed to achieve goals.
b) Common goals: Group working together towards common goals.
c) Co-operative efforts: Ensures smooth functioning and combine the efforts of people
with co-operation.
d) Division of work: Divided into small tasks, similar tasks combined based on
specialization and are assigned to individuals to ensure maximum levels of performance
e) Communication: Vertical, horizontal established to facilitate delegation of authority
land smooth flow of information.
f) Rules and regulations: Implemented to members to maintain consistency.
g) Pyramidal shape: narrow span of control at top and wider span of control at lower levels
of management.
h) Synergy: Together everyone achieve more.
i) Limitation on member behavior.
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ORGANISATIONAL DESIGN:
It is the overall set of structural elements and the relationships among those elements used to
manage the total organization as a whole.
Organization design is concerned with making decisions about the forms of coordination, control
and motivation that best fit the enterprise. In making these decisions, it is necessary to consider
external factors like the market and internal factors like the needs and aspirations of the member
of the enterprise.
ORGANISING:
A Managerial function and process of defining and grouping of activities of the enterprise and
establishing, authority relationship among them.
Is the Process by which an organization is created.
Is the process which prescribes formal relationships among people.
It helps in accomplishing objectives set in the planning process.
It decides how best to group organization activities and resources effectively and efficiently.
It is a process of differentiating and integrating activity.
ORGANISATIONAL PROCESS:
It involves identifying, defining, grouping activities, establishing relationships, defining
authority, responsibility delegation, accountability and allocating resources to achieve goals
efficiently and effectively.
DIFFERENTIATION:
Departmentalization or segmentation of Activities:
INTEGRATION:
Achieving unity of effort among various departments into individual jobs with specific duties
and assigning authority to carry out those duties and aggregating individual jobs into
departments having appropriate bases.
ORGANISATIONAL STRUCTURE:
It is the formal network by which jobs/tasks are divided, grouped and coordinated. It reflects
formal relationships among groups and individuals. It provides guidelines for effective employee
performance and overall organization success.
Structure is a means for attaining the objectives and goals of an institution. Any work on
structure must therefore start with objectives and strategy.
DETERMINANTS OF ORGANIZATION DESIGN:

a) Strategy
b) Organization
c) Technology
d) Environment
e) Power-Control
f) Age
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g) Size
THE SIX KEY ELEMENTS THAT MANAGERS NEED TO ADDRESSS WHEN THEY
DESIGN THEIR ORGANISATION STRUCTURE ARE:
a) Work Specialization:
The degree to which tasks in an organization are sub-divided into separate jobs. Work
specialization in other words is division of labour.
b) Departmentalization:
The basis by which jobs are grouped together is called departmentalization. Popular ways
to group activities is by functions performed.
c) Chain of Command:
It is an unbroken line of authority that extends from the top of the organization to the
lowest and clarifies who reports to whom.
d) Span of Control:
The number of sub-ordinates a manager can efficiently and effectively direct.
e) Centralization and Decentralization:
The degree to which decision making is concentrated at a single point in an organization.
f) Formalization:
The degree to which jobs within an organization are standardized.
Organizational design is engaged when managers develop or change an organization's structure.

Organizational Design is a process that involves decisions about the following six key elements:
I. Work Specialization
Describes the degree to which tasks in an organization are divided into separate jobs. The main
idea of this organizational design is that an entire job is not done by one individual. It is broken
down into steps, and a different person completes each step. Individual employees specialize in
doing part of an activity rather than the entire activity.
II. Departmentalization
It is the basis by which jobs are grouped together. For instance every organization has its own
specific way of classifying and grouping work activities.
There are five common forms of departmentalization:
1. Functional Departmentalization. As shown in the Figure 2-1, it groups jobs by

functions performed. It can be used in all kinds of organizations; it depends on the goals
each of them wants to achieve.
Figure 2-1Functional Departmentalization example
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Different aspects on this type of departmentalization:
Positive Aspects Negative Aspects

o Efficiencies from putting o Poor communication
together similar specialties across functional areas
and people with common o Limited view of
skills, knowledge, and organizational goals
orientations
o Coordination within
functional area
o In-depth specialization
2. Product Departmentalization. It groups jobs by product line. Each manager is

responsible of an area within the organization depending of his/her specialization
Figure 2: Product Departmentalization example

Source: Bombardier Annual Report

o Allows specialization in o Duplication of functions
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particular products and o Limited view of

services organizational goals
o Managers can become
experts in their industry
o Closer to customers
3. Geographical Departmentalization. It groups jobs on the basis of territory or

geography.
Figure 2-3: Geographical Departmentalization example

o More effective and o Duplication of functions
efficient handling of o Can feel isolated from
specific regional issues other organizational areas
that arise
o Serve needs of unique
geographic markets better
4. Process Departmentalization. It groups on the basis of product or customer flow.
Figure 2-4: Process Departmentalization example
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o More efficient flow of o Can only be used with
work activities certain types of products
5. Customer Departmentalization. It groups jobs on the basis of common customers
Figure 2-5: Customer Departmentalization example

o Customers' needs and o Duplication of functions
problems can be met by o Limited view of
specialists organizational goals
III. Chain of command

It is defined as a continuous line of authority that extends from upper organizational levels to the
lowest levels and clarifies who reports to whom. There are three important concepts attached to
this theory:
• Authority: Refers to the rights inherent in a managerial position to tell people what to do
and to expect them to do it.
• Responsibility: The obligation to perform any assigned duties.
• Unity of command: The management principle that each person should report to only
one manager.
IV. Span of Control

It is important to a large degree because it determines the number of levels and managers an
organization has. Also, determines the number of employees a manager can efficiently and
effectively manage.
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V. Centralization and Decentralization
More Centralization More Decentralization

• Environment is stable • Environment is complex,
• Lower-level managers are uncertain.
not as capable or • Lower-level managers are
experienced at making capable and experienced at
decisions as upper-level making decisions.
managers. • Lower-level managers want
• Lower-level managers do a voice in decisions.
not want to have say in • Decisions are relatively
decisions minor.
• Decisions are significant. • Corporate culture is open to
• Organization is facing a allowing managers to have a
crisis or the risk of company say in what happens.
failure. • Company is geographically
• Company is large. dispersed.
• Effective implementation of • Effective implementation of
company strategies depends company strategies depends
on managers retaining say on managers having
over what happens. involvement and flexibility
to make decisions
VI .Formalization
It refers to the degree to which jobs within the organization are standardized and the
extent to which employee behavior is guided by rules and procedures.
One of the most comprehensive and rational approach for classifying structures was
proposed by Minstzberg(1980-1983).
According to him an organization can be seen as composed of five basic parts. They are:
a) The Strategic Apex: It consists of the top level management in-charge of the overall
organizations. It may consist of a top management team or a single individual.
b) The Operating Core: This consists of employees who perform the basic work related to
the production of goods and service for which the organization is meant.
c) The Middle Line: This consists of the people who connect the strategic apex to the
operating core. These are intermediate managers who transmit, control and help in
implementing the decisions taken by the strategic apex.
d) The Techno structure: This consists of staff functionaries and analysts who design
systems for regulating and standardizing the formal planning and control of the work.
e) The Support Staff: It consists of people who though not directly involved in the work
process provide indirect support to it. Services like cafeteria, mailing, transport etc
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COMPONENTS OF ORGANISATION DESIGN:

For any practicing manager, designing the organization would involve converting his/her
understanding of the influences, into tangible organizational structures. An effective structure
would be one which can successfully cope with these demands and constraints. But in order to
design such an organization, the manager must also be aware of the building blocks of an
organization structure. It is necessary therefore, to consider what constitutes the organizational
structure.
It is still possible to identify some of the significant and empirically verified components of the
organization. Even though, the terms used by the researches have varied, there are sufficient
overlaps in their decision to make it possible to integrate the findings under three major
components: Complexity, Formalization and Centralization.
A) COMPLEXITY:
Complexity refers to the “degree of differentiation that exists within the organization. (Robins
1987) “. It focuses on the number of specific jobs, roles, hierarchical levels, work centers, etc, in
the organization. The greater the differentiation in the organization, the more complex would be
the organization.
The more complex an organization, the greater is its need for devising more complex
mechanisms for control, coordination and communication. When an organization is not very
complex, the activities of its members can be controlled and coordinated through simple
mechanisms, such as informal communications and a few rules and procedures etc. With
increasing complexity, these simple mechanisms become ineffective. To reduce the uncertainty
in decision making, more expensive and sophisticated mechanisms are required by the
organization. One finds highly complex organizations using a variety of such control and
coordination mechanism, e.g, coordination committees, computerized information system, policy
manual etc.
Organizations can be complex in three ways:
a) Horizontally (the degree of differences in the nature of jobs in the organization.)
b) Vertically (the number of hierarchical levels, or the depth in the structure.)
c) Spatially (the degree of the geographical separation among the work units.)
a) HORIZONTAL COMPLEXITY:
Horizontal complexity refers to the degree of differentiation between the organizations
units/subunits in terms of the nature of work, requirements of skills and knowledge and
employee orientations. Other terms used to describe horizontal complexity in research literature
are differentiation, division of labor, departmentation and functional specialization.
Horizontal complexity is often an organization’s way of coping with increase in the quantum and
complexity. They tend to break up their total task into specialized jobs and functions, which are
then manned by personnel with specific expertise and skills.
b) VERTICAL COMPLEXITY:
Vertical complexity refers to the hierarchical levels that exist between the top management and
the lowest level operations in the organization. Increase in vertical complexity is often the
organization’s response to increase in the horizontal complexity. When organizational activities
become more and more segmented and specialized, it becomes more difficult for the different
organizational subunits.
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To understand the part they play in the achievement of the total organization goal. Somebody is
required to integrate and coordinate and ensure that the work is being performed according to the
plan. This need for supervision and coordination results is increased vertical complexity.
If the number of hierarchical levels is more, the problems involved in managing the organization
also increase, there is greater potential for distortion of communication across hierarchies, there
is greater demand for coordinating the managerial decisions taken at different levels, and the
senior levels of management become more distant from the operating core. On the other hand,
the flat organizational structures have their own problems, such as more managerial pressures on
the executives, lesser promotional opportunities, etc. And whether an organization should opt
for a tall or flat organization would depend on a number of factors.
SPAN OF CONTROL:
It refers to the number of subordinates with report directly to a superior to facilitate vertical
coordination and effective supervision of sub ordinates. The concept of span of control is
important because it defines the number of levels in the management. In small or flat
organization normally span of control varies from 5 to 25 from top management level to junior
management level.
FACTORS INFLUENCING / (DETERMINING SPAN OF CONTROL)

a) Skills and abilities of the managers and employees.
b) Characteristics of the work being done/nature of jobs.
c) Training and experience of the work being done/nature of jobs.
d) Simplicity of employee’s tasks.
e) Complexity of employee’s tasks.
f) Physical proximity of subordinates.
g) Degree to which standardized procedures are in place.
h) Sophistication of organization’s information system.
i) Strength of organization’s culture.
j) Preferred style of the manager.
k) Rate of change of activities and personnel.
l) Clarity of instruction and delegation.
ADVANTAGES OF LARGE SPAN OF CONTROL

1. Significant reduction in administrative costs.
2. More effective and efficient organization communication.
3. Faster decisions and closer interaction.
4. Recruitment such that all personnel become a better trained, informed and educated.
5. Better leadership at all levels.
LINE AND STAFF RELATIONSHIPS:

1. Line relationships are superior-subordinate. Relationships can be traced in a chain of
command.
2. Staff relationship are advisory in nature and types are
a) Providing advice only on request.
b) Recommending where staff office deems appropriate.
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c) Consulting authority – Line managers must consult staff in that area.

d) Concurring authority – Staff having a veto authority over the line manager.
e) Promotion between line and staff is a worldwide phenomena and normally get settled
as director.
f) Senior management level for decisions to meet organizational goals / requirements.
g) Nature of manufacturing processes and size of organization have considerable
influence in organizational design, especially relating to method of manufacturing,
and communication.
Comparison of Tall and Flat Organizational Structures
Tall Organization Structure Flat Organizational Structure

(Narrow span of control) (Wide span of control)
Needed when:
Closer control and monitoring is required. More autonomy and self control is required.
Mistakes are likely to be costly. Flexibility and innovation is required.
Tasks/roles are clear; require specialization. Ambiguous tasks and roles; specialization
doesn’t work.
Routine technology. Non-routine technology.
Inexperienced subordinates. Experienced subordinates.
Placid, stable environment. Unstable, turbulent environment.
Dysfunctional consequences:
Discourages initiative, encourages Lack of proper control; encourages laissez-
centralization. faire.
Bottlenecks, distortion of vertical Too much demand on the manager for
communication. coordinating.
Slow promotion. Reduced promotional opportunities.
c) SPATIAL COMPLEXITY:
Spatial complexity refers to the degree to which the subunits and personnel of an organization
are geographically separated. An organization may continue to have the same number of
occupational roles and departments (horizontal complexity) and hierarchical levels (vertical
complexity), but if it decides to geographically separate its activities, this would introduce
additional requirements for control and coordination of these activities. These requirements arise
out of increased spatial complexity.
Many organizations cope with the spatial complexity by having their own corporate service,
wireless system or hotlines. The advent of more efficient telecommunication systems and
computer technology has also helped the organizations to overcome the problems of
communication and coordination. The use of such corporate mechanisms however does not
mean that the complexity induced by spatial separation can be eliminated. Rather, in devising
methods to counter spatial complexity, organizations become more and more complex (e.g.. a
new department would have to be setup to look after the courier service.)
B) FORMALISATION
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Formalization refers to the degree to which jobs in an organization are standardized. Greater
formalization would reduce the employees’ discretion in dealing with their work. By introducing
detailed rules, meticulous work-procedures and clear job descriptions, organizations ensure that
any input is handled in a standard manner so as to produce a uniform output. On the other hand,
less formalization would mean that the jobs are less programmed and provide sufficient
discretion to the employees to exercise choices in dealing with their work.
There can be various reasons for an organization to introduce formalization:

a) Formalization of jobs reduces the availability of outputs. By protecting the output
from human and incidental variations, the organizations can ensure that its quality
standards are maintained. As mentioned earlier, in most pharmaceutical companies, the
sales presentation made by the medical representatives to the doctors is standardized to
the extent of sales talk and even the gestures and intonations. This ensures that the
representative is able to effectively communicate maximum information about the
products to the doctors within the short appointment time.
b) Formalisation is one way of dealing with the complexity of management problems. If
the work-process involves a number of specialized, but interdependent jobs, the need to
coordinate these activities also increases. For example, a typical assembly line consists of
a number of specialized operations which are linked with each other serially. By
formalising the activities for each work-centre on the assembly line, the organization
achieves coordination among these activities.
c) Formalisation reduces the need for direct supervision and control. This helps by
ensuring more time available to the manager for other planning and problem solving
activities. Once the specific jobs/activities have been standardized the manager need not
get directly involved in routine supervisory activities, these can safely delegate down the
line. Thus, formalisation leads to more efficient use of the managers’ time.
d) By reducing the discretions in doing the job, formalisation also reduces the chance of
mistakes occurring in the execution of the job. Mistakes, after all, means loss of
money.
e) Lastly, the greater the discretion in the performance of the job, the greater would be
the need for exercising a judgment by the incumbent. Obviously, a job which entails a
greater professional judgment would cost the organization much more in terms of the
employees’ salaries, perks, benefits, etc. For example, if the job is to recruit and organize
a work-force for maintaining a newly commissioned plant, without any formal guidelines
whatsoever, finding the right incumbent might cost the organization a lot of money. On
the other hand, if there are comprehensive guidelines for recruitment policies and
procedures, this job can be handled by a less experienced person-naturally, at a lesser
salary.
Table: Comparison of Organizational and Professional Formalisation
Organizational Formalization Professional Formalization
Usually achieved through rules, procedures, Usually achieved through years of professional
job-descriptions, etc. training.
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Focuses primarily on molding the external Focuses primarily on the internal attitudes and
behavior of the individual. orientations of the person.
Based on extrinsic rewards and punishments. Based on internalized values and socialization.
Most often used for routine, unskilled work. Most often used for skilled, non-routine work.
Formalization Techniques
a) Selection and Recruitment:
The hiring practice adopted by the organizations is one of the most widely used method
for controlling discretion and formalizing employee behavior. Organizations select their
employees on the basis of certain well defined criteria. Besides assuring themselves that
the person has the technical skills and qualifications. Organizations also assess the
candidate through interviews, group discussions, background investigations, etc. to check
how well the person will “fit” into the organization. The person is screened for his
attitude, manners, work and social habits, even dress appearance.
b) Role/Job Description:
The specification with which the jobs are defined in the organization plays a crucial role
in regulating employee behavior. Organizations make a considerable effort to create job
descriptions which spell out the do’s and don’ts of any job. These role definitions not
only describe what the job entails, but often also how the activities required for the job
are to be performed.
c) Rules and Procedures:
Rules and procedures constitute a detailed program for guiding, molding and regulating
the employee can or cannot do, whereas the procedures explicitly describe the sequence
of behaviors an employee must go through to get anything accomplished within the
organization. It is important to note that organizations have rules and procedures, not
only for organizational work, but also for issues relating to the employee’s personal life.
d) Training: One of the most widely accepted methods adopted by the organizations to
instill desired behavior patterns among their employees is through conducting training
programs. Many organizations except their freshly inducted employees to go undergo an
induction program before allocating specific work assignments. This involves
familiarizing them with the company’s philosophy, history, procedures, personnel
policies, etc. Such an induction program aims at communicating the opportunities as well
as the constraints which an employee can expect to encounter while working for the
company.
C) CENTRALISATION
The third building block of organizational design is the level of centralization (or
decentralization) in decision making. Centralization/Decentralization is an important dimension
of organizational effectiveness, since it refers directly to how appropriately and swiftly the
organization is able to deal with critical issues and arrive at relevant decisions.
Hage defined this dimension as the proportion of jobs whose occupants participate in decision
making and the number of areas in which this participation takes place. Similarly,
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Reimann described centralization as reflecting the locus of decision making, with respect to
major and specific policies, the degree of information sharing between levels, and the degree of
participation in long-range planning..
Relative Advantages and Disadvantages of Centralization and Decentralization
Centralization Decentralization
Advantages: Advantages:
Uniformity of policies, standards and Greater flexibility and appropriateness in

actions. responding to local situations.
Enables closer control and coordination. Allows top management to focus on

policy issues.
Maximizes economies of scale; Facilitates intra-unit communication.

eliminates duplication.
Reduces risk-factor in decision making Increases morale and commitment.

by less informed or less skilled Creates healthy competition among units.
subordinates.
Disadvantages: Disadvantages:
Causes alienation and lack of initiative. Causes conflicts of goals and interests
among units.
Inappropriate response to local Loss of economies of scales; duplication

requirements. of efforts.
IMPORTANCE OF SOUND ORGANISATION
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i) Division of work: Specialization-individuals to develop better capabilities and better

resource utility.
(ii) Facilitates administration: Avoids overlapping of work Duplication of effort.
(iii) Permits optimum use of resources.
(iv) Simulates creativity, delegation of authority helps junior levels to do more challenging
works.
(v) Facilitates coordination among different working groups, units or departments.
division of work, administration, optimization, simulation, coordination.
ORGANISATIONAL THEORY:
Organizational theory is the study of how organization function and how they are affected by the
environment in which they operate.
Organisation theory is concerned with organizational structure i.e. how to design an organization
structure that ensures firms effectiveness.
Organisation theory is the subject concerned with understanding, explaining and predicting how
best to design the best structure for an organization to fulfill its objectives/goals.
Organisation theory is asset of rules developed by organizational experts to help managers re-
organize their companies effectively. Knowledge of organizational theory enables managers to
analyze the structure and culture of their organization, diagnose problems and utilize the process
of organization design, make changes in the structure and culture that help the organization to
achieve its goals.
EVOLUTION OF ORGANIZATION THEORY:

The current state of organization theory is the result of an evolutionary process. Over a period of
many decades many academics and practitioners from diverse backgrounds and with diverse
perspectives have studied and analyzed organizations. Theorists have been introduced, evaluated
and refined over time. New insights tend to reflect the limitations of early theories.
It has been suggested that there are two underlying dimensions in the evolution of organization
theory and that each dimension in turn has opposed perspectives.
The first dimension reflects that organizations are open systems.
The second dimension deals with the ends of organisational structure.
Here again are two opposed positions. The rational perspective argues that the structure of an
organization is conceived as a vehicle to effectively achieve specified goals and objectives. In
contrast, the social perspective emphasizes that structure is primarily the result of the conflicting
forces by the organizations constituents who seek power and control. Therefore the result is four
theoretical classifications.
Type- I Theorists: Known as classical school, developed universal principles or models that
would apply in all situations. Essentially organizations perceived as closed systems. Created to
achieve goals efficiently. Ends perspective is rational and central theme being Mechanical
efficiency.
Type –II Theorists: Is the recognition of Social Nature of organization forming people and
Human relations school, organization is made up of task & people and the system perspective is
closed. Organizations were no well oiled and were perfectly predictable machines. Management
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could not design formal relationships, rules and the like but there were informal patterns of
communication, status, norms, and friendships created to meet social needs of organization
member.
Type – III Theorists: A contingency approach by providing gained momentum in 1960s &
1975. It’s system perspective is closed and the end perspective being rational. Theorists saw
organizations as the vehicle for achieving the goals. They concentrated on size, technology and
environmental uncertainty as the major contingency variables that determined what the right
structure for an organization should be. The theorists argued that properly aligning structure to
its contingency variables would facilitate the achievement of the organizational goals.
Type- IV Theorists: Most recent theorists approach focuses on the political nature of
organizations extensively refined by Jeffery Prefer. It’s system perspective is open, ends
perspective being social and central theme being power and politics. The result is not the rational
effort by managers to create the most effective structure but rather outcome of the political
struggles among coalitions within the organization for control.
EVOLUTION OF ORGANISATION THEORY

Type – I Theorists –Classical school – Organizations Perceived as closed systems created to
achieve goals.
FREDRIC WINSLOW TAYLOR’S Principles Of Scientific Management
1911- Published principles of scientific management to improve productivity .He proposed four
principles of scientific management to enhance productivity
a) To replace rule-of-thumb methods with scientific methods for determining each element
of a worker’s job.
b) Scientific selection and training of workers.
c) Co-operation of management and labor to accomplish work objectives as per scientific
methods.
d) More equal division of responsibility between managers and workers planning &
supervising by mangers.
Created fundamentals of today’s industrial engineering emphasis on best way of doing a job
selection training and motivate workers.
HENRY FAYOL and Principles of Organization:

Based on years of experience as practicing executive Fayol wrote 14 principles which are
followed by mangers even now.
a) Division of work: Specialization increases the operations by making employees more
efficient.
b) Authority: Giving orders. Whenever authority is exercised responsibility arises.
c) Discipline: Employees need to obey and respect the rules of the organization.
d) Unity of Command: Should receive orders from only one superior.
e) Unity of direction: Each groups activities is guided by one objective.
f) Subordination of individuals interests to the general interest.
g) Remuneration: Fair wage policy
h) Centralization:
i) Scalar chain: The line of authority from top management to the lowest ranks.
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j) Order People & Material.

k) Equity : Fair to subordinates.
l) Stability of tenure of personal: High employee turnover is inefficiency.
m) Initiative:
n) Esprit de corps: Team spirit for unity and harmony within the organization.
MAX WEBER AND BUREAUCRACY

Ideal type organization structure proposed by German sociologist writing in the beginning of 20th
century, proposed a structural model a most efficient means by which organizations can achieve
their hands/success through “BUREAOCRACY’. It was characterized by division of labor, clear
authority hierarchy, formal selection procedure, detailed rules and regulations and interpersonal
relationships. Webbers description became the design prototype for the structure of most of
today’s large organizations.
RALPH DAVIS & RATIONAL PLANNING

Rational planning perspective which proposed that structure was the logical outcome of
Organizations objectives expressed in this work.
None can survive if it does not provide economic value generated by activities of members who
create organizations and services.
Activities link the objectives to its results.
Managements job is to group these activities together in such way as to form structure of
organization. The structure of the organization is contingent upon the organisational objectives.
EVOLUTION OF ORGANISATION THEORY

Type II theorists:
Recognition of social nature of organization. These theorists referred to as forming the human-
relations school. Views organizations as made up of both tasks and people.
ELTON MAYO AND HAWTHORNE STUDIES:

On human behavior/productivity by varying illumination levels on worker productivity.
(1) Test group with varying intensity of illumination.
(2) Control group with constant illumination intensity at Western electric co.
First phase: 1924-27:
To their surprise they found that as the light level was increased in the experimental group,
output rose for each group. As the light level was dropped in the experimental group,
productivity continued to increase in both. In fact, a productivity decrease was observed in the
experimental group only when the light intensity had been reduced to that of moonlight. The
engineers concluded that illumination intensity clearly was not directly related to group
productivity, but they couldn’t observe the behavior they expected. Engineers expected that
individual output to be directly related to the intensity of the light.
Second Phase: 1927-32:
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Women employees with more hours of rest periods, change of snacks serving, shorter work
days, no working on Saturdays all these resulted in the increase in production and absenteeism
reduced.
III phase 12 weeks experiment:
Study on a group of wiremen, soldering man, inspectors assembling terminal banks used in
telephone exchange.
Result: esprit de corps. A pride of working in a particular group was established. Knowledge
added to art of management and leadership and human motivation. Managers to include in
organization design work groups, employee attitudes and managers employee relationship of
management and organization theory.
Conclusion:
It is generally agreed upon by management scholars that the Hawthorne studies had a dramatic
impact on the direction of management and organization theory. It ushered an era of organization
humanism. Managers would no longer consider the issue of organization design without
including effects on work groups, employee attitudes and manager-employee relationships.
CHESTER BARNARD AND CO-OPERATIVE SYSTEM:

Merging the ideas of Taylor, Fayol and Weber with results from Hawthorne studies led to the
conclusion that organizations are co-operative system. They are composed of tasks and people
that have to maintain an equilibrium state.
The notion that an organization is a cooperative system is generally credited to Chester Barnard.
He presented his ideas in The Function of the Executive, in which he drew years of experience
with American Telephone and Telegraph, including the presidency of New Jersey Bell.
In addition to being one of the first to treat organizations as systems, Barnard also offered other
important insights. He challenged the classical view that authority flowed from the top down by
arguing that authority should be defined in terms of the response of the subordinate, he
introduced the role of the informal organization to organization theory and he proposed that the
manager’s major roles were to facilitate communication and to simulate subordinates to higher
levels of effort.
DOUGLAS MCGREGOR AND THEORY -X AND THEORY- Y:

There are two distinct human beings. One basically negative-Theory X and the other basically
positive-Theory Y. After reviewing the way managers dealt with employees, Mc Gregor
concluded that a managers view of the nature of human beings is based on a certain grouping of
assumptions and that he or she tends to mold his or her group behavior toward subordinates
according to these assumptions.
Under Theory X, four assumptions are held by managers:

a) Employees inherently dislike work and whenever possible will attempt to avoid it.
b) Since employees dislike work they must be coerced controlled or threatened with
punishment to achieve desired goals.
c) Employees will shirk responsibilities and seek formal direction whenever possible.
d) Most workers place security above all other factors associated with work will display
little ambition.
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In contrast to these negative views of human beings, Mc Gregor listed four other
assumptions that he called Theory Y:
a) Employees can view work as being as natural as rest or play.
b) Human beings will exercise self-direction and self-control if they are committed to
objectives.
c) The average person can learn to accept and even seek responsibility.
d) Creativity-That is, the ability to make good decisions is widely dispersed throughout the
population and is not necessarily the sole province of those in managerial functions.
Mc Gregor argued that theory Y assumptions were preferable and that they should guide
managers in the way they designed their organizations and motivated their employees. Much of
the enthusiasm, beginning in the 1960’s for participative decision making, the creation of
responsible and challenging jobs for employees, and developing good relations can be traced to
Mc Gregors advocacy that managers follow theory Y assumptions.
WARREN BENNIS BUREAUCRACY:

He claimed that bureaucracy’s centralized decision making, impersonal submission to authority
and narrow division of labor was being replaced by decentralized and democratic structures
organized around flexible groups. Influence based on authority was giving way to influence
derived from expertise. In the same way Weber argued the other extreme conditions and pointed
out that flexible adhocracies as the ideal organisational form. In few years we had essentially
moved from one extreme position to another.
EVOLUTION OF ORGANIZATION THEORY

Type- III – Theories –Contingency Approach
Conflict between thesis and antithesis led to synthesis that provided better guidance to managers
that synthesis was a contingency approach. Theorists saw organizations as the vehicle for
achieving the goals. They concentrated on size, technology and environmental uncertainty as the
major contingency variables that determined what the right structure for an organization should
be. The theorists argued that properly aligning structure to its contingency variables would
facilitate the achievement of the organizational goals.
HERBERT SIMON AND PRINCIPLES OF BAKLASH

Contingency movement gained momentum in 1960s. However, Simon recognized in 1940 that
type I principles would have to give way to contingency approach it took 20 years for
organization theorists to respond to Simon’s challenge.
He argued that organization theory needed beyond superficial oversimplified principles to a
study of conditions under which competing principles were applicable.
KATZ KAHN’S ENVIRONMENTAL PERSPECTIVE:

Daniel Katz and Robert Kahn’s Book “The Social Psychology Of Organizations.” was a major
impetus towards promoting type III open- systems perspective to organization theory. Their book
provided a convincing description of advantages of relations of an organization with its
environment and the need for organization theory would be complete without a thorough
assessment of environment as a major contingency factor influencing preferred form of structure.
CASE FOR TECHNOLOGY:

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Research in 1960s –Joan Woodward, Charles Perrrow, as with environment no contemporary

discussion of organization theory would be complete without consideration of technology and
the need for managers to match structure with technology.
THE ASTON GROUP AND ORGANISATION SIZE:

University of Aston in Great Britain advocates that organization size as an important factor
influencing structure. Large organizations have been shown to have many common structural
components. So, too have small organizations. May be most important evidence suggests that
certain of these components follow an established pattern as organizations expand in size. Such
evidence has proven valuable to managers in helping them make organization-design decisions
as their organizations grew.
EVOLUTION OF ORGANISATION THEORY:

Type-IV Theorists- focuses on political nature of organizations:
Early formation by James March Herbert Simon extensively refined by Jeffery Pfeffer,
and March & Simon’s Cognitive limits to rationally challenged classical notion of rational or
optimum decision states that most decision makers selected satisfactory alternatives that were
good enough and only on exceptional cases they were concerned with discovery and selection of
optimal alternatives. Their revised model would recognize the limits of a decision maker’s
rationality and acknowledge the presence of conflicting goals.
PFEFFER’S ORGANISATIONS AS POLITICAL ARENAS

Built on March & Simon’s work, to create a model of organization theory that encompasses
power coalition and inherent conflict over goals, states that organizational design decisions
favor the self interest of those in power.
a) Proposes that control in organizations becomes an efficient production of output.
b) Organizations are coalitions composed of varying group and individuals with
different demands.
c) An organizations design represents the result of the power starless by these diverse
coalitions.
d) It establishes the need to assess the preferences of industry interests of those in the
organization who have influence over the design decisions.
This view is currently very much in vogue.
MARCH AND SIMON’S COGNITIVE LIMITS OF RATIONALITY:

They challenged the classical notion of rational or optimum decisions. They argued that most
decision makers selected satisfactory alternatives. Alternatives that were good enough. They
called for a revised model of organization theory-one very different from the rational
cooperative-systems view. This revised model would recognize the limits of a decision maker’s
rationality and acknowledge the presence of conflicting goals.
Summary:
The current state of organization theory fully reflects the contributions of Type 3 , Type 4
theorists. Contingency advocates have taken the insights provided by earlier theorists and
reframed them in a situational context. The contingency view, in addition to understanding the
point in identifying those contingency variables that are most important for determining
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structure. The political perspective taken by the type 4 – theorists, which was built on knowledge
of behavioral decision making and political science, has significantly improved our ability to
explain organizational phenomena that contingency advocates rational decisions and
assumptions are over looked.
IMAGES OF ORGANISATION:
“To infuse the process of organization with a spirit of imagination that takes us beyond
bureaucratic boxes.
Imagination is a process through which organizations and people can form new images of self.
Diversity of perspectives is not only characteristics of the Laymen, but also of the researchers
and organisational theorists. Theories and conceptualizations, explaining the realities of
organization, have also used a variety of Paradigms and Metaphors to capture the essence of how
organizations function.
Morgan(1986), Organizations are complex and complicate realities as they are far from a united
whole and doesn’t convey a common meaning to everyone. The complexity in organizations
allows people to interpret the organization reality in ways convenient to them.
Such diversity of perspectives is not only characteristics of the laymen but also of the researchers
and organization theorists.
MORGAN:
It is possible to gain insight into how an organization operates and what it will take to change it.
Imagination is a way of thinking, a way of organizing, a way of doing.
It is more of a mindset & a capacity than a technique.
Morgan’s imagination definition in 5 ways.
a) Imagination is about our abilities to see and understand situations in new ways.
b) Recognize different dimension of organizational life, finding resonant images to make
sensible things and shape appropriate actions.
c) Imagination is about new images for new ways of organizing:
• to get beyond existing organization structures.
• to imagine and explore creative possibilities, to see and read organizational
situations with fresh perspectives.
d) Imagination is also about creation of shared understanding, it is about generating essence
of shared vision and values that will help mobilized efforts in a common direct ability to
invent images to meet current challenges to help motivate and mobilize people achieve
desired goals.
e) Imagination is about personal empowerment to avoid locking one-self in to appropriate
modes of behavior.
f) Imagination is about developing capacities for continuous self organization. Providing
source of creative energy to enhance and sustain capacities for continuous improvement
in organizations so that we can adopt and evolve as we go along. Imagination is the art of
creative management and metaphors to view organization as machines, brain, culture,
political, formation, psychic prisons.
The following are some of the prominent images of organization which recur across the
literature on organisational theory:
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A) Organization as Machines:
Organizations are built around systems and procedures which create conditions of efficiency and
reliability of performance.
Fixed working hours, production schedule, maintenance schedules, financial control system,
sales targets, and code of conduct, clear job descriptions are all natural corollaries of viewing the
organization as machines.
The aim of these efforts is to routine the activities and reduces uncertainty of operations.
Ex: Pharmaceuticals companies train their medical representative’s announcements made by air-
hostesses.
Even economists Adam Smith in his book, the wealth of Nations noted that division of labor,
relying on breaking the total task into small specialized units helped in increasing efficiency by
replacing the discretion of workers with controls exerted by supervisors.
Weber also noted that bureaucracy helped in routinising the administrative process in the same
way as machines standardized the manufacturing process. Webers principle of bureaucracy
stated that division of labour, well defined authority and hierarchy, high formalization,
employment direction based on merit were important in achieving goals.
B) Organization as Living Systems:

Burns and Stalker found that regimented and bureaucratic organizational structures were
primarily useful in dealing with regulated and predictable environments.
But in an unstable and complex environment, organization need to develop more loose and
flexible structures to cope with adaptive demands. Their findings also highlighted a crucial
aspect of organization functioning which was altogether ignored in the machine image of
organization i.e the important interface between the organization and their environment.
This characteristic of adapting to the environment also makes organization similar to living
systems. In fact, not only does the organization interact with the environment but they also
undergo the phenomenon of growth, maturity and decline.
Katz and Kahn defined organization as an open system. Organization is influenced by the
environment. This commerce between the organization and it’s environment is not only confined
to the inputs (men, machine, material) and output (service, products) but changes in the
environment also determines the corresponding changes in the organization strategy, structure
and system.
Since organization resembles living beings, they also grew and matured like living beings, that is
they show a predictable sequence of growth. Organization do grow in a predictable sequential
manner, by no means is this pattern invariant in all cases.
Unlike human beings, organization rarely dies and disintegrates. Even when they go into decline,
they have a remarkable ability to survive. They renew themselves and make a comeback.
C) Organization as Brains:
We have seen that organizations are not merely reactive entities which passively adapt to the
environmental demands. They are also proactive in their stance. They consciously plan their
strategies and internal design.
This means that the changes in the organization strategies, structure and systems do not occur
automatically in response to the external environment but it depends on the manner in which the
organization receive process and act upon the information emanating from internal and external
environment.
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This ability of organization to anticipate and plan for a non-existent (though future) requirement
makes them similar to complex information processing systems which are capable of problem-
solving learning and innovating.
For any problem faced by an employee, he/she can refer to the books or consult a senior official
to find a solution. But often (particularly in a fast changing business environment), the nature
and number of these exceptions increases much beyond the problem solving capacity of the
existing rules, hierarchies and managerial processes (something similar, incidentally also
happens to human brain under conditions of stress). In such a situation,
D) Organizations as Political Systems:

The criteria for taking decisions in the meetings are far from rational. They are equally
influenced by the specific personalities and relationships of the decision makers. It tells us that
within the complex reality of the organization decisions are not just solely determined by the
logic of optimization, but also by the existing power-equations among the organization members.
Politics refer to the flow of power and influences within a social system. Organization with their
built-in-hierarchy and authority relationships, are naturally open to political processes.
Organization are political systems because,
a) Members enjoy power from various sources( due to position, expertise, group support,
seniority etc) which help them in influencing each other.
b) By virtue of their role, certain people/ departments are more important for achieving
organisational goals as compared to others.
c) Lastly, any viable decisions need to satisfy three kinds of goals:
Corporate goal, departmental goal and individual goal. These three in most situations are not
congruent with each other and therefore, call for political skills from the decision maker.
Mayes and Allen defined Organisation politics as “the management organization influences to
obtain ends not sanctioned by the organization or to obtain sanctioned ends through non-
sanctioned influence means.”
E) Organization as Cultures:
Culture is “the totality of socially transmitted behavior patterns, arts, beliefs, institutions and all
other products of human work and thought characteristic of a community or population.”
In other words, the way we do things around here. The significance of organization culture in
determining organization effectiveness has been highlighted by a number of studies.
Peters and waterman observed that successful company’s were characterized by strong cultures.
Organizations that had core values are intensely cherished, clearly stated and widely shared
among employees.
Viewing, organization has some cultural systems has some significant implications:
a) It means that managing is more than mere formal process of planning, directing, controlling
and co-coordinating.
b) It helps in focusing on the significant roles of basis human processes (motivation, perception
and leadership.)
c) It makes our understanding in regarding to the nature of organizational change and adaptation.
d) It provides an insight into crucial interface between organizational and societal culture.
F) Organization as Psychic Prisons:
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The white collar crime quotes the first hand experience of a young man who got into business of
selling used cars: He learned that this business had more tricks for fleeing customers than any
other he had tried previously. Cars with everything wrong were sold as ‘guaranteed’ when the
customers returned and demanded his guarantee, he had to sue to get it and very few went to that
trouble and expense. The boss said you could depend on human nature. The thing that struck him
as strange was that all those people were proud of their ability to flee customers. They boasted of
their crookedness and were admired by their friends and enemies in proportion to their ability to
get away with a crooked deal, it was called shrewdness.
Another feature was that all these people were unanimous in the denunciation of gangsters,
robbers, burglars and petty thieves. They never regarded themselves to be in the same class and
were bitterly indigent if accused of dishonesty because for them it was just good business.
Only one has to think about the bridges which collapse due to adulterated cement, spurious killer
drugs etc.
What is striking in these everyday happenings is that people involved in committing such ignoble
deeds are otherwise respectable, mentally healthy and normal persons.
Of course, not all organizations promote and perpetuate pathological behaviors. Pathology in
organization as in human psyche occurs when the system becomes out of tune with the demands
of the objective of reality.
The greater the flexibility and responsiveness of an organization, the lesser are the chances of its
trapping itself and its members into pathological patterns.
One can say that the whole purpose of understanding organization is to develop working
environments which are more humane, healthy and flexible.
ORGANISATIONAL EFFECTIVENESS
It is the degree to which an organization realizes its goals. Organizational effectiveness can be
defined as the degree to which an organization attains its Short (ends) and long term (Means)
goals. The selection of (goals) which reflects strategic constituencies, self interest of the
evaluator, and the life stage of the organization.
CRITERIA FOR ORGANISATIONAL EFFECTIVENESS:

a) Overall effectiveness
b) Productivity
c) Efficiency
d) Profit
e) Quality
f) Accidents
g) Growth
h) Absenteeism
i) Turnover
j) Job satisfaction
k) Motivation
l) Morale
m) Conflict/cohesion
n) Flexibility/adaptation
o) Planning and goal setting
p) Control
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q) Goal consensus
r) Internalization of organization goals
s) Role and norm congruence
t) Managerial interpersonal skills
u) Managerial interpersonal skills
v) Information management & communication
w) Readiness (Response)
x) Utilization of environment
y) Evaluations by external entities
z) Stability
aa) Value of human resources
bb) Participation and shared influence
cc) Training and development emphasis
dd) Achievement emphasis.
Organization Effectiveness requires multiple criteria, that differentiate organizational function. It
has to be evaluated using different characteristics and that Organisational Effectiveness must
consider both means (process) and ends.
IMPORTANT ASPECTS OF ORGANISATIONAL EFFECTIVENESS ARE:

(i) Ability to adapt to changing environment.
(ii) Productivity
(iii) Job satisfaction
(iv) Profitability
(v) Acquisition of scarce and valued resources.
PROCESS OF ACHIEVING ORGANISATIONAL EFFECTIVENESS INVOLVES FIVE

STEPS:
(i) Acquiring resources needed from the environment.
(ii) Combining them with an efficient and productive transformation process.
(iii) Facilitating and attainment of organization goals.
(iv) Making it easier to acquire future resources.
(v) Satisfying the strategic constituent in the environment
If managers can identify were they want their organization to be and relative to other parts of
their environment and also deals how best to get there, have a good chance of achieving
organizational effectiveness.
APPROACHES TO ORGANISATIONAL EFFECTIVENESS:

a) THE GOAL ATTAINMENT APPROACH
An organization is, by definition, created deliberately to achieve one or more specialized goals. It
should come as no surprise then to find that goal attainment is probably the most used criterion
of effectiveness.
The goal-attainment approach states that an organization’s effectiveness must be appraised in
terms of accomplishment of ends rather than means. It is the bottom line that counts. Popular
goal attainment criteria include profit maximization, bringing the enemy to surrender, winning
the basketball game, restoring patient’s to good health, and so forth. Their common denominator
is that they consider the ends to which the organization was created to achieve.
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Assumption: Assumes that organizations are,

(i) Deliberate, rational and goal seeking entities and
ii) Organization must have ultimate goals.
(iii)These goals must be identified, defined, well enough to be understood.
(iv)Goals must be few enough to be manageable
(v) There must be general consensus/agreement on goals.
(vi) Progress towards goals must be measurable.
b) THE SYSTEMS APPROACH

Organizations acquire inputs, engage in the transformation processes, and generate outputs. It
has been argued that defining OE solely in terms of goal attainment results in only a partial
measure of effectiveness. Goals focus on outputs. But an organization should be judged on its
ability acquire inputs, process these inputs, channel the outputs and maintain stability and
balance. Another way to look at OE, therefore, is through a systems approach.
In the systems approach, end goals are not ignored, but they is only one element in a more
complex set of criteria. Systems model emphasize criteria that will increase the long term
survival of the organization-such as the organization’s ability to acquire resources, maintain
itself internally as a social organism and interact successfully with its external environment. So
the systems approach focuses not much on such specific ends but also the means needed for the
achievement of those ends.
Assumptions: Assumes that organizations,
a) Are interrelated sub parts and any one sub parts poor performance will negatively affect
whole system.
b) Require awareness and successful interaction with environment constituencies.
c) Also mgmt to have good relationship with, customers, suppliers, Govt. agencies, union
and other powers.
d) Requires replenishment of men, material etc.
c) THE STRATEGIC-CONSTITUENCIES APPROACH
A more recent perspective on OE is the strategic constituencies approach proposes that an
effective organization is one that satisfies the demands of those constituencies in its environment
from whom it requires support for its continued existence. This approach is similar to the
systems view, yet it has a different emphasis. Both consider interdependencies, but the strategic-
constituencies view is not concerned with the organization’s entire environment. It seeks to
appease only those in the environment who can threaten the organization’s survival.
In this context, most public universities must consider effectiveness in terms of acquiring
students but need not be concerned with the potential employers of their graduates. Why?
Because the survival of these universities is not influenced by whether their graduates get job.
On the other hand, private universities, which charge considerably more than their public
counterparts, do spend a great deal of time and money in attempting to place their graduates.
When parents spend fifty thousand dollars or more to get their son or daughter a bachelor’s
degree, they expect it to lead to a job or acceptance in a good graduate school. If this does not
occur, it will be increasingly difficult for the private school to get freshmen applications. The
converse of this the university’s relation with the legislature in the state within which it operates.
Public institutions devote considerable efforts to wooing state legislatures. Failure to have their
cooperation is sure to have adverse budget effects on the public university. The private
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university’s effectiveness, in contrast, is little affected by whether or not it has favorable

relationship with the key people in the state capital.
Assumption: Assumes that Organizations are,

Adaptable to the environment, customer of society, clients and employees respectively.
Making it operative: Members have to identify the constituencies they consider to be critical to
the organization’s survival. This input can be combined and synthesized to arrive at a typical of
criteria of selected strategic constituencies.
d) THE COMPETING VALUES APPROACH:

The main theme underlying the competing values approach is that criteria you value and use in
assessing an organizations effectiveness, it may be, return on investment, market share, new
product innovation, job security etc depends on who you are and the interests you represent. It is
not surprising that stockholders, unions, suppliers, management or internal specialists, marketing
personnel, production or accounting may look at the same organization but evaluate its
effectiveness entirely different.
MAKING COMPETING VALUES OPERATIVE:

a) Flexibility Vs control two incompatible dimension of organization structure.
(Flexibility favors -Values, Innovation and Adaptation whereas control favors- Stability,
order and predictability.)
b) People & organization well being. Which is to be given more importance?
c) Means and ends. (Means-Streaming in organizations long-run) (Ends-Final outcome)
These three values can be depicted to form a three dimension diagram
Figure- A Three Dimensional Model Of Organizational Effectiveness.
Flexibility
Means
People Organization
Ends
Control
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These values can further be combined to form eight cells or sets of Organisational
Effectiveness:
Table- Eight OE Criteria Cells
CELLS DESCRIPTION Definition

OFM Flexibility Able to adjust well to shifts in external
conditions and demands.
OFE Acquisition of resources Able to increase external support and expand
size of work force.
OCM Planning Goals are clear and well understood.
OCE Productivity and efficiency Volume output is high; ratio output to input is
high.
PCM Availability of information Channels of communication facilitate
informing people about things that affect their
work.
PCE Stability Sense of order, continuity, and smooth
functioning of operations.
PFM Cohesive work force Employees trust, respect and work well with
each other.
PFE Skilled work force Employees have the training, skills and
capacity to do their work properly.
We can begin to combine the eight cells into some distinct models/four definition of
organisational effectiveness:
Human Relations Model:

It defines OE in terms of cohesive (as means) and skilled (as ends) work force.
Open- System Model:
OE in this model is defined in terms of flexibility (as means) and the ability to acquire resources
(as ends).
Rational-Goal Model:
The existence of specific plan and goals (as means) and high productivity and efficiency (as
ends) is used as evidence of effectiveness.
Internal Process Model:
It emphasizes people and control and structure adequate dissemination of information (as means)
and stability and order (as ends) in the assessment of effectiveness.
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Conclusion:
Approach Definition When useful

1. Goal An organization is effective to the extent
The approach is preferred when goals
Attainment that it accomplishes its stated goals. are cleat, time build & measurable
2. Systems It acquires needed resources. A clear connection exists between
inputs / outputs
3. Strategic All strategic constituencies are at least Constituencies have powerful
Constituencies mini mall satisfied. influence on the organization & the
organization and the organization to
respond to demands.
4. Competing The emphasis of the organization in the Organization is unclear about its own
values four major areas matches constituent emphasis, or changes in criteria over
preferences. the time are of interest.
Organization effectiveness is considered as central theme in organization theory, its meaning and
measurement to be confirmed.
Goal attainment and systems approaches are dominant ones. Focus on accomplishment focus on
accomplishment of ends.
Strategic constituencies is a more recent offering focus on the ability to locate those individuals,
groups and institutions upon which organization depends for its continued operation.
The final one being competing values which has sought synthesize OE criteria into four models,
each of which is based on a given set of values and each of which additionally is preferred
depending on where an organization is in its life cycle.
---------------------------------------*******************----------------------------------------
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MODULE 2
Organization Design: Approaches to organizational design – Organizational designs for
different excellences. - Competitive excellence – Institutionalized excellence - Rejuvenatory
excellence - Missionary excellence – Versatile excellence - Creative excellence - External
nurturance of organizational excellence : The role of super system in promoting excellence - The
role of domain influencing institutions in promoting excellence- The role of the government in
promoting organizational excellence.
INTRODUCTION:
Some economists and politicians have spoken of three worlds.
First world consisting of the wealthy, economically highly developed capitalists countries,
mostly Western, the Second world of Soviet Union dominated East European communist
countries mostly located in South America, Africa and Asia. Such is the pace of socio-political
change in the second world that in a decade or less it may disintegrate completely, with the bulk
merging into the First World and the remainder into the Third world. Eventually there may be
just the First World, with perhaps a third of the human population and over 80% of its income
and the third world with two thirds population and a fifth or less income. The Third world is of
course immensely varied. In 1983 the World Bank listed 73 countries with per capita annual
incomes below $1700.Their combined population was about 3000 million. They included nations
like China and India. Despite the diversity in size, cultures and government systems, these
nations of the third world share a few characteristics which must be borne in mind when
designing their organizations. They are, poverty, inequality, statism, transition from
traditionalism to modernity.
manage the total organization as a whole. It involves designing the organization structure by
developing, changing etc.
of the enterprise.
FIVE APPROACHES TO ORGANIZATIONAL DESIGN
Managers must make choices about how to group people together to perform their work. Five
common approaches — functional, divisional, matrix, team, and networking—help managers
determine departmental groupings (grouping of positions into departments). The five structures
are basic organizational structures, which are then adapted to an organization's needs. All five
approaches combine varying elements of mechanistic and organic structures. For example, the
organizational design trend today incorporates a minimum of bureaucratic features and displays
more features of the organic design with a decentralized authority structure, fewer rules and
procedures and so on.
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Functional structure
The functional structure groups positions into work units based on similar activities, skills,
expertise, and resources (see Figure 1 for a functional organizational chart). Production,
marketing, finance, and human resources are common groupings within a functional structure.
Figure 1The functional structure.
As the simplest approach, a functional structure features well-defined channels of

communication and authority/responsibility relationships. Not only can this structure improve
productivity by minimizing duplication of personnel and equipment, but it also makes employees
comfortable and simplifies training as well.
But the functional structure has many downsides that may make it inappropriate for some
organizations. Here are a few examples:
• The functional structure can result in narrowed perspectives because of the separateness
of different department work groups. Managers may have a hard time relating to
marketing, for example, which is often in an entirely different grouping. As a result,
anticipating or reacting to changing consumer needs may be difficult. In addition,
reduced cooperation and communication may occur.
• Decisions and communication are slow to take place because of the many layers of
hierarchy. Authority is more centralized.
• The functional structure gives managers experience in only one field—their own.
Managers do not have the opportunity to see how all the firm's departments work
together and understand their interrelationships and interdependence. In the long run, this
specialization results in executives with narrow backgrounds and little training handling
top management duties.
Divisional structure
When a company expands to supply goods or services to a variety of customers, offers a variety
of different products or are engaged in business in several different markets, the company could
adopt a divisional organizational structure.
A divisional structure groups its divisions according to the specific demands of products, markets
or customers. Unlike the functional organizational structure, where the different organizational
functions of the company conduct activities satisfying all customers, markets and products, the
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divisional structure focuses on a higher degree of specialization within a specific division, so that
each division is given the resources, and autonomy, to swiftly react to changes in their
specific business environment. Therefore, each division often has all the necessary resources and
functions within it to satisfy the demands put on the division
Each division will likely be structured as a functional structure. A company with a divisional
structure therefore has a subset of different and specialized SBU's satisfying the demands of
different customers, markets or products.
The benefit of this organizational structure is that companies are able to specialize its activities
into self-reliant divisions, each capable of satisfying e.g. customer demands and changes within
the business environment.
In divisional structure, the organization is organized into various divisions based on basically
three criteria product, market of geographical structures. In product structures, the organization is
grouped in such a way that that the employees who are involved in making a specific product are
grouped together into one division. A product divisional structure will divide the company into
product A, B, C etc and each division will have its own hierarchy. Then there is the market
divisional structure in which the organization is organized according to the various markets that
it operates in for example business/corporate sales division, consumer sales division etc. Finally
we have the geographic division structure in which the organizations is grouped in such a way
that employees located in one geographic locations are grouped together to make one division.
For example the company may have a headquarter and then a European division, south Asian
division etc.
Because managers in large companies may have difficulty keeping track of all their company's
products and activities, specialized departments may develop. These departments are divided
according to their organizational outputs. Examples include departments created to distinguish
among production, customer service, and geographical categories. This grouping of departments
is called divisional structure (see Figure 2 ). These departments allow managers to better focus
their resources and results. Divisional structure also makes performance easier to monitor. As a
result, this structure is flexible and responsive to change.
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Figure 2The divisional structure—Disney in the early 1990s.

However, divisional structure does have its drawbacks. Because managers are so specialized,
they may waste time duplicating each other's activities and resources. In addition, competition
among divisions may develop due to limited resources.
Matrix structure
The matrix structure combines functional specialization with the focus of divisional structure
(see Figure 3 ). This structure uses permanent cross-functional teams to integrate functional
expertise with a divisional focus.
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Figure 3The matrix structure.
Employees in a matrix structure belong to at least two formal groups at the same time—a
functional group and a product, program, or project team. They also report to two bosses—one
within the functional group and the other within the team.
This structure not only increases employee motivation, but it also allows technical and general
management training across functional areas as well. Potential advantages include
• Better cooperation and problem solving.

• Increased flexibility.
• Better customer service.
• Better performance accountability.
• Improved strategic management.
Predictably, the matrix structure also has potential disadvantages. Here are a few of this
structure's drawbacks:
• The two-boss system is susceptible to power struggles, as functional supervisors and

team leaders vie with one another to exercise authority.
• Members of the matrix may suffer task confusion when taking orders from more than one
boss.
• Teams may develop strong team loyalties that cause a loss of focus on larger organization
goals.
• Adding the team leaders, a crucial component, to a matrix structure can result in
increased costs.
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Team structure
Team structure organizes separate functions into a group based on one overall objective (see
Figure 4 ). These cross-functional teams are composed of members from different departments
who work together as needed to solve problems and explore opportunities. The intent is to break
down functional barriers among departments and create a more effective relationship for solving
ongoing problems.
Figure 4The team structure.
The team structure has many potential advantages, including the following:
• Intradepartmental barriers break down.
• Decision-making and response times speed up.
• Employees are motivated.
• Levels of managers are eliminated.
• Administrative costs are lowered.
The disadvantages include:

• Conflicting loyalties among team members.
• Time-management issues.
• Increased time spent in meetings.
Managers must be aware that how well team members work together often depends on the
quality of interpersonal relations, group dynamics, and their team management abilities.
Network structure
The network structure relies on other organizations to perform critical functions on a contractual
basis (see Figure 5 ). In other words, managers can contract out specific work to specialists.
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Figure 5The network structure.
This approach provides flexibility and reduces overhead because the size of staff and operations
can be reduced. On the other hand, the network structure may result in unpredictability of supply
and lack of control because managers are relying on contractual workers to perform important
work.
EXCELLENCE:
It means surpassing or outstanding achievement. Excellence is important to society because it
sets an example, a standard behavior that is socially useful.
Excellence is especially valuable in the third world. These are unsettled, seething societies in
which the ethic of hard, honesty work for long term success is fighting a titanic battle with the
‘ethic’ of expediency, short cuts, corruption and use of contacts to bypass merit.
Human excellence comes in many forms. Being the best amongst competitors is one form-the
excellence associated with the champion. Invention or innovation is another form of excellence.
Invention relates to the concept of a bright new idea. All these excellences are obviously not cost
free. These are costs of mental and physical effort, sacrifices made by oneself as well as ones
dear and near ones in the pursuit of surpassing achievement, opportunities forgone. Human
excellence is manifested not just through individual efforts. Team effort is often needed-
especially in organizations for surpassing achievements. In settings such as sizeable
organizations where specialization is extensive, excellent teamwork is vital for human excellence
to manifest itself.
The more an organization promotes individual or team excellence, the more the organization is
likely to excel, for after all the work of the organization is the work of the individuals and the
groups that work in it. Organizational design is therefore largely a matter of promoting
individual and group level excellence and synchronizing it to facilitate excellence in achieving
organizational level goals.
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Some examples of Organizational Excellence: Excellence in the public sector, Excellence in the
private sector, Excellence among social development oriented organizations, Excellence among
institutions, Turnaround of sick enterprises.
FORMS OF ORGANIZATIONAL EXCELLENCE:

Just as human excellence takes many forms, so does organizational excellence, for the
organization is after all an entity of human for humans and managed by humans. There is the
champion-type of organizational excellence-the best performance in a competitive field during a
particular period. This may be called as Competitive Excellence. Vastly superior performance
compared to the past, the best earnings per share performance among well-performing
enterprises in their respective industries. These were the examples of sick organizations that had
dramatically improved their performance. This may be termed as Rejuvenatory Excellence.
Some American scholars have studied a third form of organizational excellence-that have
sustained high corporate performance over a fairly long stretch of time. This may be called as
Institutionalized Excellence. Then there are organizations that are deemed excellent because of
their uniqueness, their pioneering spirit, their innovativeness, we may call this as Creative
Excellence. Pursuing effectively a major social mission or an ideal is another form of
organizational excellence. Many public enterprises, altruistic or social change oriented voluntary
organizations, and even some private corporations pursue this sort of excellence. We may call
this as Missionary Excellence.
In the 50’s and 60’s a number of organizational researchers questioned the excessive emphasis
on organizational performance on such indicators as profitability, efficiency, productivity, etc.
They felt this emphasis could lead to the neglect of the needs of the needs of people working in
the organization. They therefore spoke of organizational effectiveness in which the concern with
hard performance indicators is supplemented by concern for well-being and development of the
staff, a stakeholder often neglected in the hot pursuit of profits. This idea was further extended
by other researchers who argued that most sizeable organizations have multiple stakeholders-not
just owners and staff, but also unions, customers, suppliers, the government, bankers etc. The
organization that effectively meets the needs and expectations of all these stakeholders is
therefore an excellent organization. In this form of excellence, the emphasis is not just on the
performance of the organization in terms of profitability, growth, or efficiency, it is also on the
satisfaction of the needs of the staff, on meeting it’s social responsibilities, and commitments to
other important stake holders. Since excellence is sought on many fronts, we may call this as
Versatile Excellence.
These six forms of organizational excellence-competitive, rejuvenatory, institutionalized,
creative, missionary and versatile are not mutually exclusive. Indeed, some organizations possess
or pursue several types of organizational excellence. But conceptually they do differ, and
therefore the sort of management and organizational design needed to achieve each would also
differ. These excellences represent distinctive competencies that must be mastered for third
world societies to move ahead swiftly.
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NEED FOR THESE EXCELLENCES:

a) Competitive excellence is needed to increase the adaptability, market orientation and
resourcefulness of third world organizations, especially enterprises, so that they can reach
global levels of efficiency.
b) Institutionalized excellence is especially needed where the whip of competitive pressure
is weak or where top management continuity is problematic (as in government owned
enterprises or agencies.)
c) Rejuvenatory excellence is needed to be mastered because of the sickness proneness of
sizeable Third World organizations.
d) Missionary excellence is needs to be learnt because many sizeable organizations,
including enterprises, have vast social or economic missions to accomplish in the context
of Third World backwardness.
e) Creative excellence needs to be learnt because of the pressing need for innovative and
fresh approaches in many ossified spheres of Third World societies.
f) Versatile excellence also is important for those organizations that have numerous
stakeholders and pursue many different goals.
APPROACHES TO ORGANIZATIONAL DESIGN:

There are different approaches to organizational design, each resting on some basic
assumptions and each having some research support:
Since all formal, sizeable organizations all over the world share so much common (viz. the
need to acquire and allocate resources, the need to control and coordinate activities, the need
to manage and motivate human resources, the need to adapt to external changes, etc.) there
are likely to be some principles, policies, practices, structures, systems etc. that are
universally good. If these are adopted, any organization anywhere should perform better than
it would if it did not adopt them.
Excellence according to a third view depends upon how synergistically strategic choices are
managed.
There are different kinds of excellence, and therefore organizational designs must be tailor-
made to the excellence that is sought.
COMPETITIVE EXCELLENCE:
A variety of organizations compete for clientele. These include firms, political parties and
unions. An even wider variety competes for resources. Government departments may not
compete with one another in the market place, but they often compete for government funds.
Similarly faculties of a university compete for funds of the university and universities compete
with other universities for faculty members and other resources. Organizations that face little or
modest competition can ignore it., but not those that face a good deal of it. Competitive
excellence becomes critical in domains where competition for clientele and/ or resources has a
bite to it. It is that the pressure is palpable to prioritize sharply, develop domain-directed
strategies, and streamline the organization to control costs, increase productivity, and coordinate
activities effectively.
Ex: Singapore Airlines, owned by the government of Singapore, during 1969-79 Singapore
airlines improved its position from being 59th world largest to the 9th largest, with an annual
growth rate of 46%. Its profit rose from $28m in 1977-78 to $105m in 1981-82.A study rated it
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as the top airline among 52 competitors in the Asian region. On all five dimensions-service and
performance, esteem and preference, image awareness and familiarity and advertising recall. The
number of other factors were, rapid fleet expansion, aggressive route development overseas and
highest quality of customer service.
The chief characteristic of this form of excellence is being outstanding within a field of
competitor’s vis-à-vis a clear cut criterion or a few reasonably clear cut criteria of performance.
Ex. The company with the best or outstanding return on investment and or the fastest growth rate
within an industry in a given year is typical example of this sort of excellence. The school within
a city with the highest percentage of students getting first class at school leaving certificate
examinations, the public hospital winning an award for the lowest mortality rate, the bank with
the best loan recovery performance, the news paper with the highest circulation and so on.
To be able to be best competitor, the champion organization must have a clear cut goal( or a few
clear cut goals) and strong management commitment to excel at this goal or these goals. It must
have a tight control over operations and co-ordination of activities through teamwork. It would
need excellent mechanisms for monitoring the field of operations, the actions of competitors, and
the organization’s performance. A resourceful management that can quickly respond to the
currents of competition and a culture of quickly adopting the tried effective practices in the
organizations would be very helpful. A lean organization and low overheads would contribute to
bashing competitors, as would aggressive marketing capability. On a hard competitive track, the
organization resembles a compact, streamlined, power-packed racing car raring to win.
The design for competitive excellence can be summarized as follows:

a) Mission, vision of excellence and core values:
Conservation of organizational energies for meeting competitive challenges and sharp focus
for all organizational activities is important in a competitive situation. It is useful to adopt to
specific rather than many missions. Core values must be particularly compatible with the
purpose of the organization and its operating context. Vision of excellence is useful to a
competing organization when it is anchored in the quality performance of the organization on
a few parameters like efficiency, productivity and growth.
b) Management style:
Although several management styles may be practiced in a competitive domain, in sizeable
organizations a professional participatory management style may be appropriate for
competitive excellence. Such style would be characterized by systematic, planned, expertise
and strategy based rather than ad hoc decision making at the top levels, reasonable
commitment to ethics and idealism on the part of management, and participative consensus
seeking decision making.
c) Policy framework:
A strong market orientation aggressive pursuit of domain dominance, operating autonomy to
managers supplemented by team decision making and meritocracy in recruiting personnel and
rewarding staff constitute an appropriate policy framework for securing competitive
excellence.
d) Management systems and structures:
A flexible flat organization structure, divisionalisation, a modest amount of routinisation and
standardization of activities, strengthening of line departments by locating staff experts in
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them, strategically placed coordination committees and an effective performance control

related management system should facilitate competitive excellence.
e) Renewal mechanisms:
Need to supplement single loop learning by periodic double loop learning through survey
feedback, image sharing, sensitivity training, MBO, and periodic reorganization studies are
useful. Brainstorming by decision makers and the use of other tools of creative problem
solving can generate innovative ideas that can, in turn, provide a competitive edge to the
organization.
INSTITUTIONALISED EXCELLENCE:
Competitive pressures in the domains of many third world societies are relatively weak.
Government dominance often threatens to politicize and bureaucratize the larger organizations,
especially those dependent on the government for funds owned by it. For the latter sorts of
organization, changes of chief executives are frequent so that top level management continuity is
weak. If the organization internalizes norms of excellent functioning, it may continue to function
well despite weak competitive pressures and an adverse control environment. And organizational
leadership during the formative years of the organization is needed that makes the right choices
of what mission to pursue and how.
Ex: National Thermal Power Corporation of India, was set up in mid seventies by te
government of India to speed up Thermal power supply. Between 1982-1990 it increased its
supply by ten times. It was profitable throughout and its profit was 100 times over the previous
years and consistently earned more sales. It also went from setting up 110 mw power stations to
500mw power stations. It also ventured into the setting up of sophisticated gas-based power
stations. Competitive pressures were not a major factor in NTPC’s operating excellence. NTPC
was able to achieve an outstanding track record because its leadership had institutionalized a
strong result-oriented work culture.
The chief characteristic of this form of excellence is sustained high achievement over a long
period of time on important performance parameters even when there is little pressure, by way of
competition, for excellence. The organization may not necessarily be the best on all or even one
of these parameters. HMT had a distinguished track record stretching sometimes over decades.
Such sustained high performance may require the institutionalization of good management
practices, and a high order of professional management. It may need top management continuity
and orderly succession through carefully selected successors chief executives well acquainted
with the organizations excellent traditions and norms of excellence. Also needed may be
widespread commitment of the staff to a vision of excellence and to core values related to this
vision, an elite community or clan culture, and a concern with long term excellence rather than
current expediencies.
The design for institutionalized excellence can be summarized as follows:

a) Mission, vision of excellence and core values:
For an organization to become institution it has to acquire high social and internal standing,
it should internalize a wider set of core values. These need to be anchored in not only the
organizations purpose and context, but also, wider social concerns such as socio-economic
development, and also in wider human concerns such as for justice, nurturance, autonomy
and self-actualization. The vision of excellence needs to extend beyond critical performance
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indicators to one of excellent quality of functioning(such as high professionalism or ethical

or demographic functioning) for society and staff to develop a deep stake in the
organization.
b) Management Style:
The professional participative style can ensure the institutionalization of values and norms
that internally and externally earn the status of an excellent institution. Such a style can
institutionalize in the organization such as systematic, expert-based, planned decision
making, ethical internal and external behavior, commitment to ideals, concern for human
resources and participative reasonably democratic decision making.
c) Policy Framework:
Polices of offering market orientation, team decision making, paternalism, human resource
development, emphasis on persuasion rather than power in dealing with the staff,
decentralization through a management by exception policy, and recruitment of innovative
young professionals constitute an effective policy framework for pursuing institutionalized
long-term excellence.
Institutionalized excellence is facilitated by comprehensive, sophisticated professional
management systems, complex differentiation under major divisions or responsibility
centers, a structure of participative decision making, sophisticated planning and human
resource development systems, and periodic comprehensive reviews of the organization
functioning.
e) Renewal Mechanisms:
Survey feedback, SWOT, long range forecasting and scenario building are some of the
mechanisms that can foster institutionalized excellence.
REJUVENATORY EXCELLLENCE:
Organization sickness is rather common today. There are many reasons for it. Political and
bureaucratic interference, complacency bred by low competitive pressures, erratic government
policies, unreliable or insufficient transport, communications, power and other infrastructural
facilities, turbulent industrial relations and inappropriate management. That is, the right norms,
values, practices and systems do not get internalized, with the result that modest unfavorable
changes in the operating environment can precipitate major bout of sickness.
Ex: Western Coal Fields, Pankaj Sinha’s stewardship of Pench, a coal division belonging to
the government of India tells how transformational leadership can rejuvenate the sick
organization. Sinha became the chief after a threatened closure of mines in Pench affecting 2500
jobs had made industrial relations turbulent. Far from a fall in production Pench could increase
its productivity by over33%, it reduced the losses to a great extent, reduced the accident rates and
received an award for best performance. As indicated the organization culture underwent a sea
change after Sinha took over with far better communications and more participative decision
making.
The chief characteristic of this form of excellence is vast improvement over previous
performance. Many organizational turnarounds from sickness or decline exhibits this form of
excellence. The sort of management that may be needed for this form of excellence is distinctive.
A strong high energy leadership that galvanizes the organization and leads from personal
example, quick pay-off options that restore faith in the ability of the organization to tackle
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problems and solve them successfully, a great deal of internal communication to mobilize the
rank-and-file for the great effort needed to rejuvenate the organization, negotiations with external
stakeholders like financial institutions, suppliers, and government for their support to rejuvenate
the effort, a culture of getting things done, quick fixes, improvisations, resourcefulness,
extensive participation of lower level staff in evolving a turnaround strategy and implementing it.
This revival is generally not through the force of charisma. It generally is achieved through
effective management actions.
The design for rejuvenatory excellence can be summarized as follows:

a) Mission, vision, core values:
Since the thrust of rejuvenatory excellence is to reclaim lost ground, thus missions need to be
few specific and local rather than global to provide a crisp rallying point. Core values need to be
anchored not only in the organizations purpose and context, but given widespread staff
demoralization, also in basic human urges like security, need for nurturance, autonomy and self-
actualization, that is, in values that uplift spirits and motivate people to put up their best.
Organizational rejuvenation comes in two phases. The first phase is one who revive a
demoralized, apathetic staff and restoring the confidence of suspicious external stake holders. An
entrepreneurial management style of bold decisions, result oriented, flexible style is important.
Once unfreezing from organizational paralysis has been accomplished, the task becomes one of
consolidating the gains and maintain momentum through a professional and participative style
that accomplishes systems building, expertise through a professional and participative style that
emphasizes system building would do good.
c) Policy framework:
While the policy framework for stabilization of recovery would be similar to that for
institutionalizing excellence, policies for excellent recovery consist of strong market orientation,
personnel management, recruitment of innovative and young professionals and seeking the
participation of external stake holders as partners and rehabilitating the organization.
d) Management systems and structure:
In the early phase of rejuvenation, the emphasis should be on rectifying glaring defects in
existing management structures and systems rather than on emplacing professional management
systems. Also, changes in structures and systems must depend heavily on the main cause of
sickness. If it is over-structuring some spring cleaning may be necessary, if it is under structuring
greater role clarity and standardization of activities may be needed. If it is over centralization,
decentralization may be useful, while if it is laissez-faire management, some centralization can
be called for.
e) Renewal mechanisms:
Useful tools are diagnostic survey, survey feedback, brainstorming, exnovation, action research,
participative redesign of work, image sharing, management by objectives, market surveys, use of
consultants to highlight grave discrepancies between current practice in the organization and
current best practice in the domain.
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MISSIONARY EXCELLENCE
There are many missionary organizations. Many are set up by the government, other by private
parties as enterprises, cooperatives, institutions or voluntary organizations. Even organizations
set up to pursue profits are expected to have a social conscience and work for the good of
society. But mission is not just altruism. An exalted mission attracts talented and dedicated
professionals, motivates employees to perform heroic deeds and make sacrifices, and attracts
financial and other support of the government and society. When missions are pursued
effectively, the benefits to beneficiaries are palpable. In some cases, effective pursuit of missions
can make a life or death difference to beneficiaries.
Ex: Indigenous Affairs Council (IAC), an American voluntary organization committed to
social development, intervened in Gatong, a rural community in Phillipines, with a view to
increase the income and quality of life members of the community and increase their sense of
identity. In four years of involvement in Gatong, a community of about 200 families, IAC was
able to increase annual family income by 350%, complete 19 infrastructure projects, decrease
infant malnutrition from 85% to 24% and lower birth rate from 45% to 30%. Elementary school
increased by over ten times. Formal training and seminars were an important part of IAC
strategy. Potential leaders were developed through training.IAC sought to change people’s
perceived inability to do anything about their own development.
Note worthy contributors to IAC’s success seem to be specific, local missions, a vision of
excellence closely tied to regeneration and improved quality of life, participation by clientele in
diagnostic and development activities, the use of local culture and local opportunities in pursuing
the mission, effective coordination of both social and economic activities.
The chief characteristic of this form of excellence is dedication to some social mission or ideal
and the ability to make outstanding progress in achieving this mission or deal. The goals are
altruistic and the resources are often limited. To achieve this form of excellence the organization
may need to attract dedicated professionals who do not mind meager salaries and poor perks.
Decision making need to be decentralized and participative.
The design for Missionary excellence can be summarized as follows:

a) Mission, vision and core values:
It is best to seek missionary excellence through achievable, specific, local few missions.
Then progress will be rapid, confidence gets built up, and mission enlargement becomes
possible. Core values need to be anchored on the development imperative. Commitment to the
value of client satisfaction can enable the organization to seek missionary excellence to turn the
client for their own good.
Altruism and participation are indispensable elements for pursuing missionary excellence.
Missionary organizations are however, often weak when it comes to management systems. Their
effectiveness can be greatly increased if profeesionalism and expertise are injected to their
decision making. Thus the most appropriate style for achieving missionary excellence may be the
altruistic participative professional style.
Policies of giving priority to social or national priorities over financial criteria in assessing new
ventures, integrity and honesty in business dealings, and nurturing of staff and development of
collaborative relations with unions and other external stakeholders constitute an appropriate
policy framework for pursuing missionary excellence.
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d) Management structure and systems:

Since networking with other organizations for mission accomplishment is indispensable, either
coopting them in organizations decision making structure (for example, by inducting their
representatives on the organizations board) or setting up a council of cooperating organizations
would be useful. To compensate for the often weak management systems for planning, financing,
implementing and evaluating projects need to be institutionalized.
Missionary excellence is facilitated by two sets of renewal mechanisms. Those that renew the
missionary organization and those that renew the organizations and systems of the targeted
beneficiaries. Mechanisms that renew the missionary organization itself are social learning
(learning from the organization mistakes, planning activities with the participation of
beneficiaries, linking knowledge to action and community beneficiary participation in
operations). Mechanisms that renew the organizations and systems of intended beneficiaries are
the mechanism of transformational leadership.
CREATIVE EXCELLENCE:
Creativity and innovation are of strategic importance to third world societies. Poverty and
backwardness are not the results of only lack of resources. Often they are the outcomes of social
conservatism, low spirit of adventure and experimentation, and fear of unfamiliar. Creative
excellence offers a competitive advantage to the organization, excitement ot it’s staff and useful
novelty to it’s client.
Ex: Mudra Communications, based in Ahmedabad, India, stood out during the eighties. Set up
in 1980 by Mr A.G Krishnamurthy as in-house agency of a major business group, by 1991 it had
become the third largest ad agency in India. While industry leaders barely doubled their billings
between 1983 and 1986, Mudra increased them 7 times. Mudra was distinctive in several ways:
Mudra set up a division called interact to identify small clients with potential growth.It set up a
in-house market research group called Samir to provide a strong advertising support function.
Mudra took up social responsilbility seriously in an industry not known for this virtue. Mudra
hired professionals to computerize its operations
The chief characteristic of this form of excellence is the commitment to pioneering,

innovation, experimentation, discovery and dynamic change. The organization is in a state of
continuous flux, shedding or modifying current activities, practices and products and adopting
new ones. There is much impatience with the status quo. A leadership rooted in expertise,
competence, and creativity rather than in formal position is likely. A culture of creativity and
innovation is likely to prevail.
The design for creative excellence can be summarized as follows:

a) Mission, vision and core values:
General, global, varied missions are more likely to spur organizational creativity than a narrow,
specific, single track mission. Besides compatibility with the purpose and operating context, core
values need to be anchored in the developmental imperative to simulate search for changes and
innovations. An entrepreneurial vision of turning into a unique, pioneering organization in it’s
domain also may sustain the pursuit of creative excellence.
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b) Management Style:
Entrepreneurial mode may be the most appropriate style for creative excellence.
Policies of rapid, opportunistic (rather than pre-planned) growth and diversification through risky
but high potential ventures, strong market orientation, recruiting innovative young professionals,
open channels of communication within the organization, decentralization, meritocracy and
professionalism in management constitute an effective package of policies for pursuing
excellence.
d) Management systems and structure:
For creative excellence, structures and systems must facilitate both the generation of innovations
and their effective implementation. To spawn creative ideas, organic, informal management
systems, global scanning for ideas and opportunities, a relatively flat hierarchy and large span of
control, a matrix flexible structure , a personnel management system that gives primacy to
creativity and resourcefulness in recruiting and promoting staff are needed.
It is not enough to sprout with innovative ideas. These needs to be developed, refined and
adopted by the organization. Identification and grooming of internal change agents to ensure the
adoption and stabilization of innovations would be useful for this purpose. Also useful would be
effective planning of innovations, their pilot testing, their periodic review, stabilization and scale
up.
VERSATILE EXCELLENCE:
In the third world, given its handicaps, not many organizations can excel. Even fewer can excel
at many tasks. The few that do are important nurseries of managerial talent and management
competence. Certainly, third world societies have the option of setting up organizations that
pursue specialized tasks. But so great are the demands on sizeable third world organizations that
often the latter tend to pursue multiple objectives. Especially in the public sector it makes sense
to understand the mechanics of versatile excellence.
Ex: Bharat Heavy Electricals Limited, a public sector owned by the government of India.
Founded in 1964 and enlarged through a merger with another public sector enterprises in mid-
seventies, by the mid-eighties BHEL had nearly 75000 employees, and was one of the twelve
largest manufacturers of power equipment in the world. Different achievements of BHEL are
summarized below:
BHEL supplies 90% of the power equipment installed in India. It has the widest range of
products and services in the world. It was able to secure technical collaboration with around 25
international giants based in various countries. It nurtured 200 small scale industries. It set up
management development institutes. It adopted over 20 villages and implemented welfare and
employment oriented projects in them. It planted a million trees.
The chief characteristic of this form of excellence is the desire and ability to meet the
expectations of all the significant stakeholders of the organization-owners, staff, suppliers,
customers, government, bankers, unions etc. The organizations have multiple goals,
corresponding to the diversity of expectations the organization is trying to meet. For example, it
may seek reasonable profitability to keep its owners happy, a good growth rate to create
opportunities for growth for its staff managers, a reputation for social responsibility to please the
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government, good customer service to placate customers, cordial industrial relations to keep
everyone happy.
The design for versatile excellence can be summarized as follows:

a) Mission, vision, core values:
Versatile excellence implies excelling at many tasks and commitments, and hence, in sharp
contrast to other excellences, for versatile excellence multiple, varied missions may be more
appropriate than single or few missions, although these too need to be specific and local rather
than global for focusing organizational energies. Core values need to be varied enough to permit
efforts in multiple directions. They need to be anchored not only in the purpose of the
organization and its operating context but also in society’s core values and impulses, especially
the developmental thrust, and also in the basic human urges. Visions of excellence also need to
be varied enough to attract the diversity of talented needed to pursue excellence on many fronts.
For many- sided excellence, the organization needs to build up varied strengths. This is best
secured through a dynamic professional and participative style of management supplemented by
an altruistic, idealistic style.
A global rather than a local perspective in choosing domains, technologies, plant locations,
management practices, etc can powerfully aid versatile excellence. Policies of networking with
external stakeholders for furthering multiple goals of the organization, staff commitment through
participative team decision making, and employee loyalty through paternalism should also
contribute significantly to versatile excellence.
Two structural alternatives are available for facilitating versatile excellence:
Set up several organization sub-systems each dedicated to the pursuit of a particular dimension
of excellence and train managers to pursue several objectives simultaneously. If the first option
is pursued, it would result in high levels of organization differentiation and powerful integrative
mechanisms need to be utilizes to prevent conflicts and poor coordination. If the second option is
pursued, a performance related management system should be designed, and a formal training
and job rotation system must be designed that builds into managers competencies related to
versatile performance.
e) Renewal mechanism:
Brainstorming to extend the applications of learning, changes, and innovations arising in one
parts of the domain or while pursuing one goal or the satisfaction of one class of stakeholders to
other parts of the domain or the pursuit of other goals or the satisfaction of other stakeholders
should also be useful to get the maximum mileage out of them.
EXTERNAL NURTURANCE OF OEGANIZATIONAL EXCELLENCE:

The ultimate responsibility for excellence rests with the management and staff of the
organization. But significantly auxiliary roles can be played by various agencies in promoting
organizational excellence. Let us consider the possible role of the following three:
A) The role of the Super system in promoting excellence:
Many sizeable organizations are legally owned and controlled by super systems. A public
enterprise is owned by the government and controlled by a ministry of the government. This
means that who gets appointed as the chief executive, what long-term investments the enterprise
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makes, and other major decisions are generally made not by the government agencies which
constitute the super system in which the enterprise is embedded. Similarly, significant
investment, personnel and other decisions of subsidiaries are often made by their holding
companies, of academic, health and other not-for-profit organizations by trusts or societies that
control them of cooperative societies by apex bodies etc.
The different behaviors of the controlling super system that contribute to the excellence of
the controlled system are as follows:
i) The selection of a dynamic professional committed to the missions and goals of the
organization and its controlling system is usually the single most important contribution by the
super system to the excellence of the organization.
ii) The controlling system should conduct a fairly frequent detailed performance review of the
organization to ensure that its management remains alert, knowledgeable and responsive to the
developments and thinks through issues and development options.
iii) Annually, the controlling system and the organization should agree on priorities for the
coming year. Some kind of a management by objective is appropriate.
iv) The super system should exert strong pressure for the attainment of agreed upon targets and
goals and at the same time must be highly supportive if the organization runs into unexpected
rough weather beyond its control.
v) The super system should grant to the organization a great deal of operating autonomy, holding
it accountable for performance rather than practices and procedures.
vi) Those at the super systems that monitor the organization need to be dynamic professionals.
vii) The super system must ensure management continuity at the organization.
viii) The super system should create opportunities for its controlled organization to learn from
one another and collaborate with one another.
B) The role of domain influencing institutions in promoting excellence:

Very many domains have domain influencing institutions. Associations of schools, chambers of
commerce, trade and industry associations, associations of professionals, industry research
institutions, apex cooperative societies, central banks, etc are examples of domain regulating or
influencing institutions. Often they act mainly as special interest lobbies, pressurizing the
government for concessions and special treatment of its members or they act to reduce
competition between members by fixing various norms of behavior in the market place. In the
third world, where organizations have to learn to master unfamiliar technologies both of
operations and management, these domain influencing institutions can play a very important role
in developing knowledge of good technical and management innovations and practices and
disseminating this knowledge to their members. They can pool information available with
members to develop more informed judgments about the future, such as forecasts can help
members make more realistic plans for the future. By employing experts in different areas,
domain influencing institutions can also provide counseling services to the smaller, more
vulnerable of their members. By organizing workshops, conferences, etc, they can facilitate
collaborate contacts between members which may fructify into joint ventures. They can also
articulate a vision of excellence for the domain, core values, missions for the domain, especially
its role in the socio-economic development of the nation, which can help members adopt the
right sorts of values, visions, missions, etc. In short, domain influencing institutions can become
significant disseminators of organizational excellence.
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C) The role of the government in promoting organizational excellence:

The role of the government in speeding up socio-economic development of poor countries is
vast. Opinions range from a minimal to a maximal role of the government (laissez faire at one
end to comprehensive state planning at the other), and also range over such alternative strategies
of economic development as free markets, export-led growth, concentration on heavy and basic
industries and infrastructure and emphasis on consumer goods. Yet another option that may give
a synergy with several of these alternative strategies is one of promoting organizational
excellence.
The government can play a big role in promoting organizational excellence. It can do so through
a variety of means, such as fostering both competition as well as collaboration within a domain,
setting big national goals and missions that energize the pursuit of excellence in strategic
organizations, rewarding organizational excellence and punishing sloppy organizational
performance, and creating enabling conditions for excellence.
CONCLUSION:
Sizeable organizations are quite complex, and their effective management and design is difficult,
especially in Third world conditions. But there are enough examples of organizational excellence
in third world contexts to suggest that given the right sort of design and management,
organizational excellence can be much more widespread. Several keys to organizational
excellence have been identified, namely, organizational passion (core values, missions, vision of
excellence); goals, polices, and operating niches; management systems and structures; and
learning, creativity, transformational leadership, and organizational development and other
behavioral science interventions. In present day scenario, altruistic, professional, and
participative modes of management can facilitate most of these excellences. So can the pursuit of
such organizational goals as faster growth, increased managerial skills, more dedicated pursuit of
social or national priorities, greater staff morale, higher operating efficiency, and a more
professionalized management (ad hoc, or intuitive management).
Although organizational excellence is mainly accomplished by the management of the
organization, certain external stakeholders can play important auxiliary roles in promoting it. The
owner/controller of the organization can play an important role, especially in promoting
institutionalized excellence, by choosing a dynamic professional committed to the missions and
goals of the organization.
Domain influencing institutions can amass knowledge of effective technical and management
innovations and practices and disseminate it to organizations operating in the domain. They can
facilitate collaborative contacts between organizations by organizing conferences, workshops,
etc. They can also articulate a vision of excellence for the domain, and propagate core values and
missions for the domain, especially its role in the socio economic development of the nation, that
can provide the right sort of perspective and values of the organizations operating in the domain.
The government can play a very important role in promoting organizational excellence. By
setting up a variety of strategic organizations that catalyze faster and more balanced economic
growth, improvement in the quality of life, and greater social justice, it can make possible the
birth of thousands organizations. Besides the creation and effective management of strategic
organizations, the government can spur excellence also by fostering competition as well as
collaboration within domains of activity, by setting big national goals and missions that energize
the pursuit of excellence.
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The designs are merely starting points for a better fit between the organization, its context, and
the kind of excellence it seeks to achieve. In other words, they are just models, not gospels, to be
adopted or adapted or discarded after trial. They are ideas to get going on the excellence journey.
These designs are not powered by some impersonal, anti-human rationality. Very likely, they
promote overall third world objectives. Their cornerstones are such values as altruism,
participation, pioneering, innovation, professionalism, human resource development, and social
contribution, not single minded profit maximization or domain dominance. More important,
these designs have been derived from excellent third world organizations that are alive with these
values.
--------------------------------------------********************--------------------------------------
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MODULE 3
Structural Dimensions of Organization design: Organization Design -Components of
Organization Design - Dynamic Balance – Organization structure, dimension - division of labor,
standardization, horizontal Differentiation, Advantages & disadvantages of Departmentalization;
Vertical Differentiation, Span of Control, Centralization, Formalization, Implication of High
Formalization, Flexibility.
manage the total organization as a whole. It involves designing the organization structure by
developing, changing etc.
of the enterprise.
formal relationships among groups and individuals. It provides guide lines for effective
employee performance and overall organization success.
FIVE APPROACHES TO ORGANIZATION STRUCTURE:

Managers must make choices about how to group people together to perform their work.
Five common approaches — functional, divisional, matrix, team, and networking—help
managers determine departmental groupings (grouping of positions into departments). The
five structures are basic organizational structures, which are then adapted to an
organization's needs. All five approaches combine varying elements of mechanistic and
organic structures. For example, the organizational design trend today incorporates a
minimum of bureaucratic features and displays more features of the organic design with a
decentralized authority structure, fewer rules and procedures, and so on.
A) FUNCTIONAL STRUCTURE:
expertise, and resources. Production, marketing, finance, and human resources are common
groupings within a functional structure.
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The functional structure

communication and authority/responsibility relationships. Not only can this structure
improve productivity by minimizing duplication of personnel and equipment, but it also
makes employees comfortable and simplifies training as well.
But the functional structure has many downsides that may make it inappropriate for
some organizations: They are:
a) The functional structure can result in narrowed perspectives because of the
separateness of different department work groups. Managers may have a hard time
relating to marketing, for example, which is often in an entirely different grouping.
As a result, anticipating or reacting to changing consumer needs may be difficult. In
addition, reduced cooperation and communication may occur.
b) Decisions and communication are slow to take place because of the many layers of
c) The functional structure gives managers experience in only one fields—their own.
together and understand their interrelationships and interdependence. In the long run,
this specialization results in executives with narrow backgrounds and little training
handling top management duties.
B) DIVISIONAL STRUCTURE:
Because managers in large companies may have difficulty keeping track of all their
company's products and activities, specialized departments may develop. These departments
are divided according to their organizational outputs. Examples include departments created
to distinguish among production, customer service, and geographical categories. This
grouping of departments is called divisional structure. These departments allow managers
to better focus their resources and results. Divisional structure also makes performance
easier to monitor. As a result, this structure is flexible and responsive to change.
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The divisional structure

However, divisional structure does have its drawbacks. Because managers are so
specialized, they may waste time duplicating each other's activities and resources. In
addition, competition among divisions may develop due to limited resources.
C) MATRIX STRUCTURE:
The matrix structure combines functional specialization with the focus of divisional
structure. This structure uses permanent cross-functional teams to integrate functional
expertise with a divisional focus.
The matrix structure
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functional group and a product, program, or project team. They also report to two bosses—
one within the functional group and the other within the team.
This structure not only increases employee motivation, but it also allows technical and
general management training across functional areas as well.
Advantages include:
Predictably, the matrix structure also has potential disadvantages.
Disadvantages Include:
• Members of the matrix may suffer task confusion when taking orders from more than
one boss.
• Teams may develop strong team loyalties that cause a loss of focus on larger
organization goals.
increased costs.
Team structure
Team structure organizes separate functions into a group based on one overall objective.
These cross-functional teams are composed of members from different departments who
work together as needed to solve problems and explore opportunities. The intent is to break
down functional barriers among departments and create a more effective relationship for
solving ongoing problems.
The team structure
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The team structure has many potential advantages.

Advantages Include:
Network structure
The network structure relies on other organizations to perform critical functions on a
contractual basis. In other words, managers can contract out specific work to specialists.
management Accounts recevables and
information billing
company core
Security Benifit Administration
The network structure

This approach provides flexibility and reduces overhead because the size of staff and
operations can be reduced. On the other hand, the network structure may result in
unpredictability of supply and lack of control because managers are relying on contractual
workers to perform important work.
DETERMINANTS OF ORGANIZATION DESIGN:
h) Strategy
i) Organization
j) Technology
k) Environment
l) Power-Control
m) Age
n) Size
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THE SIX KEY ELEMENTS THAT MANAGERS NEED TO ADDRESSS WHEN THEY
DESIGN THEIR ORGANISATION STRUCTURE ARE:
g) Work Specialization:
The degree to which tasks in an organization are sub-divided into separate jobs. Work
specialization in other words is division of labor.
h) Departmentalization:
The basis by which jobs are grouped together is called departmentalization. Popular ways
to group activities is by functions performed.
i) Chain of Command:
It is an unbroken line of authority that extends from the top of the organization to the
lowest and clarifies who reports to whom.
j) Span of Control:
The number of sub-ordinates a manager can efficiently and effectively direct.
k) Centralization and Decentralization:
The degree to which decision making is concentrated at a single point in an organization.
l) Formalization: The degree to which jobs within an organization are standardized.
OTHER STRUCTURES FOLLOWED ARE:
a) Simple structure: It is characterized by a low degree of departmentalization, wide span of
control, authority is centralized in a single person and less formalization.
b) The Bureaucracy: High routine tasks achieved through specialization, tasks are grouped into
functional departments, centralized authority and narrow span of control and decision making
follows chain of command.
c) The Pizza structure: Here hierarchy is abolished. Functions don’t have separate goals.
People work in self-directed teams or work teams. All managers are members of one such team.
d) The Spaghetti Organization: It is a new IT system which led to the virtual elimination of
paper. Focusing on technology to serve the end users.
e) The Fishnet Organization: It is flexible and adaptable. It can form and re-form while
retaining it’s inherent strength.
f) Empowered Organization: It is an organization in which individuals have the knowledge,
skills, desire and opportunity to succeed in a way that leads to collective organization success.
g) Virtual Organization: A small core organization that outsource major business function.
h) Boundary less Organization: An organization that seeks to eliminate the chain of command.
Have limitless span of control and replace department with empowered teams.
Divisional Structure:
An organization structure that groups employees around geographical areas, clients or output.
Three types of divisional structure are as follows:
(a) Product Departmentation/Structure
President/
Director Marketing
Marketing Marketing Marketing

Manager Manager Manager
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(Audio Products) Video Products ( Electronic)

Products
Supervisors Supervisors
Supervisors
(b) Geographic Departmentation/Structure
General Manager
(Marketing)
Manager Manager Manager Manager

Marketing Marketing Marketing Marketing
(Sales) (Sales) (Sales) (Sales)
Northern Southern Western Eastern
Region Region Region Region
(c) Mixed Departmentation/Structure
CMD (Chairman and Managing Director)

Director Director Director H R D Director Director
Financing Production Marketing R&D
GM FINANCE G M PROD GM (KGF) REGIONAL GM R & D

(KGF) DIVISION GM MANAGERS (KGF)
GM FINANCE BANGALORE BANNGALORE
(BANGALORE) COMPLEX COMPLEX DISTRICT GM (R & D)
G M FINANCE ED TRUCK GM (MYSORE MANAGERS BANGALORE
(MYSORE) DIVISION DIVISION) ED, SALES GM (R & D)
SERVICES MYSORE
GM STORE
PARTS
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One of the most comprehensive and rational approach for classifying structures was
proposed by Mintzberg (1980-1983).
According to him an organization can be seen as composed of five basic parts. They are:
f) The Strategic Apex: It consists of the top level management in-charge of the overall
organizations. It may consist of a top management team or a single individual.
g) The Operating Core: This consists of employees who perform the basic work related to
the production of goods and service for which the organization is meant.
h) The Middle Line: This consists of the people who connect the strategic apex to the
operating core. These are intermediate managers who transmit, control and help in
implementing the decisions taken by the strategic apex.
i) The Techno structure: This consists of staff functionaries and analysts who design
systems for regulating and standardizing the formal planning and control of the work.
j) The Support Staff: It consists of people who though not directly involved in the work
process provide indirect support to it. Services like cafeteria, mailing, transport etc
Comparison of Tall and Flat Organizational Structures
Tall Organization Structure Flat Organizational Structure

(Narrow span of control) (Wide span of control)
Needed when:
Closer control and monitoring is required. More autonomy and self control is required.
Mistakes are likely to be costly. Flexibility and innovation is required.
Tasks/roles are clear; require specialization. Ambiguous tasks and roles; specialization
doesn’t work.
Routine technology. Non-routine technology.
Inexperienced subordinates. Experienced subordinates.
Placid, stable environment. Unstable, turbulent environment.
Dysfunctional consequences:
Discourages initiative, encourages Lack of proper control; encourages laissez-
centralization. faire.
Bottlenecks, distortion of vertical Too much demand on the manager for
communication. coordinating.
Slow promotion. Reduced promotional opportunities.
COMPONENTS OF ORGANISATION DESIGN:

For any practicing manager, designing the organization would involve converting his/her
understanding of the influences, into tangible organizational structures. An effective structure
would be one which can successfully cope with these demands and constraints. But in order to
design such an organization, the manager must also be aware of the building blocks of an
organization structure. It is necessary therefore, to consider what constitutes the organizational
structure.
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It is still possible to identify some of the significant and empirically verified components of the
organization. Even though, the terms used by the researches have varied, there are sufficient
overlaps in their decision to make it possible to integrate the findings under three major
components: Complexity, Formalization and Centralization.
A) COMPLEXITY:
Complexity refers to the “degree of differentiation that exists within the organization. (Robins
1987) “. It focuses on the number of specific jobs, roles, hierarchical levels, work centers, etc, in
the organization. The greater the differentiation in the organization, the more complex would be
the organization.
The more complex an organization, the greater is its need for devising more complex
mechanisms for control, coordination and communication. When an organization is not very
complex, the activities of its members can be controlled and coordinated through simple
mechanisms, such as informal communications and a few rules and procedures etc. With
increasing complexity, these simple mechanisms become ineffective. To reduce the uncertainty
in decision making, more expensive and sophisticated mechanisms are required by the
organization. One finds highly complex organizations using a variety of such control and
coordination mechanism, e.g, coordination committees, computerized information system, policy
manual etc.
Organizations can be complex in three ways:

a) Horizontally (the degree of differences in the nature of jobs in the organization.)
b) Vertically (the number of hierarchical levels, or the depth in the structure.)
c) Spatially (the degree of the geographical separation among the work units.)
a) HORIZONTAL COMPLEXITY:
Horizontal complexity refers to the degree of differentiation between the organizations
units/subunits in terms of the nature of work, requirements of skills and knowledge and
employee orientations. Other terms used to describe horizontal complexity in research literature
are differentiation, division of labor, departmentation and functional specialization.
Horizontal complexity is often an organization’s way of coping with increase in the quantum and
complexity. They tend to break up their total task into specialized jobs and functions, which are
then manned by personnel with specific expertise and skills.
b) VERTICAL COMPLEXITY:
Vertical complexity refers to the hierarchical levels that exist between the top management and
the lowest level operations in the organization. Increase in vertical complexity is often the
organization’s response to increase in the horizontal complexity. When organizational activities
become more and more segmented and specialized, it becomes more difficult for the different
organizational subunits.
To understand the part they play in the achievement of the total organization goal. Somebody is
required to integrate and coordinate and ensure that the work is being performed according to the
plan. This need for supervision and coordination results is increased vertical complexity.
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If the number of hierarchical levels is more, the problems involved in managing the organization
also increase, there is greater potential for distortion of communication across hierarchies, there
is greater demand for coordinating the managerial decisions taken at different levels, and the
senior levels of management become more distant from the operating core. On the other hand,
the flat organizational structures have their own problems, such as more managerial pressures on
the executives, lesser promotional opportunities, etc. And whether an organization should opt
for a tall or flat organization would depend on a number of factors.
c) SPATIAL COMPLEXITY:
Spatial complexity refers to the degree to which the subunits and personnel of an organization
are geographically separated. An organization may continue to have the same number of
occupational roles and departments (horizontal complexity) and hierarchical levels (vertical
complexity), but if it decides to geographically separate its activities, this would introduce
additional requirements for control and coordination of these activities. These requirements arise
out of increased spatial complexity.
Many organizations cope with the spatial complexity by having their own corporate service,
wireless system or hotlines. The advent of more efficient telecommunication systems and
computer technology has also helped the organizations to overcome the problems of
communication and coordination. The use of such corporate mechanisms however does not
mean that the complexity induced by spatial separation can be eliminated. Rather, in devising
methods to counter spatial complexity, organizations become more and more complex (e.g.. a
new department would have to be setup to look after the courier service.)
B) FORMALISATION
Formalization refers to the degree to which jobs in an organization are standardized. Greater
formalization would reduce the employees’ discretion in dealing with their work. By introducing
detailed rules, meticulous work-procedures and clear job descriptions, organizations ensure that
any input is handled in a standard manner so as to produce a uniform output. On the other hand,
less formalization would mean that the jobs are less programmed and provide sufficient
discretion to the employees to exercise choices in dealing with their work.
There can be various reasons for an organization to introduce formalization:
f) Formalization of jobs reduces the availability of outputs. By protecting the output
from human and incidental variations, the organizations can ensure that its quality
standards are maintained. As mentioned earlier, in most pharmaceutical companies, the
sales presentation made by the medical representatives to the doctors is standardized to
the extent of sales talk and even the gestures and intonations. This ensures that the
representative is able to effectively communicate maximum information about the
products to the doctors within the short appointment time.
g) Formalization is one way of dealing with the complexity of management problems.
If the work-process involves a number of specialized, but interdependent jobs, the need to
coordinate these activities also increases. For example, a typical assembly line consists of
a number of specialized operations which are linked with each other serially. By
formalizing the activities for each work-centre on the assembly line, the organization
achieves coordination among these activities.
h) Formalization reduces the need for direct supervision and control. This helps by
ensuring more time available to the manager for other planning and problem solving
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activities. Once the specific jobs/activities have been standardized the manager need not
get directly involved in routine supervisory activities, these can safely delegate down the
line. Thus, formalization leads to more efficient use of the managers’ time.
i) By reducing the discretions in doing the job, formalization also reduces the chance of
mistakes occurring in the execution of the job. Mistakes, after all, means loss of
money.
j) Lastly, the greater the discretion in the performance of the job, the greater would be
the need for exercising a judgment by the incumbent. Obviously, a job which entails a
greater professional judgment would cost the organization much more in terms of the
employees’ salaries, perks, benefits, etc. For example, if the job is to recruit and organize
a work-force for maintaining a newly commissioned plant, without any formal guidelines
whatsoever, finding the right incumbent might cost the organization a lot of money. On
the other hand, if there are comprehensive guidelines for recruitment policies and
procedures, this job can be handled by a less experienced person-naturally, at a lesser
salary.
Comparison of Organizational and Professional Formalization
Organizational Formalization Professional Formalization
Usually achieved through rules, Usually achieved through years of

procedures, job-descriptions, etc. professional training.
Focuses primarily on molding the external Focuses primarily on the internal attitudes
behavior of the individual. and orientations of the person.
Based on extrinsic rewards and Based on internalized values and

punishments. socialization.
Most often used for routine, unskilled Most often used for skilled, non-routine
work. work.
Formalization Techniques
e) Selection and Recruitment:
The hiring practice adopted by the organizations is one of the most widely used method
for controlling discretion and formalizing employee behavior. Organizations select their
employees on the basis of certain well defined criteria. Besides assuring themselves that
the person has the technical skills and qualifications. Organizations also assess the
candidate through interviews, group discussions, background investigations, etc. to check
how well the person will “fit” into the organization. The person is screened for his
attitude, manners, work and social habits, even dress appearance.
f) Role/Job Description:
The specification with which the jobs are defined in the organization plays a crucial role
in regulating employee behavior. Organizations make a considerable effort to create job
descriptions which spell out the do’s and don’ts of any job. These role definitions not
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only describe what the job entails, but often also how the activities required for the job
are to be performed.
g) Rules and Procedures:
Rules and procedures constitute a detailed program for guiding, molding and regulating
the employee can or cannot do, whereas the procedures explicitly describe the sequence
of behaviors an employee must go through to get anything accomplished within the
organization. It is important to note that organizations have rules and procedures, not
only for organizational work, but also for issues relating to the employee’s personal life.
h) Training: One of the most widely accepted methods adopted by the organizations to
instill desired behavior patterns among their employees is through conducting training
programs. Many organizations except their freshly inducted employees to go undergo an
induction program before allocating specific work assignments. This involves
familiarizing them with the company’s philosophy, history, procedures, personnel
policies, etc. Such an induction program aims at communicating the opportunities as well
as the constraints which an employee can expect to encounter while working for the
company.
IMPLICATIONS OF HIGH FORMALIZATION:
The organizations designed on bureaucratic principles are characterized by high degree of
formalization.
In organizational where formalization is high:
a) These devices will increase the profitability of conformance leads to an over concern
with strict adherence to regulations which induces timidity, conservatism.
b) Displacement of sentiments from goal onto means is fostered by the tremendous
symbolic significance of the means (rules).
c) This leads us to the primary dysfunctional forms of behavior found amongst bureaucratic
persons. Bureaucratic behavior results when a person values the rules more than the goals
of the organization.
In organizational where formalization is low:
a) Their members enjoy high degree of autonomy in using their own judgment in meeting
the demands of their work.
b) The employees are always encouraged to generate options and chose the one best suited
to the needs of the specific situation.
c) They have the operational freedom that helps them in adapting to complex, ambiguous
and uncertain task and situation.
C) CENTRALISATION
The third building block of organizational design is the level of centralization (or
decentralization) in decision making. Centralization/Decentralization is an important dimension
of organizational effectiveness, since it refers directly to how appropriately and swiftly the
organization is able to deal with critical issues and arrive at relevant decisions.
Hage defined this dimension as the proportion of jobs whose occupants participate in decision
making and the number of areas in which this participation takes place. Similarly,
Reimann described centralization as reflecting the locus of decision making, with respect to
major and specific policies, the degree of information sharing between levels, and the degree of
participation in long-range planning..
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In the light of the above definitions, it is important to qualify our understanding of this
concept with a few salient points:
a) Centralization/Decentralization refers to the distribution of formal authority within the
organization. It is quite likely that there are informal coalitions and leaders in the
organization who may have influence over the decisions. This, however, cannot be
interpreted as affecting the level of centralization in the organization.
b) Centralization of decision making may be with a single person, unit or level. This single
point, however, should be placed at a higher level in the organization.
c) If decision making is delegated down the line, but there are elaborate formalized policies,
systems and rules which constrain the discretion of the employees, this cannot be
understood as decentralization. On the other hand, many organizations provide
discretionary powers to the lower levels, but also develop information-systems to keep
the top management aware of the decisions that are taken. If the information-system only
helps the top management to monitoring without hindering with the decision making
authority of lower levels, it cannot be understood as centralization. Thus, the
centralization-decentralization issue needs to be understood in terms of the amount of
discretion available with the decision-maker rather than the point at which the decision is
being taken.
CENRALIZATION AND DECENTRALIZATION
It would be simplistic to treat centralization and decentralization either as choice in the
organizational design. As we saw in the previous section, there are various shades and levels of
centralization (or decentralization). Thus, there is no totally centralized or decentralized
organization. Rather in practice, the designing decision focuses on the specific activities and
decision areas which need to be centralized or decentralized, and the extent to which this would
be appropriate for organizational effectiveness.
In order to take such designing decisions, one must be aware of the relative advantages and
disadvantages of centralization and decentralizations. Classical organizational theorist, Fayol,
argued for a balance between the two, which of course, is a truism. The critical issue is the side
towards which the balance should tilt. Many recent writings (e.g, Toffler, 1981; Huber, 1984;
Naisbitt and Auberdene, 1985, etc.) point out the need for greater decentralization in the coming
times. They argue that with the increasing complexity of demands in the organization, it would
no longer be feasible to centralize the decision making process. Organizational decisions would
require more heterogeneous inputs, swifter implementation and greater flexibility.
SPAN OF CONTROL:
It refers to the number of subordinates with report directly to a superior to facilitate vertical
coordination and effective supervision of sub ordinates. The concept of span of control is
important because it defines the number of levels in the management. In small or flat
organization normally span of control varies from 5 to 25 from top management level to junior
management level.
FACTORS INFLUENCING/ (DETERMINING SPAN OF CONTROL)
a) Skills and abilities of the managers and employees.
b) Characteristics of the work being done/nature of jobs.
c) Training and experience of the work being done/nature of jobs.
d) Simplicity of employee’s tasks.
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e) Complexity of employee’s tasks.

f) Physical proximity of subordinates.
g) Degree to which standardized procedures are in place.
h) Sophistication of organization’s information system.
i) Strength of organization’s culture.
j) Preferred style of the manager.
k) Rate of change of activities and personnel.
l) Clarity of instruction and delegation.
DYNAMIC BALANCE:
A sound organization should seek to establish balance between various subsets of the
organization. Work system, technology, structure, process, people, organization and
environment. All the subsets are in a state of continuous flux and constant change. Therefore
achieving balancing amongst them has to be a dynamic process built into the design of the
organization. In other words, the organization design must be flexible enough to allow
adjustments as and when any or all subsets undergo change. The design of organization must
thus seek to establish congruency amongst the following subsets.
a) Individual-Organization:
Individuals join organization to seek satisfaction of their needs and pursue their own goals.
Organizations on the other hand have their own set of goals and tasks to accomplish. There may
often be conflict, for example between the need for autonomy that individuals value most and
demand of conformity to standardized procedures of the organization. The tightly structured
organizations will not be conducive for employees to use discretion, and take high risk decisions.
An individual organization environment will have to be created by building in flexibility in the
structure and processes so that employees can take initiatives and use their own judgments. The
design of the organization should seek to integrate the individual goals with the goals of the
organization to be able to obtain commitment from the employees.
b) Individual-Work:
The work system is conveniently designed to meet the techno economic criteria of efficiency
based on the assumption of supremacy and technological imperatives. Human needs are
considered to be subservient to the technological requirements. Most individuals however seek
the satisfaction of their higher level needs of learning growth and accomplishment and self-
fulfillment. The design of work must incorporate these concerns to enable employees to give
their best to the organization. The design of work based on assembly line concept for example
gives rise monotony and boredom resulting in reduced job satisfaction. Frustration sets in as
employees attempt to pursue their higher level needs gets thwarted. Finding an optimum fit
between the needs, expertise and skills of the employees and the work organization is yet another
challenge in most organizations.
c) Work-Organization:
The design of jobs and work units needs to be derived from the strategic objectives of the
organization. Grouping of various activities and tasks should respond to such concerns as cost,
quality, speed and employee involvement. There are three basic approaches being adopted by
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organizations based on strategic considerations. First is the approach based on classical theory
where task is broken up into smaller components, operations are standardized and tight
managerial control is exercised. The second approach is process design often called process re-
engineering. The focus here is on design of work processes asset of related activities leading to
creation of value added product or services to customers. The third approach can be called high
performance work systems which combine both the process design and the concept and self-
managing teams with overlapping and interchangeable responsibilities.
The choice of work unit design should be consistent with the strategies that an organization
pursues and motivational requirements of the employees.
d) Organization-Environment:
Organizations as open systems are in continuous interaction with the environment such that their
survival depends on the extent to which their strategies, structures, processes and culture are
aligned with the relevant segments of the environment. As the environment is always in a state of
flux, it is imperative on the part of the organization to adjust to the emergent demands by
adjusting change in various components of internal systems. With increased pace of change in
Information Technology, for example, it is necessary for an organization to restructure it to
enable adoption and successful implementation of IT enabled services. Likewise the growing
pressure on organization to conform to ethical standards has increased accountability and
transparency in organization. These forces have caused a great sense of urgency to effect in the
internal system of working of an organization.
A) ADVANTAGES OF SPAN OF CONTROL

a) Significant reduction in administrative costs.
b) More effective and efficient organization communication.
c) Faster decisions and closer interaction.
d) Recruitment such that all personnel become a better trained, informed and educated.
e) Better leadership at all levels.
DISADVANTAGES OF SPAN OF CONTROL

a) Cost of additional layers of management
b) Increased complexity of vertical communication
c) Encouragement of overly tight supervision and discouragement of employee autonomy.
B) ADVANTAGES OF DIVISION OF LABOUR

a) High efficiency
b) Low skill requirement
c) Less time and cost in training
d) High standardization and uniform output
DISADVANTAGES OF DIVISION OF LABOUR

a) Routine tasks leading to monotony
b) High costs of supervision
c) Full potential not utilized
d) Low job satisfaction
e) Lack of identification with total problem/process
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f) No learning challenges
g) Increased need for co-ordination and control
C) ADVANTAGES OF DEPARTMENTALIZATION
a) Skill development
b) Economies of scale
c) Good co-ordination
d) High efficiency
DISADVANTAGES OF DEPARTMENTALIZATION
a) Lack of communication across departments
b) Employee’s identity with the department will be less
c) Slow response to external demands
d) Narrow specialization
D)RELATIVE ADVANTAGES AND DISADVANTAGES OF CENTRALIZATION

AND DECENTRALIZATION:
Centralization Decentralization
Advantages: Advantages:
Uniformity of policies, standards and actions. Greater flexibility and appropriateness in

responding to local situations.
Enables closer control and coordination. Allows top management to focus on policy issues.
Maximizes economies of scale; eliminates Facilitates intra-unit communication.

duplication.
Reduces risk-factor in decision making by less Increases morale and commitment. Creates
informed or less skilled subordinates. healthy competition among units.
Disadvantages: Disadvantages:
Causes alienation and lack of initiative. Causes conflicts of goals and interests among
units.
E) ADVANTAGES OF FORMALIZATION:
a) Formalization of jobs reduces the availability of outputs.
b) Formalization is one way of dealing with the complexity of management problems.
c) Formalization reduces the need for direct supervision and control.
d) Formalization also reduces the chance of mistakes occurring in the execution of the job.
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DISADVANTAGES OF FORMALIZATION:
a) High formalization leads to an over concern with strict adherence to regulations which
induces timidity, conservatism.
b) High Formalization leads us to the primary dysfunctional forms of behavior found
amongst bureaucratic persons. Bureaucratic behavior results when a person values the
rules more than the goals of the organization.
c) And in organizations where formalization is low, their members enjoy high degree of
autonomy in using their own judgment in meeting the demands of their work.
FLEXIBILITY:
The design of the organization should be flexible enough to allow for adaptation to changing
demands of the environment by realigning various subsystems or components of the
organization. No organization exists in a truly static and homogenous environment. Therefore all
organizations need to be flexible and adaptive.
The design based on narrow individual specialization places constraints on the flexibility in
redeployment. Organizations designed around teams consisting of members with broad multiple
skills are better placed to optimally utilize the available skill sets in undertaking variety of tasks.
Broad framework of rules provides operational freedom to employees enabling them respond to
engineers of work arising out of increased uncertainty. Single rigid hierarchical structure places
constraints on adopting new technologies and diversifying activities.
Innovation that is the ability to generate more effective and efficient ways of operating the key to
success of organization in a hyper competitive environment. Structure should encourage
innovation through rearrangement of organization resources and adoption of appropriate
communication and information system.
Structure can provide for decentralization which allows for the placement of decision centers
closest to the source of problems. Structure can encourage changes in the organization processes
as required.
Finally, structures itself should change in response to the environment and needs of the
organization.
------------------------------------************************---------------------------------
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MODULE 4
Contextual Dimensions & Structural Options:
Contextual Factors, types of structure, Influence of: Environment, Strategy, Size & Technology
and Power & Politics on Structure, Flat structure
Structural dimensions:
Centralization -the extent to which functions are dispersed in the organization, either in terms of
integration with other functions or geographically
Formalization - regarding the extent of policies and procedures in the organization
Hierarchy - regarding the extent and configuration of levels in the structure
Routinisation - regarding the extent that organizational processes are standardized
Specialization - regarding the extent to which activities are refined
Training - regarding the extent of activities to equip organization members with knowledge and
skills to carry out their roles
Contextual Dimensions:
Culture - the values and beliefs shared by all (note that culture is often discerned by examining
norms or observable behaviors in the workplace)
Environment - the nature of external influences and activities in the political, technical, social
and economic arenas
Goals - unique overall priorities and desired end-states of the organization
Size - number of people and resources and their span in the organization
Technology - the often unique activities needed to reach organizational goals, including nature
of activities, specialization, type of equipment/facilities needed, etc.
formal relationships among groups and individuals. It provides guide lines for effective
employee performance and overall organization success.
FIVE APPROACHES TO ORGANIZATION STRUCTURE:

Managers must make choices about how to group people together to perform their work.
Five common approaches — functional, divisional, matrix, team, and networking—help
managers determine departmental groupings (grouping of positions into departments). The
five structures are basic organizational structures, which are then adapted to an
organization's needs. All five approaches combine varying elements of mechanistic and
organic structures. For example, the organizational design trend today incorporates a
minimum of bureaucratic features and displays more features of the organic design with a
decentralized authority structure, fewer rules and procedures, and so on.
A) FUNCTIONAL STRUCTURE:
expertise, and resources. Production, marketing, finance, and human resources are common
groupings within a functional structure.
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The functional structure

communication and authority/responsibility relationships. Not only can this structure
improve productivity by minimizing duplication of personnel and equipment, but it also
makes employees comfortable and simplifies training as well.
But the functional structure has many downsides that may make it inappropriate for
some organizations: They are:
d) The functional structure can result in narrowed perspectives because of the
separateness of different department work groups. Managers may have a hard time
relating to marketing, for example, which is often in an entirely different grouping.
As a result, anticipating or reacting to changing consumer needs may be difficult. In
addition, reduced cooperation and communication may occur.
e) Decisions and communication are slow to take place because of the many layers of
f) The functional structure gives managers experience in only one fields—their own.
together and understand their interrelationships and interdependence. In the long run,
this specialization results in executives with narrow backgrounds and little training
handling top management duties.
B) DIVISIONAL STRUCTURE:
Because managers in large companies may have difficulty keeping track of all their
company's products and activities, specialized departments may develop. These departments
are divided according to their organizational outputs. Examples include departments created
to distinguish among production, customer service, and geographical categories. This
grouping of departments is called divisional structure. These departments allow managers
to better focus their resources and results. Divisional structure also makes performance
easier to monitor. As a result, this structure is flexible and responsive to change.
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The divisional structure

However, divisional structure does have its drawbacks. Because managers are so
specialized, they may waste time duplicating each other's activities and resources. In
addition, competition among divisions may develop due to limited resources.
C) MATRIX STRUCTURE:
The matrix structure combines functional specialization with the focus of divisional
structure. This structure uses permanent cross-functional teams to integrate functi
The matrix structure
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functional group and a product, program, or project team. They also report to two bosses—
one within the functional group and the other within the team.
This structure not only increases employee motivation, but it also allows technical and
general management training across functional areas as well.
Advantages include:
Predictably, the matrix structure also has potential disadvantages.
• Members of the matrix may suffer task confusion when taking orders from more than
one boss.
• Teams may develop strong team loyalties that cause a loss of focus on larger
organization goals.
increased costs.
D) Team structure
Team structure organizes separate functions into a group based on one overall objective.
These cross-functional teams are composed of members from different departments who
work together as needed to solve problems and explore opportunities. The intent is to break
down functional barriers among departments and create a more effective relationship for
solving ongoing problems.
The team structure
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The team structure has many potential advantages.

Advantages Include:
E) Network structure
The network structure relies on other organizations to perform critical functions on a
contractual basis. In other words, managers can contract out specific work to specialists.
management Accounts recevables and
information billing
company core
Security Benifit Administration
The network structure

This approach provides flexibility and reduces overhead because the size of staff and
operations can be reduced. On the other hand, the network structure may result in
unpredictability of supply and lack of control because managers are relying on contractual
workers to perform important work.
MACHINE BUREAUCRACY
Machine bureaucracies are probably the most popular, and yet most criticized of all
organizational structures. Indeed, the most popular connotation of bureaucracy is that of a giant,
inefficient and impersonal system. And yet, without such bureaucracies there would be no
railways, transport more than one crore people every day from one place to another, no postal
department to deliver crores of letters or mass manufactured consumer goods industries or public
utilities.
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Machine bureaucracies are characterized by coordination of work through a high degree of

standardization of work, which results in low-skilled, highly specialized jobs. This
standardization is maintained by laying down extensive formalized rules and procedures for
regulating organizational activities and work-flow. The division of labour is sharp, and activities
and roles are divided into functional groups.
Since the whole organization depends on standardization of behavior, technostructure is the key
element of this configuration highly elaborated and differentiated(ex: industrial engineers,
quality engineers, financial analysts, cost and works accountants whose sole task is to develop
norms of work behavior and activities, and to ensure greater effeciency and reliability on others
work. To ensure implementation of rules, procedures and systems, these organizations also
develop a very large and elaborate middle management cadre. The middle management is also
functionally grouped, so that the formal power and control is centralized at the top.
Since the smooth functioning of machine bureaucracies is always threatened by changes, they
tend to seek stable environments to function, as well as to stabilize the environments in which
they operate.
The Indian Railways: World’s Largest Machine Bureaucracy
The Indian railway is the largest railroad network in the world, with its tracks covering a stretch
of 62,000 km. It transports almost one crore people every day, and carries almost about 30
million tons of freight every year and all this at a ridiculous low rate. To provide such a large
volume of service, the organization employees about 1.62 million people, making it the single
largest employer in the world. The supervisory and managerial cadres of the railways comprises
of about 27000 people, who manage its 11 functional department and 9 operational zones. Over
the years, while some operational decentralization has taken place, the functional hierarchy of
commands and centralization is maintained. For instance, the railway does its own collection and
accounts of cash received, brings it to a central organization before depositing in the bank.
Similarly, the disbursement of salaries is still predominantly done though cash, with the cashier
going to the outline station and handling over the salaries to the employees in their hand.
The complexity of the structure can be gauged from the fact that there are about 700 job
categories in the organization, which is spread over its 58 division. Apart from the 1000s of
railway station across the country, the railways has about 60 technical maintenance work shops,
5 central training institutes, about 150 odd training centers and schools and a centralized R&D
facility. In addition to all this, there are also many misc department such as stationary, printing,
rubber technology, mining , engineering, chemical etc .
That is why, one often finds them maintaining a large support staff – cafeteria, transport,
townships, hospitals, legal councils, etc. –which helps them in influencing and stabilizing their
environment. It is for this reason also, that this organization tend to integrate vertically.
It is not surprising that these organization tend to grow very large. In a way, the size is an asset
for them, since it gives them sufficient resources not to get influenced by miner fluctuation in the
environment. On the other hand , this stability also encourages them to further bureaucratise
themselves in order to control their work activities. It is these characteristics which make these
organizational configurations deal for producing goods and service on a large scale in a reliable
manner.
As long as the environmental demands remain simple and predictable, machine bureaucracies are
probably the best instruments of doing things economically and efficiently. By substituting rules
and procedures for decisions, they work on low requirements of operational and managerial
skills, thereby saving costs. Their large sizes and volumes help them in achieving economies of
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scale. On the other hand, by fractionalizing and segmenting the jobs, they also create monotony
and inter-functional conflicts.
Strengths and Weakness of Machine Bureaucracies

Strengths:
a) Achieves efficiency through specialization
b) Encourages development of functional expertise
c) Low cost of operational and managerial expertise
d) Centralize strategic decisions giving a focus to organization
e) Large size and standardization promotes stability
Weakness:
Promote narrow functional specialization and potential functional rivalry
Experience difficulties in inter-functional coordination and decision making
High costs of coordination and support
Limit internal development of general managers
Find difficult to innovate and adequately respond to environmental changes
PROFESSIONAL BUREAUCRACY
These are complex tasks, requiring sophisticated skills, yet they have to be performed on a
routine basis and on a mass scale. To achieve this end, organizations develop a structural
configuration which Mintzberg termed it as professional bureaucracy. These configurations are
similar to machine bureaucracy because their work processes and activities are highly
standardizes and routinized. But this is where the similarity ends. While the machine
bureaucracy coordinates through the standardization of work, the professional bureaucracy
achieves the same aim by standardizing the skills. That is, instead of exercising control and
coordination through enforcing rules and procedures, these organizations achieve reliability of
performance by employing trained professionals to mangege their operating core because it
largely involves complex skills and cannot be broken into smaller low-skilled tasks. Hospitals,
universities, and institutions of higher learning(IIT’s and IIM’s), consultancy agencies, chartered
accountancy firms, research organizations, etc are typical examples of professional
bureaucracies.
Strengths and Weakness of Professional Bureaucracies

Strengths:
a) Can accomplish complex, but known, tasks efficiently on a large scale.
b) Provides conducive work environment for professional
c) Is a democratic structure which can successfully tap specialized expertise for organized
purpose.
Weakness:
a) Would find it difficult to innovate.
b) Norms of profession supersede internal authority in organization functioning
c) Internal politics and rivalry among professionals may lead to loosing synergy and focus
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ADHOCRACY
Adhocracies are characterized by a high amount of complexity, non-standardisation and fluidity
of processes. Given the innovative nature of work, any kind of standardization is difficult. To
manage the complexity of job requirements, these organizations employ highly specialized and
trained experts, and work with low levels of formalization in a highly organic manner. They
cannot rely on standardized skills for achieving coordination. Coordination is achieved through
mutual adjustment.
Mintzberg distinguished between two kinds of adhocracies:
The operating adhocracies and the administrative adhocracies.
Operating adhocracies: (they take up projects on behalf of clients and the treat clients problem as
unique requiring a creative solution. They create an organic as whole, in which managers, staff
and operating experts work together as a project team in highly fluid relationships.
Administrative adhocracies: (They take up projects on its own behalf).Here the innovative work
is carried out by a team comprising of managers and staff experts, while the operating
component, which executes the ideas, works separately in a standardized manner.
Strengths and Weakness of Adhocratic Structures

Strengths:
a) Encourage innovation and initiative
b) Are flexible and responsible to changing environments
c) Discourage empire building through cutting across functional role/boundries
d) Provide a good training groung for strategic managers
Weakness:
a) Are inefficient in utilization of resources
b) Increase stress through inherent role ambiguity
c) Encourage people tto use political means for achieving their ends
d) Weak control structure and low personal accountability
ENVIRONMENT:
Environment is everything outside an organizations boundary. It’s concern is about specific
environment that are more relevant to the organization.
Management desires to reduce uncertainty created by this specific environment.
ORGANISATION ENVIRONMENT
What is Environment?
Miles (1980) said about the organizational environment as “Just take the universe, subtract from
it the subset that represents the organization, and the remainder is environment”. One needs
greater analytical rigor for understanding the organizational environment. The above definition
describes the general environment, which includes a wide array of factors, ranging from the state
of economy to such influences as the state of technology, cultural factors, etc.
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ENVIRONMENTAL IMPACT ON ORGANIZATIONS:

In spite of the complications which one faces in trying to define what exactly would constitute an
organizations environment, different kinds of environments do have a more or less discernable,
even predictable, influence on the organization(its structure, control systems, culture etc.)
Organizations have a tendency to mould themselves to adapt to the environment. There are three
important frameworks which environmental forces influences and mould the organization.
A] Burns and Stalker: The Mechanistic and Organic Organizations

Their findings state that organizations operating in stable environment are very different from
those which have to face a changing dynamic environment. They coined two terms,
‘mechanistic’ and ‘organic’ system of management.
A comparison of the characteristics of Mechanistic and Organic Organizations:
Points Of Difference Mechanistic Organic

Nature Of Environment Relatively stable, simple and Relatively dynamic, complex
predictable and uncertain
Task of Definition Tasks are segmented from Tasks are loosely defined in
each other and isolated from context of overall
the overall organizational organizational goal, need
goals; rigidly defined into redefinition through
specialties continuous interaction among
members
Communication Vertical, primarily to Lateral, primarily to share
communicate decisions and information and solve
give instructions problems
Authority Position based Expertise based
Control Mechanisms Hierarchical and impersonal Reciprocal; through
(through rules, procedures etc) interpersonal negotiations and
contracts
Decision-making Autocratic, programmed, Participative, non-
computational programmed, judgmental
Formalization High Low
Centralization High Low
Burns and Stalker’s classification describes a polarity and not a dichotomy. Their descriptions of
the mechanistic and organic structures corresponded to two “ideal” types. Most organizations
actually face environment which are either relatively stable or relatively changing and therefore
contain characteristics which are of both the types. It has also highlighted that the basic tenet of
managerial wisdom that there is no ideal organizational form to suit all environmental contexts.
B] Lawrence and Lorsch: Differentiation Integration Theory

Another significant study to demonstrate the relationship between environmental characteristics
and effective organizational structures was conducted by P.R Lawrence and J.W Lorsch(1967).
Lawrence an Lorsch sought to identify the influence of uncertainty in an organizational external
environment on its internal environment. They expected that successful and effective
organizations would be able to better match their internal environments with the demands of the
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external environment. The level of environmental uncertainty was assessed by looking into such
factors as how fast the environment is changing, how much information the management has
about the environment, how quickly an how frequently does the organization gets a feedback fro
the environment on its actions and so on.
To assess the internal organizational environment, Lawrence and Lorsch postulated two
dimensions, differentiation and integration.
They defined differentiation as both the degree of horizontal complexity, as well as the diversity
of attitude, perceptions and interpersonal orientations among the organizational members. Thus,
highly differentiated organizations will be characterized by more number of functional
departments, more jobs requiring specialized skills, high task segmentation and so on.
The other dimension, integration described the degree the manner in which different
organizational units and departments collaborate to achieve unity of efforts. A well integrated
organization would show a high degree of consistency and coordination in the efforts of various
units.
Lawrence and Lorsch found a striking relationship between the environmental uncertainty and
the way in which organizations manage their internal environment.
Their findings were:
a) The greater the environmental uncertainty, the greater is the differentiation within the
organization.
b) These differences in the interests and orientations of the organizational members and units
also create difficulties in achieving collaboration and consensus among them. This creates a need
for integration.
c) Organizations can have a variety of integrative mechanisms. Hierarchy, rules, and procedure
are the most basic means of achieving unity of efforts.
d) Lawrence and Lorsch also found that as the need for integration becomes more important for
an organization, more managerial manpower is required to look after integration function.
C] Duncan: A Model for “Right” Organizational Structure

In 1979, Robert Duncan published an article in Organization Dynamics, proposing a
comprehensive framework for understanding the design options one has for coping with different
types of environments. He viewed organizational structure as an informing-processing device,
which “links the elements of organization by providing the channels of communication through
which information flows.” Viewed in this manner, an effective organization structure would be
which is able to cope with the information-processing demands of in the environment.
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Four Task Environments and their Organizational Structures

(Based Robbins, 1987)
3. Moderately high 4. High Perceived Uncertainty
perceived uncertainty
D
Y Complexity : Low Complexity : Low
N Formalization : Low Formalization : Low
A Centralization Decentralization
M
C I E.g.: Small entrepreneurial E.g.: Advertising firms,
H C Firms. R&D units, Task Forces.
A
N
G 1. Low Perceived 2. Moderately low perceived
E uncertainty uncertainty
S
T
A Complexity Complexity
B Formalization Formalization
L Centralization Decentralization
E
E.g.: mass production E.g.: Multi product firms,
Manufacturing Hospitals
Companies, Bureaucracies
Simple Complex
Complexity
STRATEGIES FOR MANAGING ENVIRONMENT

There are numerous other strategies which the organizations use for certainty reduction. While
some of these do get translated into structural changes, many of these don’t. In fact,
organizations often evolve these strategies for managing their environment so as to avoid making
structural changes. Let us consider some of the most popular options:
Domain Choice:
Organizations can, and often do, change their domain of operations to change their operating
environment. In doing so, they also avoid facing the uncertainties inherent in the previous
domain. Many organizations move into markets where there is lesser competition, select
products/technologies for which raw material is easily available, or go into the areas which invite
less stringent government regulations, and so on. For example, Asian paints’ strategy, in its
initial years, to cater primarily to the rural segment of the market had the obvious advantage of
avoiding competition from the multinationals, which were the major players in the paint market
at that time.
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Recruiting:
Recruiting the kind of people is a popular and effective method employed by organization to
counter the environment uncertainty. Obviously, an organization which competent and skilled
persons manning its key positions would have an advantage in dealing with the environment. For
example the Essar Group, in its drive to professionalize itself, inducted for its key positions,
persons who had vast experience of managing core-sector projects.
Organizations, however, do not always recruit people only for their professional competence.
Hiring employees from the competitor’s organization, for example, has the additional benefits of
access to strategic information (which may, in fact, be more important than the hired person’s
competence.) Likewise, it is quite common to come across employment advertisements for
senior financial and administrative posts, inviting applications from people retired from
government service or financial institutions.
Vertical Integration:
This strategy refers to extending organizational control over the input and/or output ends of the
environment by incorporating them into organizational boundaries. If the company decides to
start manufacturing its own raw materials, instead of relying on the suppliers for the inputs, it is
known as backward integration. Likewise, if the organization decides to control the output end
it is known as forward integration.
Buffering:
Vertical integration requires high investments, and it may not always be possible for the
organization to use such a costly method for controlling environmental fluctuations. An
alternative is to create buffers at the input and output ends to take care of the variations in the
demand and supplies. Buffers protect the basic operating functions, e.g., production, from getting
affected by environmental changes. For example, organizations maintain high inventories or raw
material and spare parts, so that market fluctuations in their availability do not hamper with the
core manufacturing process.
Smoothening:
This is yet another strategy which helps the organization to level out the impact of environmental
fluctuations. The example of Business Today, given at the beginning of this chapter, is one such
instance of smoothening. By offering a heavy discount on the annual subscription over the
newsstand price, the magazine attracted a large number of annual subscribers, and thus,
smoothened the demand. Smoothening is often an effectively used to counter an environment
where fluctuations in demand are predictable, but extreme. That is, the organization has to deal
with overload at one time and under-utilization at another. By offering attractive incentives to the
customer, the organization manages to even out the load between extremes to manageable limits.
Advertising:
Advertising is an effective and popular way of copying with, and even influencing, the
environment. Effective advertising aim at luring the customers to buy the product/service and
thus, helps in creating brand loyalty, reducing competitive pressure, and thereby stabilizing
demand. For example, the success of Pan Parag (which increased its sales from a mere Rs. 43
lacs in 1984-85 to more than Rs. 70 crore in 1989-90), is largely attributed to its Rs. 2 crore
annual expenditure on advertising.
Contracting:
It is possible for the organization to control the organization to control key elements of the
environment by entering into a contract with them. Long-term fixed contracts, either for
purchase of supplies or for sale of outputs, protect the organizations from the vagaries of the
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environment. Similarly, many organizations, in the business of soaps, confectionaries, paper

napkins, etc. enter into long-term contracts with different hotels as suppliers.
Mergers/Acquisitions/Strategic Alliances:
These strategies, which can be generally termed as coalescing (Robbins, 1987), are becoming
more and more popular in our country, particularly so since the change in the government
policies have lessened the monopoly restrictions. Similarly, the strategic alliance between Godrej
Soaps Limited and Proctor & Gamble India Ltd in January 1993 was aimed at to give both
companies a competitive advantage.
Lobbying:
By attempting to get a favorable environment, (in terms of concessions, financial support, quick
clearances, etc.), organizations are able to exercise a certain amount of control of over the
environmental uncertainties. While individual companies are known to have varying amount of
political/government connections, a fair degree of lobbying effort is above-board and quite
normal. In many industrial sectors, organizations join together to form federations, consortiums
and associations as a means of influencing the environmental elements which they have to face
together.
STRATEGY
Strategy is an integrated functional plan in response to a problem perceived to be thrust upon the
company by the environment, or in response to initiation of the corporation to change the impact
of the company which the company wishes to have on the environment.
Strategy-Structure Link:
The strategic choice of an organization not only determines its response to the environment, but
also has a significant influence on the happenings within the organization.
According to Drucker structure is a means for attaining the objectives and goals of an institution.
Any work on structure must therefore start with objective and strategy.
In a study by chandler he found that as organization grows from single product company to
multiple company products company’s structure also changes in a consistent manner.
Small companys initially have low complexity and less formalization and as it grows large
companys have high complexity and high formalization.
Chandler concluded by telling strategy is a point towards the ends, then structure provides
the means to achieve those ends. There should be a synchronization between the means and
the ends.
Strategic Choices:
The organization behavior studies which have dealt with specific structural reforms carried out
by organizations to meet the environmental pressures.
The viewed successful strategy implementation as a process of establishing internal mechanisms
(roles, systems, structure, managerial process etc.) Thus strategic decision making process is
essentially an adaptive process aiming at maintaining an effective alignment with the
environment.
Miles and Snow identified three basic problems which the organization must identify,
confront and solve inorder to successfully adapt to the environment. These are:
a) Entrepreneurial problem(organization domain, product or services)
b) Engineering problem(selection of an appropriate technology)
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c) Administrative problem(rationalizing and stabilizing of the activity)
Miles and Snow described a framework for classifying organization according to their
strategic choices. They identified four essential strategic types of organization. They are:
a) Defenders:
They aim at achieving stability in their market environment. They end up creating a stable
domain by learning how to seal off a portion of the market. How to produce and distribute good.
How to achieve strict control of the organization
b) Prospector:
They function in a perceived operating environment which is dynamic and uncertain. They are
antithesis of the defender. They involveou in locating and exploiting new product. How to avoid
long-term commitment. How to facilitate rather than control.
c) Analyser:
While the defender and prospector represent the two ends of the strategic continuum, analyzers
fall somewhere in between representing a unique blend of two. They try to minimize the risks(a
defenders stance) while maximizing the opportunistic for profits( a prospectur characteristic).
They involve in locating and exploiting new product. How to be efficient in stable portion of the
domain. How to differentiate the organization structure and processes to accommodate both
stable and dynamic areas of operation.
d) Reactor:
A fourth strategic pattern, which inevitabaly contributes to organizational failure. It is when the
top management has not clearly articulated the organization strategy. The management has not
fully shaped the organization structure and process to fit the chosen strategy.
Conclusion:
It is not enough to think about the strategy implementation as only a matter of strategy and
structure. The wisdom is if you first get the strategy right, the right organization follows.
TECHNOLOGY
Technology refers to the manner in manner in which organizational input is transformed into
output. It deals with the information, equipment, techniques and processes required to achieve
this transformation. Whether the organization is a manufacturing firm, advertising agency,
hospital, bank or a trading house, it will use some sort of technology to transform its inputs
(skills, machines, material, or money) into viable products or services as its outputs. An
automobile company, for example, uses technology to convert the raw materials into vehicles,
just like a bank uses techniques and processes to convert money, ideas, human labour and skills
to provide banking services.
TECHNOLOGY AND STRUCTURE:

a) Effectiveness of an organization depends on the fit between technology and structure.
b) Technology are in general are of four types:
Routine, engineering, craft and non-routine.
c) More routine the technology, the more highly structured the organization should be.
d) Technological based organization design, need to go through, job level research to
formulate the functions and job design.
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e) Routine technology is positively associated with low complexity.

Nature of Technological Influences:
Thompson and Perrow provided a broad framework for understanding the nature of
technological influence.
A) Technological Complexity: (Woodward Study)
Joan Woodwards was a pioneering work on technological determinism of the structure. She
studied 100 marketing organizations in England. Her focus was to relate organization
structure(extent of formalization, span of control) with organization effectiveness. Initially she
didn’t find any big difference. But when she grouped these organizations according to their
production technologies the relationship between structure and effectiveness became apparent.
She found that organizations employing different production technologies required different
structures in order to be effective..
That is, organization effectiveness turned out to be function of technology-structure fit. She
classified technology in terms of levels of complexity. (Small unit, mass production and
continuous process technologies.)
B) Technological Interdependence: (Thompsons contribution)
Thompson viewed technology as fulfilling the function of linking theorganizational sub-units.
Based on his work, he suggested that different technologies are characterized by different
structural arrangements. Because it helps in determining appropriate strategies for uncertainty
reduction.
To fully understand his contribution it is necessary to acquaint with his concepts of
interdependence and co-ordination.
Interdependence refers to the manner in which the organizational sub-units are arranged, so that
they can effectively contribute to the organizational task.
Three types of interdependence are as follows:
a) Pooling: Here the coordination would be achieved by standardization
b) Sequential: Here the output of each happens to be the input of the other sub-unit. And the
coordination is achieved through proper planning.
c) Reciprocal: Here the output of the sub-units become inputs for each other. Generally in
complex organizations. And the coordination is achieved through mental adjustment.
Also he proposed three kinds of technologies, which were differentiated by the nature of
organization task and interdependence among its units.
a) Mediating Technology:
This technology links the input and output ends of the organization. Ex: Depositors----Bank------
------Borrower.
b) Long-linked technology:
This technology is characterized by a fixed sequence of repetitive steps. Ex: Mass production
assembly line. The tasks and operations in this technology are sequentially interdependent. Here
output becomes the input to other unit. Purchase-production-quality control-marketing
department.
c) Intensive Technology:
This technology is designed to meet the requirement of complex tasks, in which a variety of
problems can’t be predicted accurately beforehand, i.e, the problem arises during the process of
activities. Each of such problems requires a unique combination of knowledge, skills and
technique. Ex: major construction projects, R&D units, hospitals etc.
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C) Technological Uncertainity:
Perrow came out with a framework which described how technological uncertainity or lack of it
determined the organization structure. According to Perrow, two aspects of technology which
have a bearing on the organization structure are:
a) The task variability( the number of problem or exception encountered in performing the task).
b) The problem analyzability( the type of search for solution which is required when an excetion
does occur).
Managerial options for Technological change:

a) Combine tasks(skills variety and task variety)
b) For making natural work units( Task identity and task significance)
c) Establishing client relationship (Skills variety, autonomy, feedback fron job)
d) Expanding job vertically (Autonomy)
e) Opening feedback channels (feedback from the job)
ORGANIZATION POWER AND POLITICS

Significance of Power and Politics in Organizations
Power inequality and the political struggle and conflicts surfacing in organizations is very
common and at the same time inevitable.
The hierarchical and authority-based nature of the organization’s need to optimize, leading to
struggle for resources, etc. makes them ideal grounds for exercising legitimate and illegitimate
influences. The power relationships among the organizational members, further encourage them
to adapt political means for achieving personal and organizational goals.
Power, after all, refers to one’s ability to influence flows of available energy and resources
towards certain goals as opposed to other goals. In this sense, both political skills and power
serve similar functions. Both refer to the ability to influence, and both can be equally legitimate
or illegitimate goals.
The difference, probably, lies in the means of influence: exercising power would involve the use
of legitimate means (one’s position, expertise, reward and punishment, etc.), whatever are the
ends, while political skills refer to the use of legitimate means (withholding information,
integrating game-playing, etc.) to achieve ends, which may be quite legitimate.
Undoubtedly, politics in organizations has dysfunctional consequences; it wastes organizational
energies, is used to resist necessary changes (or to bring about those changes which are not
required), creates unnecessary stress, hampers with goal achievement, and so on. But it would be
equally unrealistic to ignore the positive contributions which power-politics makes to the
organization.
Mintzberg (1989) argued that politics has atleast four functional uses in organizations:
a) Politics ensures that the stronger members of the organization are brought into positions
of leadership (specially, since bureaucratic structures and autocratic superiors tend to
suppress strong subordinates.) It allows those with more initiative and competence to
prove their worth by getting ahead and to start taking organizational responsibilities
matching with their potential.
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b) In organizational decision making, tendency of those in authority is to present a one-sided

case on many issues. Politics ensures that all sides of the issue come to surface and can be
debated. Thus, politics can provide an alternative way to a more democratic functioning.
c) Most organizational changes are resisted by the established systems of authority (the
“vested interests”), for whom the change is threatening. Politics turns out to be necessary
for removing these blocks to the required changes.
d) Political skills of the skills of the executive are also necessary to make it easier arrive at
and implement decisions. Effective executives do need to rely much on their skills of
persuasion, negotiations, making trade-offs, building networks, etc., to achieve perfectly
legitimate organizational goals.
The structural determinants of organizational power are as follows:

a) Hierarchical Position:
The most common base of power is the position. This position gives him formal
authority to influence his sub-ordinates behavior by legitimately demanding
compliance and by sanctioning rewards and punishments for performance. The higher
the position the more power one is likely to exercise.
b) Non-Routineness:
If a job is of routine nature, it is more likely to be controlled through standardization
of work procedures. This would decrease the degree of freedom which the occupant
can exercise. A non-routine job, on the other hand allows the person performing the
job a higher degree of autonomy and flexibility. In a organization, if the nature of the
job is non-routine it justifies a variety of behaviors which the person can indulge in.
c) Centrality of Workflow:
Centrality refers to how critical the job is for the organization to achieve its strategic
goals. The jobs which are central to the organization, even the routine ones, are likely
to have more influence on organization decision making.
d) Control Over Inputs:
If a job, by virtue of its position in the structure, has control over resources, which are
required for others functioning, will have power over others, more so, if the resources
are scarce and critical to others.
e) Uniqueness:
In the organization, jobs which require specialized skills invariably carry greater
power. Actually almost all jobs require specialized competence and skills. However,
many of them can be substituted. Ex: car drivers and taxi operators( unless of course
they force the management to enter into an agreement).
f) Proximity of Power:
If the jobs allows one to be in the proximity of the place where crucial organizational
decisions are taken, it gives one greater opportunities to influence these decisions. Of
course, this influence is more often informal in nature than formal.
Power Imbalances/Sources of organizational conflicts:
Power imbalance stimulates when the less powerful put in efforts to enhance their power, leadin
to organizational conflicts. Like organizational power, organizational conflicts also have their
roots in organization structure.
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Walton and Dutton, identified a number of structural factors which contribute to

organizational / departmental conflicts. They are:
A) Horizontal Differentiation:
The differentiation that is caused when people are put in different groups and functions. They
never interact at times. They develop task based internal differences. These differences are
because of the degree of structure, the orientation among members towards the environment,
their planning and interpersonal orientation. Therefore, the integrating mechanisms in the
organization need to be taken care.
B) Interdependence among units:
It two units interact there are chances of conflicts if the interaction is not proper /healthy. This
interdependence can be in three ways.
a) Mutually dependent: The problem they experience is related to overlapping of issues such as
task overload, sharing of common resources, dealing with common clients.
b) Assymetrical dependence: When one unit is dependent on the other for assistance, co-
ordination, information, inputs etc. Since, the units are arranged in a sequential manner, incase of
failure they may blame each other.
c) Dependence on common resources:
Dependence on a common pool of organization resources such as physical space, equipment,
personal, operating or capital funds and services.
C) Performance and reward criteria:
Differences in performance and evaluation criteria also arise because of the variety of goal
characteristics among the sub-units. Some have more long-term goals(R&D and HRD), while
others have short-term targets( production, marketing) and certain goals can be measured(
machine down time etc) while others are immeasurable( industrial harmony) and some are based
on hard data( capacity utilization, inventory levels) while others rely on soft data (customer
satisfaction) and so on. So such different goals can’t be measured on a common criteria and it
paves for conflicts.
D) Incongruent Relationship:
Through the control and coordination mechanisms, organization aims at structuring and
regulating relationships among their members and sub-units. When they fail incongruency
occurs. The common sources of these congruencies are:
a) Certain roles and functions are ambiguous.
b) Certain definition of relationships are contradictory in nature.
c) More complex organizations, greater the chances of communication diistorions.
d) Many specialists groups.
FLAT STRUCTURE:
One factor that determines the number of hierarchical layers in the organization is the span of
control. Organizations with the same number of levels can have different number of levels, it
will result in tall organization, whereas if the span is wide, the organization will have a flat
structure. Flat organization structure have their own problems, such as more managerial
pressures on the executives, lesser promotional opportunities etc. The features of a flat
organization are stated below:
a) Flat Organizational Structure
b) (Wide span of control)
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c) More autonomy and self control is required.

d) Flexibility and innovation is required.
e) Ambiguous tasks and roles; specialization doesn’t work.
f) Non-routine technology.
g) Experienced subordinates.
h) Unstable, turbulent environment.
i) Lack of proper control; encourages laissez-faire.
j) Too much demand on the manager for coordinating.
k) Reduced promotional opportunities.
------------------------------------------*******************-------------------------------------
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MODULE 5
Foundations of Organizational Development: Conceptual frame work of OD, History of OD,
First order and second order Change, Values, assumptions and believes in OD, Characteristics of
OD, Participation and Empowerment, Teams and teamwork, Parallel learning structures,
A normative re-educative strategy of changing, Applied Behavioral science, Action research.
INTRODUCTION:
An organization is a system consisting of four interacting subsystems-structure, technology,
people and task.
Structure refers to the formal interactions within the organization as evidenced in the
organizational chart.
Task refers to the set of activities to be performed. In other words, the behavioral specification
associated with a job.
Technology relates to the level of sophistication determining the workflow and performance of
jobs in an organization. Higher technology, most often, means higher job knowledge and skills
of employees. Organizations may be classified as to their level of technology: high, medium, low
or obsolete. People variable refers to the human input in the organization i.e., individuals (in
terms of their physical and mental skills, personality etc.) working in the organization.
Organization as a system can be changed and developed to achieve its goals in the best possible
way. The goals of an organization generally are: survival, stability, profitability, growth and
service to society. From one organization to another, the goal or goals may differ depending
upon at what stage of development the organization is. Organization can achieve its goal if it is
able to respond to changes within the external and internal environment. The external
environment is in terms of forces in the social, political, economic and cultural factors.
Competition from similar organizations, changing needs of the public, knowledge explosion, and
rapid growth of technology .Organization has to take into cognizance its internal environment as
well, which includes existing structure, technology, needs and expectations of its people and the
changing scenario of labor force. All constitute threat to organizational effectiveness or
development.
DEFINITION OF OD:
Organization development (OD) is planned approach to respond effectively to changes in
its external and internal environment.
According to Koontz OD may be defined as a systematic, integrated and planned approach to
improve the effectiveness of the enterprise. It is designed to solve problems that adversely affect
the operational efficiency at all levels. It is based on scientific awareness of human behavior and
organization dynamics.
According to Richard, "Organization development is an effort which is, Planned, organization
wide, managed from the top, to increase organization effectiveness and health, through planned
interventions in the organization's processes using behavioral science knowledge."
Another way of understanding OD is to know what it is not:

'OD is not a micro approach to change: Management development. For ex: It is aimed at
changing individual behavior. Whereas OD is used on the macro goal of developing an
organization-wide improvement.
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OD is more than any single technique: Whereas OD consultants use many differing
techniques. Such as total quality management or job enrichment. No single technique represents
the OD discipline.
OD does not include random or ad hoc changes: OD is based "on a incremental appraisal and
diagnosis of problems leading to specific types of change, efforts.
OD is aimed at more than raising morale or attitude: OD is aimed at Overall organizational
effectiveness. This may include participant satisfaction an aspect of the change effort but
includes other effectiveness parameters.
These definitions clarify the distinctive features of OD and suggest why it is such a powerful
change strategy. The participative, collaborative, problem-focused nature of OD marshals the
experience and expertise of organization members as they work on their most important
problems and opportunity in ways designed to lead to successful outcomes.
Organization Development is an effort which is planned, organization-wide, and managed from
the top, to increase organization effectiveness and health through planned interventions in the
organization's processes,' using behavioral-science knowledge.
Organization Development is a body of knowledge and practice that enhances organizational
performance and individual development, viewing the organization as a complex system of
systems that exist within a larger system, each of which has its own attributes and degrees of
alignment.
Organization Development is an organizational Process for understanding and improving any
and all substantive process an organization may develop for performing any task and pursuing
any objectives
Organization development is a set of behavioral Science based theories, values, strategies and
techniques aimed at the planned change of organizational work setting for the purpose of
enhancing individual development and improving organizational performance, through
organizational structure, process, strategy, people and culture.
Essentially there are two schools of thought in OD:
a) Programmed –Procedure School
b) System –Process School
The Programmed –Procedure school: It is an older approach. According to it, OD is the
effective implementation of the organization’s policies, procedures and programmers. It is
concerned with personnel activities that contribute to the overall growth and development of the
organization, such as-recruitment, training, career development, Compensation, welfare and
benefits, labor relations etc. Personnel development is primarily concerned with OD activities.
At present, it is being widely recognized that personnel functions contribute only partly to OD.
They at best serve the organizational control or maintenance function.
The system process school: This school considers organization development in the context of
both its internal and external environment. Components of this approach view organization as a
system, which can be changed and developed to best, achieve its goals and objectives. Insights
drawn from recent developments in behavioral sciences have contributed to the system-process
school. An emerging role for OD is system based and focuses on total organization effectiveness
and hence goes beyond the traditional personnel programmers. The emphasis is much more on
work groups within and across departments rather than individuals as such. While personnel
programmers demand conformity for prescribed policies and procedures, the system process
school encourages openness, and collaborative ways of solving problems so that the outcomes
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are advantageous to both the individual and the organization. It is likely that the objectives of
both the schools are contradictory to certain extent.
Programmed Procedure School System Process School
Internal Internal & External
Personnel – oriented Department – oriented
Individual Group
Sectional Holistic
Prescriptive Open
System internal Interdisciplinary
OVERVIEW OF THE FIELD OF ORGANISATION DEVELOPMENT

Organization development is an organizational improvement strategy. In the late 1950s and early
1960s, it emerged out of insights from group dynamics and from the theory and practice of
planned change. Today the field offers an integrated framework capable of solving most of the
important problems confronting the human side of organization.
Organization development is about how people and organization function and how to get them to
function better. The field is based on knowledge from behavior science disciplines such as
psychology, social psychology, sociology, anthropology, systems theory, organizational
behavior, organization theory, and management. OD practitioners are consultants trained in the
theory and practice of organization development, with knowledge from the underlying
behavioral sciences.
OD programs are long-term, planned, sustained efforts. Such efforts begin when a leader who
identifies an undesirable situation and seeks to change it.
OD deals with the gamut of “peoples problem” and “work systems problems” in organizations, it
may be poor morale, low productivity, poor quality, interpersonal conflict, intergroup conflict,
unclear or inappropriate goals, inappropriate leadership styles, poor team performance,
inappropriate organization structure, poorly designed tasks, inadequate response to
environmental demands, poor customer relations, inadequate alignment among the organisation’s
strategy, structure, culture, and processes, and the like. In short, where individuals, team, and
organizations are not realizing their potential, OD can improve the situation.
OBJECTIVES OF OD
The objectives of OD may be stated as follows:
a) To improve organizational performance as measured by profitability, market share,
innovativeness etc.
b) Better adaptability of the organization to its environment.
c) Willingness of the members to face organizational problems and contribute creative
solutions to these problems
d) To improvement in internal behavior patterns such as interpersonal relations, inter-group
relations, level of trust and support among role members, understanding one’s own self
and others, openness and meaningful communication and involvement in planning for
organizational development.
CHARACTERISTIC /FEATURES OF OD
Some of the basic characteristics of OD programs:
Planned Change: It is a planned strategy to bring about organizational Change. This change
effort aims at specific objectives and is based on the diagnosis of problem areas.
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Collaborative in nature: OD typically involves a collaborative approach to change, which

includes the involvement and participation of those organization members most affected by the
changes.
Performance oriented: OD programs include an emphasis on ways to improve and enhance
performance and quality (TQM).
Humanistic in nature : OD relies on a set of humanistic values about people and organizations
that aims at gaining more effective organizations by opening up new opportunities for increased
use of human potential systems. OD represents a systems approach concerned with the
interrelationship of various divisions, departments, groups and individuals and interdependent
subsystems of the total organization.
Focal Area: The main focus of interest is the organization at large and not individuals. An OD
practitioner (either manager or consultant) is a person in an organization responsible for
changing existing patterns to obtain more effective organizational performance. Organization
development practitioners have come to realize that conventional training techniques are no
longer sufficient for affecting the type of behavioral changes needed to create adaptive
organizations. New techniques have been developed to provide participants with the competence
and motivation to alter ineffective patterns of behavior. There are many OD techniques, and any
individual practitioner may rely on one or a combination of approaches. Regardless of the
method selected, the objectives are to work from an overall organization perspective, through
increasing the ability of the "whole" to respond to a changing environment. Organizations have
objectives such as making profit, surviving, and growing, but individual members also have
desires to achieve, unsatisfied needs to fulfill career goals to accomplish within the organization.
OD then, is a "process for Change, which can benefit both the organization and the individual. In
today's business environment managers must continuously monitor change and adapt their
systems to survive by staying competitive in a turbulent arena.
THE EMERGENCE OF OD
Organization development is one of the primary means of creating more adaptive
organizations. Warren Bennis, a leading OD practitioner has suggested three factors
underlying the emergence of OD.
a) The need of new organizational forms: Organizations tend to adopt a form that is more
appropriate to a particular time, and the current rate of change requires more adaptive forms.
b) The focus on cultural change: Because each organization forms a culture-a system of beliefs
and values the only way to change is to alter this organizational culture.
c) The increase in social awareness: Because of the changing social climate, tomorrow's
employee will no longer accept autocratic styles of management, therefore, greater social
awareness is required in the organization. Today’s managers exist in shifting organizational
structures and can be the central force in initiating change and establishing the means for
adoption. Most organizations strive to be creative, efficient, and highly competitive, maintaining
a leading edge in their respective fields rather than following trends set by others. Effective
managers are vital to the continuing self-renewal and ultimate survival of the organization. The
Consultant manager must recognize when changes are occurring in the external environment and
possess the necessary competence to bring about change when it is needed. The manager must
also be aware of the internal system and recognize that the major element in planned change is
the organizational culture: the feelings, norms, and behaviors of its members.
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The roots of OD lie in the famous Hawthorne experiments carried out at the Western
Electric Company by Elton Mayon and his associates:
These experiments highlighted the importance of employee attitudes and expectations, informal
work groups, norms and values and participation in decision making influences employee
performance .Though there are divergent opinions and attitudes about the nature and practice of
OD, among its practitioners, a general consensus may be noticed among them as to what the
basic characteristics of OD are. In any OD effort the totality of the organization is to be taken
into account. Organization being an integrated system of sub-systems, changes in anyone sub-
system tends to have consequences for the other sub-systems. The approach should be holistic
either for identifying the need for change within or for planning and implementing a change, and
until the intended change is absorbed in the total system, optimal collaboration, synergism or
efficiency cannot be obtained. The theoretical body of knowledge underlying the concept and
practice of OD is eclectic. Recent developments in the area of behavioral sciences, especially
psychology, sociology, anthropology etc., have influenced the OD thought and practice.
THE EVOLUTION OF OD:

Organization development has evolved over the past 40 years from the application of behavioral
science knowledge and techniques to solving organizational problems. What has become OD
stand in the late 1940s at MIT and is deeply rooted in the pioneering work of applied social
scientists such as Kurt Lewin, and also strongly influenced by the work of psychologists such as
Carl Rogers and Abraham Maslow. The term organization Development is widely attributed to
Robert Blake and Jane Mouton (the originators of the Managerial Grid) Herren Shepard (a
leading OD pioneer), however, Richard Beckhard (an OD consultant) claims this distinction as
well. Regardless of who first coined the term, it emerged about 1957 and is generally conceded
to have evolved from two basic sources, they being-the application of laboratory methods by
National Training Laboratories (NTL) and the survey research methods ignited by the Survey
Research Center. Both methods were pioneered by Kurt Lewin in about 1945.Laboratory
Training methods -In the late 1940s and early 1950s laboratory training methods were developed
and applied by a group of behavioral scientists at Bethel, Maine. Douglas McGregor (Theory X
and Theory Y), began applying laboratory training methods to industry, at General Ills in 1956
and at Union Carbide in 1957. At union Carbide, McGregor and John Paul (an internal
consultant) formed the First internal OD consulting group, and about the same time Herbert
Shepard and Robert Blake were initiating a series of applied behavioral Science interventions at
Esso, using mainly laboratory-training technique to improve work team processes. These early
railing sessions provided the basis for what Blake and Mouton later developed as an
instrumented training system they called the Managerial Grid. The success of these programs led
to a dissemination of such efforts to various corporations.
THE EXTENT OF OD APPLICATIONS
From these early beginnings OD has experienced a rapid growth. A growing number of
organizations worldwide uses OD techniques. Most major corporations have formed internal OD
consulting groups. The OD network, an organization of OD practitioners, has been in existence
for only a little over two decades and has grown to a membership of more than 2,000 members.
The first doctoral program for training OD specialists, called the Organizational Behavior Group,
was started by Shepard in 1960 at what is now the Department of Organization and
Administration at Case Western Reserve University. Organization development is an exciting
and a rapidly growing field. OD efforts have grown into a multitude of differing approaches and
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are now applied in a number of organizations around the world by expanding number OD
practitioners.
Therefore, Organization Development is the attempt to influence the members of an organization
to expand their candidness with each other about their views of the organization and their
experience in it, and to take greater responsibility for their own actions as organization members.
The assumption behind OD is that when people pursue both of these objectives simultaneously,
they are likely to discover new ways of working together that they experience as more effective
for achieving their own and their shared (organizational) goals. And that when this does not
happen, such activity helps them to understand why and to make meaningful choices about what
to do in light of this understanding." Organization Development is about planning and managing
change at the individual, group and organizational levels to enable organizations to become more
effective and humane.
CHANGE:
Change is to cause transformation. Change is to alter or modify existing things to the
needful state. The moving from an existing state to the desired state is change.
It Seeks to change attitudes, values, and management practices in an effort to improve
organizational performance.
Ultimate goal of OD is to structure the organizational environment such that managers and
employees can use their skills and abilities to the fullest.
Purpose: effectiveness
Target: organization
Basis: behavioral science knowledge
Process: planned change
Technique: variety of interventions
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The BURKE-Litwin Model of Organisational change

BURKE-Litwin Model of individual and organisational performance, developed by Warner
Burke and George Litwin. This model shows how to create first-order and second- order change
(which the author calls “transactional change” and “transformational change”) .
In first-order change, some features of the organizations change and goes by many different
labels: transactional, evolutionary, adaptive, incremental, or continuous change.
In second-order change, the nature of the organization is fundamentally and substantially altered.
And second-order change goes by many different labels: transformational revolutionary, radical,
or discontinuous change. OD programs are directed towards both first and second –order change,
with an increasing emphasis on second-order transformational change.
The Transactional Factors Involved in First- order Change
Management
Practices
Systems
Structure (Policies &
procedures)
Work unit
climate
Motivation
Task Requirements Individual
and Individual Needs &
Skills/Abilities values
Individual &
organisational
performance
The Transformational Factors Involved in Second-Order Change

External
Environment
Leadership
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Mission & strategy Organisational

culture
Individual and organisational

Performance
On the other hand, if we want to cause second –order (transformational) change, we must change
mission and strategy, leadership styles, and organization culture, as shown in the figure.
Interventions directed toward these factors transform the organization and cause a permanent
change in organization culture, which produces changes in individual and organisational
performance
VALUES, ASSUMPTIONS AND BELIEFS IN OD:

Values: Values are standards or ideas which most people have about the worth of good qualities,
such as kindness, freedom, mercy, respect and love.
Assumptions: Assumptions are supposing a thing without proof.
Beliefs: Beliefs are habits of placing trust or confidence. A belief is a proposition about how the
world works that the individual accepts as true it is cognitive fact for the person.
A set of values, assumptions, and beliefs constitute an integral part of organization development.
Most of these beliefs were formulated early in the development of the fields, and they continue
to evolve as the field itself evolves.
Values are also beliefs and are defined as “Beliefs about what is desirable and considered as
‘good’ (eg, freedom of speech) and what is an undesirable and considered as ‘bad’ (eg.,
dishonesty).” Assumptions are beliefs that are regarded as a valuable and obviously correct that
are taken for granted and are rarely examined or questioned.
OD values tend to be humanistic, optimistic, and democratic.
Humanistic values proclaim the importance of the individuals respect the whole person, treat
people with respect and dignity, assume that everyone has intrinsic worth, views all people as
having the potential for growth and development.
Optimistic values posit that people are basically good, that progress is possible and desirable in
human affairs, and that rationality, reason, and goodwill are the tools for making progress.
Democratic values assert the sanctity of the individual, the right of people to be free from
arbitrary misuse of power, the importance of fair and equitable treatment for all, and the need for
justice through the rule of law and due process.
The basic value underlying all organization development theory and practice is that of choice.
Through focused attention and through the collection and feedback of relevant data to relevant
people, more choices become available and hence better decisions are made.
Implications of OD Values and Assumptions:

Implications for dealing with Individuals:
a) The first assumption is that most individuals have drives toward personal growth and
development if provided an environment that is both supportive and challenging. Most
people want to develop their potential.
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b) The second assumption is that most people desire to make, and are capable of making a
greater contribution to attaining organization goals than most organizational
environments permits
c) A tremendous amount of constructive energy can be tapped if organizations realize and
act on these assumptions.
Implications for dealing with Groups:
a) What happens in the work group at both formal and informal levels, greatly influences
feelings of satisfaction and competence.
b) Most people wish to be accepted and to interact cooperatively with at least one small
reference group, the family, club and so on.
c) Most people are capable of making greater contributions to a groups effectiveness and
development.
d) The formal leader cannot perform all the leadership and maintenance functions required
for a group to optimize its effectiveness.
e) Many attitudinal and motivational problems in an organizations require interactive and
transactional solutions.
TEAMS AND TEAM WORK

A fundamental belief in organization development is that work teams are the building blocks of
organizations. A second fundamental belief is that team must manage their culture, processes,
and systems and relationships if they are to be effective.
Teams and teamwork are part of the foundation of organization development.
Teams and teamwork are among the “hottest” things happening in organizations today—gurus
extol the virtues of teams, the noun team has become a verb, teaming and team related acronyms
abound-SDTs(self directed teams),QCs (quality circles), HPOs (high performance
organizations), HPWS (high performance work system),STS (socio-technical systems),to name
just a few. Teams at Motorola produced its best selling cellular phones; Teams Taurus developed
Ford’s best selling automobile. Team Saturn produced the Saturn automobiles, Team at 3M
generated the hundreds of innovations that keep 3M ahead of its competitors. Cross functional
“design-built” teams developed the Boeing 777. Teams and teamwork are evidence and is
abundantly clear that effective teams produce results far beyond the performance of unrelated
individuals.
Teams are important for number of reasons:
First, most individual behavior is rooted in the socio-cultural norms and values of the work
team. If the team, as a team, changes those norms and values, the effect on individual behavior is
immediate and lasting.
Second, many task are so complex they cannot be performed by individuals, people must work
together to accomplish them.
Third, teams create synergy. That is the sum of the effort of team members is far greater than the
sum of the individual efforts of people working alone. Synergy is a principal reason teams are so
important.
Fourth, teams satisfy people’s needs for social interaction, status, recognition, and respect –
teams nurture human nature. In this section, we examine the potential of teams and team work,
and explore ways to realize that potential.
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Team building activities are now a way of life for many organizations. Team periodically hold
team-building meetings, people are trained in group dynamics and group problem solving skills
and individuals are trained as group leaders and group facilitators.
Organization using autonomous work groups or self-directed teams devotes considerable time
and effort to ensure that team members possess the skills to be effective in groups. The net effect
is that they achieve synergy and that teamwork becomes more satisfying for team members.
Why some teams are successful while others are not. Laresen and Fasto studied a number of high
performance teams that are successful, including heart transplant surgical teams, the crew of the
USS Kitty Hawk and others determine the characteristics that make them successful.
The eight characteristics:
A clear elevating goal, a result driven structure, competent team member, unified commitment, a
collaborative climate, standard of excellence, external support and recognition and principled
leadership.
All these are required for superior team performance.
PARALLEL LEARNING STRUCTURES

Dale Zand introduced the concept in 1974 under the label collateral. Organization defined it as a
supplemental organization co-existing with the usual form of organization.
The purpose of collateral organization is to deal with ill-structured problems which the formal
organization is unable to resolve.
Parallel learning structure is specially created organisational structure for planning and guiding
change programs. Parallel learning structures are mechanism to facilitate innovation in large
bureaucratic organizations where forces of inertia, hierarchical communication patterns, and
standard way of addressing problems inhibit learning, innovation and change. In essence, parallel
structures are a vehicle for learning how to change the system, and then leading the change
process.
In its most basic form, a parallel learning structures consists of a steering committee and a
number of working groups that study what changes are needed, make recommendations for
improvement, and monitor the change efforts. It should have representations from all parts of the
organization. Additional refinements include work groups, action groups, idea groups or
implementation groups.
The charge to members of the parallel learning structure is to think and behave in ways that are
different from the normal roles and rules of the organization. The key thing about parallel
structures is that they create a bounded space and time for thinking, talking, deciding and acting
differently than normally takes place at work.
The most important and difficult task for the public creating the parallel learning structure is to
create a different culture within it. It is not the supplemental structure that is important, what is
more important is that which promotes learning and adaptation.
High performance organization often use parallel learning structure to co-ordinate self-directed
teams. At Ford Motors Co, a steering committee and working groups were used to co-ordinate
the employee involvement teams. Parallel learning structure are often the best way to initiate
change in large bureaucratic organization especially when the change involves a fundamental
shift in the organization methods of work and a culture.
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A NORMATIVE-REEDUCATIVE STRATERGY OF CHANGING

OD involves change, and it rests on a particular strategy for change that has implications for
practitioners and organization members alike. Chin and Benne describe three types of strategies
for changing.
The first type is empirical rational strategies, based on the assumptions that people are rational,
will follow their rational self interested, and will change if and when they come to realize change
is advantageous to them.
The second group of strategies in normative-reeductative strategies, based on the assumptions
that norms form the basis for behavior, and change come through reduction in which old norms
are discarded and supplemented by new ones.
The third set of strategies is the power-coercive strategies, based on the assumptions that change
is compliance of those who have less power with the desires of those who have more power.
Evaluated against these three change strategies, OD clearly falls within the normative-reductive
category, although often OD represents a combination of the normative-reeducative and
empirical-rational strategies.
A second group of strategies we call normative-reductive. These strategies build upon

assumptions about human motivation are different from those underlying the first. The
rationality and intelligence of men are not denied. Patterns of action and practice are supported
by socio-cultural norms and by commitments on the part of individual’s to these norms. Socio-
cultural norms are supported by the attitude and value systems of individuals to these norms.
Socio-cultural norms are supported by the attitude and value systems of individuals –normative
outlooks which undergird their commitments. Change is a pattern of practice or action, according
to this view, will occur only as the persons involved are brought to change their normative
orientations to old patterns and develop commitments to new ones. And change in normative
orientations involve change in attitudes, values, skills.
On the other hand, if you believed in normative-reductive strategy of changing you would do
additional things. While you do not disregard peoples intelligence, rationality, and self-interest.
You also believe that many behaviors are rooted in socio-cultural norms, values, and beliefs that
must be changed if people are to accept and use the vaccine. Some of these beliefs might be that
“all new drugs are dangerous until they have been on the market for ten years”.
APPLIED BEHAVIOURAL SCIENCE

This foundation of OD relates to the primary knowledge base of the field, behavioral science
knowledge. OD is applicable of behavioral science knowledge, practices, and skills in ongoing
systems in collaboration with system members. Although human behavior in organizations is far
from an exact science, law full patterns of event produce effectiveness and ineffectiveness. OD
practitioners know about these patterns through research and theory. Then how behavioral
science knowledge becomes applied behavioral science knowledge?
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Compoosition Of Applied
A Behaavioral Scieence
Screenned against the

t criteria of o
Practtice what isi applicablee to this situaation? Practice
Reseaarch Theory
i.e whhat helps me solve this P
Problem
probleem.
Appplied
Behavioral
Scieence
Behavvioral Behavioral
scien
nce Screeened againstt the criteria of science
Reseaarch
whatt
works? what fits? Whaat is Theory
relevvant? What helps
h me solvve the
problem?
OD is booth a result of applied behhavioral scieence and a foorm of appliied behavioral science,
perhaps more
m accurattely it is a prrogram of appplying behaavioral sciennce to organiization,
The two bottom inpu uts behavioraal science theeory and behhavioral scieence researchh represent
contributtions from puure science or o basic scieence. The two top inputs practice research and
practice theory
t represent contribuutions from applied science.
Contribu
utions of Beehavioral Sccience Theory:
a) The
T importan nce of social norms.
b) The
T importan nce of the existing total field
f of forcees.
c) The
T relevancee of role theoory in accouunting for staability and chhange.
d) The
T importan nce of individdual goal settting for incrreasing prodductivity andd performancce.
e) The
T effects off reward andd punishmennt.
Contribu
utions of Beehavioral Sccience Reseaarch:
a) Itt studies the causes /condditions and consequence
c es of inducedd competition on behavioor
w
within groupss and betweeen groups
b) Results
R on thee effects of cooperative
c and competiitive group goal
g structures on behaviior
w
within groupss
c) Studies on thee variables relevant
r for organization
o n health
d) Studies on thee effect of orrganization and
a managerrial climate on leadershiip style
e) Studies on diffferent comm munication networks,
n caauses and connsequences of o conformitty
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PARTICIPATION AND EMPOWERMENT:

One of the most important foundations of OD is participation and Empowerment. Participation in
OD programs is not restricted to elites or the top people, it is extended broadly throughout the
organization. Increased participation and Empowerment have always been the central goals and
fundamental values of the fields.
To Empower is to give someone power, which is done by giving individuals the authority to
make decisions, to contribute their ideas, to exert influence and to be responsible. Participation is
especially an effective form of empowerment. Participation enhances empowerment and
empowerment in turn enhances performance and individual well-being.
According to Robert Quinn and Gretcher Spreitzer they had 2 different views of empowerment.
Mechanistic View: Is a top-down delegation of decision making with clear boundaries and strict
accountability that increases managerial control.
Organic View: Is bottom-up and less controlling. Organic view is about risk-taking, growth and
change. Empowerment means trusting people and tolerating their imperfections.
These authors believe that organic view, with the emphasis on risk-taking, personal initiative and
growth is more useful perspective. Both views contain valid ideas. The organic approach
unleashes talent and energy in people that are best channeled by providing clear guidelines and
boundaries.
Empowerment is not something that management does to employees, but rather a mind-set that
employees have about their roles in the organization. Employees must choose to be empowered.
They must see themselves as having freedom and discretion, they must feel personally connected
to the organization, confident about their abilities and capable of having an impact on system in
which they are embedded. Empowerment is an important ingredient in high performance
organization.
ACTION RESEARCH:
Action research" is a term for describing a spectrum of activities that focus on research,
planning, theorizing, learning, and development. It describes a continuous process of research
and learning in the researcher's long-term relationship with a problem.
An action researcher is a person with a scientific attitude, an understanding of qualitative

research principles, an understanding of the dynamics of change, and a commitment to studying
problems that are relevant in real settings. This process is as much an act of scientific research as
an act of engagement with people experiencing the problem.
Action Research is a process which serves as a model for most OD interventions.

French and Bell describe Action Research as a "process of systematically collecting research
data about an ongoing system relative to some objective, goal, or need of that system, feeding
these data back into the system, taking actions by altering selected variables within the system
based both on the data and on hypotheses, and evaluating the results of actions by collecting
more data."
Action research is known by many other names, including participatory research, collaborative
inquiry, emancipatory research, action learning, and contextual action research, but all are
variations on a theme. Put simply, action research is “learning by doing” - a group of people
identify a problem, doing something to resolve it, see how successful their efforts were, and if
not satisfied, try again.
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Action research aims to contribute both to the practical concerns of people in an immediate
problematic situation and to further the goals of social science simultaneously. Thus, there is a
dual commitment in action research to study a system and concurrently to collaborate with
members of the system in changing it in what is together regarded as a desirable direction.
Accomplishing this twin goal requires the active collaboration of researcher and client, and thus
it stresses the importance of co-learning as a primary aspect of the research process.
Evolution of Action Research:
Origins in late 1940s Kurt Lewin is generally considered the ‘father’ of action research. A
German social and experimental psychologist, and one of the founders of the Gestalt school, he
was concerned with social problems, and focused on participative group processes for addressing
conflict, crises, and change, generally within organizations. Initially, he was associated with the
Center for Group Dynamics at MIT in Boston, but soon went on to establish his own National
Training Laboratories.
Lewin first coined the term ‘action research’ in his 1946 paper “Action Research and Minority
Problems”, characterizing Action Research as “a comparative research on the conditions and
effects of various forms of social action and research leading to social action”, using a process
of “a spiral of steps, each of which is composed of a circle of planning, action, and fact-finding
about the result of the action”.
Eric Trist, another major contributor to the field from that immediate post-war era, was a social
psychiatrist whose group at the Tavistock Institute of Human Relations in London engaged in
applied social research, initially for the civil repatriation of German prisoners of war. He and his
colleagues tended to focus more on large-scale, multi-organizational problems.
Both Lewin and Trist applied their research to systemic change in and between organizations.
They emphasized direct professional-client collaboration and affirmed the role of group relations
as basis for problem-solving. Both were avid proponents of the principle that decisions are best
implemented by those who help make them.
The Action Research Process
Stephen Kemmis has developed a simple model of the cyclical nature of the typical action
research process. Each cycle has four steps: plan, act, observe, and reflect.
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Gerald Susman (1983) gives a somewhat more elaborate listing. He distinguishes five phases
to be conducted within each research cycle. Initially, a problem is identified and data is collected
for a more detailed diagnosis. This is followed by a collective postulation of several possible
solutions, from which a single plan of action emerges and is implemented. Data on the results of
the intervention are collected and analyzed, and the findings are interpreted in light of how
successful the action has been. At this point, the problem is re-assessed and the process begins
another cycle. This process continues until the problem is resolved.
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Action Research
R Mo odel
The step
ps in Action Research are: a
a) Entry:
E This phase conssists of maarketing, i.e. finding needs for chhange withiin an
orrganization. It is also thhe time to quuickly graspp the nature of the organnization, ideentify
thhe appropriaate decision maker,
m and build
b a trusting relationshhip.
b) Start-up
S andd contractingg: In this sttep, we idenntify critical success facctors and thee real
isssues and lin nk into the organizationn's culture anda processes, and clarrify roles foor the
coonsultant(s) and employyees. This is i also the time
t to deaal with resisstance withinn the
orrganization. A formal orr informal coontract will define
d the chhange processs.
c) Assessment
A and
a diagnossis: Here wee collect datta in order to t find the opportunities
o s and
prroblems in the
t organizattion. This is also the timme for the connsultant to make
m a diagnnosis,
inn order to reccommend apppropriate innterventions.
d) Feedback:
F Everyone
E whho contributeed informatiion should haveh an oppportunity to learn
abbout the finndings of thee assessmennt process (pprovided theere is no appparent breacch of
annyone's confidentiality.)) This proviides an oppoortunity for the organizzation's peopple to
become invo olved in thee change prrocess, to learn about how differrent parts of the
orrganization affect eachh other, annd to particcipate in seelecting apppropriate chhange
innterventions.
e) Action
A plannning: In thiss step we wiill distill reccommendatioons from thee assessmennt and
feeedback, con o intervention(s) on acctivities that have
nsider alternative actionss and focus our
thhe most leveerage to effeect positive change
c in thhe organizatiion. An impplementationn plan
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will be developed that is based on the assessment data, is logically organized, results-
oriented, measurable and rewarded. We must plan for a participative decision-making
process for the intervention.
f) Intervention: Now, and only now, do we actually carry out the change process. It is
important to follow the action plan, yet remain flexible enough to modify the process as
the organization changes and as new information emerges.
g) Evaluation: Successful OD must have made meaningful changes in the performance and
efficiency of the people and their organization. We need to have an evaluation procedure
to verify this success, identify needs for new or continuing OD activities, and improve the
OD process itself to help make future interventions more successful.
h) Adoption: After steps have been made to change the organization and plans have been
formulated, we follow-up by implementing processes to ensure that this remains an
ongoing activity within the organization, that commitments for action have been
obtained, and that they will be carried out.
i) Separation: We must recognize when it is more productive for the client and consultant
to undertake other activities, and when continued consultation is counterproductive. We
also should plan for future contacts, to monitor the success of this change and possibly to
plan for future change activities.
Principles of Action Research

What gives action research its unique flavor is the set of principles that guide the research.
Winter (1989) provides a comprehensive overview of six key principles.
1) Reflexive critique
An account of a situation, such as notes, transcripts or official documents, will make implicit
claims to be authoritative, i.e., it implies that it is factual and true. Truth in a social setting,
however, is relative to the teller. The principle of reflective critique ensures people reflect on
issues and processes and make explicit the interpretations, biases, assumptions and concerns
upon which judgments are made. In this way, practical accounts can give rise to theoretical
considerations.
2) Dialectical critique
In Reality, particularly social reality, is consensually validated, which is to say it is shared
through language. Phenomena are conceptualized in dialogue, therefore a dialectical critique is
required to understand the set of relationships both between the phenomenon and its context, and
between the elements constituting the phenomenon. The key elements to focus attention on are
those constituent elements that are unstable, or in opposition to one another. These are the ones
that are most likely to create changes.
3) Collaborative Resource
Participants in an action research project are co-researchers. The principle of collaborative
resource presupposes that each person’s ideas are equally significant as potential resources for
creating interpretive categories of analysis, negotiated among the participants. It strives to avoid
the skewing of credibility stemming from the prior status of an idea-holder. It especially makes
possible the insights gleaned from noting the contradictions both between many viewpoints and
within a single viewpoint
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4) Risk
The change process potentially threatens all previously established ways of doing things, thus
creating psychic fears among the practitioners. One of the more prominent fears comes from the
risk to ego stemming from open discussion of one’s interpretations, ideas, and judgments.
Initiators of action research will use this principle to allay others’ fears and invite participation
by pointing out that they, too, will be subject to the same process, and that whatever the
outcome, learning will take place.
5) Plural Structure
The nature of the research embodies a multiplicity of views, commentaries and critiques, leading
to multiple possible actions and interpretations. This plural structure of inquiry requires a plural
text for reporting. This means that there will be many accounts made explicit, with
commentaries on their contradictions, and a range of options for action presented. A report,
therefore, acts as a support for ongoing discussion among collaborators, rather than a final
conclusion of fact.
6) Theory, Practice, Transformation
For action researchers, theory informs practice, practice refines theory, in a continuous
transformation. In any setting, people’s actions are based on implicitly held assumptions,
theories and hypotheses, and with every observed result, theoretical knowledge is enhanced. The
two are intertwined aspects of a single change process. It is up to the researchers to make
explicit the theoretical justifications for the actions, and to question the bases of those
justifications. The ensuing practical applications that follow are subjected to further analysis, in
a transformative cycle that continuously alternates emphasis between theory and practice.
Uses of Action Research

Action research is used in real situations, rather than in contrived, experimental studies, since its
primary focus is on solving real problems. It can, however, be used by social scientists for
preliminary or pilot research, especially when the situation is too ambiguous to frame a precise
research question. Mostly, though, in accordance with its principles, it is chosen when
circumstances require flexibility, the involvement of the people in the research, or change must
take place quickly or holistically.
It is often the case that those who apply this approach are practitioners who wish to improve
understanding of their practice, social change activists trying to mount an action campaign, or,
more likely, academics who have been invited into an organization (or other domain) by
decision-makers aware of a problem requiring action research, but lacking the requisite
methodological knowledge to deal with it.
Types of Action Research

By the mid-1970s, the field had evolved, revealing 4 main ‘streams’ that had emerged:
traditional, contextual (action learning), radical, and educational action research.
a) Traditional Action Research

Traditional Action Research stemmed from Lewin’s work within organizations and encompasses
the concepts and practices of Field Theory, Group Dynamics, T-Groups, and the Clinical Model.
The growing importance of labor-management relations led to the application of action research
in the areas of Organization Development, Quality of Working Life (QWL), Socio-technical
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systems (e.g., Information Systems), and Organizational Democracy. This traditional approach
tends toward the conservative, generally maintaining the status quo with regards to
organizational power structures.
b) Contextual Action Research (Action Learning)
Contextual Action Research, also sometimes referred to as Action Learning, is an approach
derived from Trist’s work on relations between organizations. It is contextual, insofar as it
entails reconstituting the structural relations among actors in a social environment; domain-
based, in that it tries to involve all affected parties and stakeholders; holographic, as each
participant understands the working of the whole; and it stresses that participants act as project
designers and co-researchers. The concept of organizational ecology, and the use of search
conferences come out of contextual action research, which is more of a liberal philosophy, with
social transformation occurring by consensus and normative instrumentalism.
c) Radical Action Research
The Radical stream, which has its roots in Marxian ‘dialectical materialism’ and the praxis
orientations of Antonio Gramsci, has a strong focus on emancipation and the overcoming of
power imbalances. Participatory Action Research, often found in liberationist movements and
international development circles, and Feminist Action Research both strive for social
transformation via an advocacy process to strengthen peripheral groups in society.
d) Educational Action Research
A fourth stream, that of Educational Action Research, has its foundations in the writings of John
Dewey, the great American educational philosopher of the 1920s and 30s, who believed that
professional educators should become involved in community problem-solving. Its practitioners,
not surprisingly, operate mainly out of educational institutions, and focus on development of
curriculum, professional development, and applying learning in a social context. It is often the
case that university-based action researchers work with primary and secondary school teachers
and students on community projects.
Action Research Tools

Action Research is more of a holistic approach to problem-solving, rather than a single method
for collecting and analyzing data. Thus, it allows for several different research tools to be used
as the project is conducted. These various methods, which are generally common to the
qualitative research paradigm, include-keeping a research journal, document collection and
analysis, participant observation recordings, questionnaire.
Role of the Action Researcher
Upon invitation into a domain, the outside researcher’s role is to implement the Action Research
method in such a manner as to produce a mutually agreeable outcome for all participants, with
the process being maintained by them afterwards. To accomplish this, it may necessitate the
adoption of many different roles at various stages of the process, including those of
Planner Leader
Catalyze Facilitator
Teacher Designer
Listener Observer
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Synthesizer Reporter
The main role, however, is to nurture local leaders to the point where they can take responsibility
for the process. This point is reached they understand the methods and are able to carry on when
the initiating researcher leaves.
In many Action Research situations, the hired researcher’s role is primarily to take the time to
facilitate dialogue and foster reflective analysis among the participants, provide them with
periodic reports, and write a final report when the researcher’s involvement has ended.
The Action Research Model

Earlier in the chapter we described OD as a process of diagnosing, taking action, re-diagnosing,
and taking new actions. This process assumes a distinct form in OD called action research.
Action research is essentially a mixture of three ingredients: the highly participative nature of
OD, the consultant role of collaborator and co- learner, and the interactive process of diagnosis
and action. The action research model as applied in OD consists of
1. A preliminary diagnosis
2. Data gathering from client group
3. Data feed back to the client group
4. Exploration of the data by the client group
5. Action planning by the client group
6. Action taking by the client group
7. Evaluation and assessment of the results of the actions by the client group.
With an OD practitioners acting as facilitator throughout the process. The action research model
is powerful; seeking the ideas and energies of large number of people produces superior results.
Participation by client group members ensures better information, better decision making and
action taking, and increased commitment to the action programs.
Actions research yields both change and new knowledge. Change occurs based on the actions
taken, and new knowledge comes from examining the results of the actions. The client group
learns what works, what does not work and why.
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MODULE 6
Managing the OD Process: Components of OD Process, Diagnosis, Action & Program
Management; Diagnosis: Diagnosing the System, its subunits and Processes, Diagnosis using the
Six-box Organizational Model. Third Wave Consulting: The Action Component: nature of OD
intervention, analyzing discrepancies: The Program Management Component: Phases of OD
Programs, model for managing change, Creating parallel learning structures.
All OD programs have three basic components: Diagnosis, Action and Program management.
The diagnostic component represents a continuous collection of data about the total system, its
subunits, its processes and its culture. The action component consists of all activities and
interventions designed to improve the organizations functioning. The program management
component encompasses all activities designed to ensure success of the program.
The first step is to diagnose the state of the system, focusing on the clients major concerns. What
are its strengths? What are its problem areas? What are its unrealized opportunities? Or is there
any discrepancy between the vision of the desired future and the current situation? The diagnosis
identifies strengths, opportunities and problem areas.
Action plans are developed in step 2 to correct problems, seize opportunities, and maintain areas
of strength. These action plans are OD interventions specifically tailored to address issues at the
individual, group, intergroup or organizational levels as well as issues related to selected
processes. Step 3 consists of fact- finding about the results of the actions. Did the action have the
desired effects? Is the problem solved or the opportunity achieved? If the answer is yes,
organization members move on to new and different problems and opportunities. If the answer is
no, the members initiate new plans and interventions to resolve the issue.
During the entire sequence, managing the OD process itself requires attention. Energy and effort
are directed to ensuring that the program is supported by the organization members, that the
program is relevant to the organizations priorities, and that the program is making discernible
progress. Managing the OD program is a continuous activity.
DIAGNOISING THE SYSTEM, ITS SUBUNITS, AND PROCESS:

OD is at heart an action program based on valid information about the status quo, current
problems and opportunities, and effects of actions as they relate to achieving goals. An OD
program thus starts with diagnosis and employs data colleting and data analysis throughout.
Diagnostic activities: Activities designed to provide an accurate account of things as they really
are- are needed for two reasons. The first is to know the state of things or “what is” the second is
to know the effects or consequences of actions.
The importance of diagnostic activities is emphasized by Beckhard as follows;
The development of strategy for systematic improvement of an organization demands and
examination of the present state of things. Such an analysis usually looks at two broad areas. One
is a diagnosis of the various subsystems that make up the total organization. These subsystems
may be natural “teams” such as top management, the production department or research group or
they may be levels such as top management, middle management, or the work force.
The second area of diagnosis is the organization processes that are occurring. These include
decision-making processes, communications patterns as styles, relationship between interfacing
groups, the management of conflict, the setting of goals, and planning methods.
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Common methods of Diagnosis:

Diagnosing organization subsystems: Questionnaire surveys are most popular with large
organizations. Interviews both group and individual are useful for getting detailed information.
For small simple and relatively homogenous subsystems typical methods include, individual
interviews, followed by a group meeting to review the interview data, questionnaires,
observation of staff meetings and other day to day operations and a formal group meeting for
self-diagnosis. For interface or intergroup subsystems confrontation meetings between both
groups are often the method for data gathering and planning and corrective actions.
Diagnosing organizational process: Observations, especially in meetings, questionnaire for large
organizations, interviews, and discussions with group members and analysis of videotaped
sessions is especially useful for communication patterns, styles and flows. Interviews, third-party
observation meetings are common methods that can be useful for conflict resolution and
management. Questionnaire, interviews and observation are ways to asses goal-setting ability of
individuals and groups within the organization.
Continued diagnosis is thus necessary in any planned change effort. Such diverse activities as
getting rich, managing your time, and losing weight, for example all begin with an audit of “what
is” the status quo and then require continual monitoring of the changing status quo over time. By
comparing what is and what should be reveals the gap between actual and desired conditions.
Action plans are then developed to close the gap, and the effects (consequences) of these actions
are continuously monitored to measure the progress toward the goal. Diagnosis is therefore basic
to all goal seeking entities.
DIAGNOSING USING THE SIX BOX MODEL:

Another diagnostic tool is Marvin Weisbord’s six box model, a diagnostic framework published
in 1976, and still widely used by OD practitioners. This model tells practitioners where to look
and what to look in diagnosing organizational problems. As shown in the figure below, Weisbord
identifies six critical areas – purposes, structures, rewards, helpful mechanisms, relationships and
leadership – where things must be right if the organization is to be successful.
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Assume an organization has problems with one of its products. These problems will have their
causes in dysfunctional process located in one or more of the six boxes. The problems could be
caused by ill-advised structures, poor leadership, unclear purposes or purposes at variance with
the product, lack of helpful mechanism and so on. The six-box model is a simple but powerful
diagnostic tool.
According to Weisbord, the consultant must attend to both the formal and informal aspects of
each box, the formal system defines the official ways things are supposed to happen, the
informal system is the ways things really happen. For example, the formal reporting relationships
and organization of tasks and people prescribed in the structure box may not reflect the real
structural arrangements and processes called for by that formal arrangements are inappropriate,
but the informal system works around the deficiencies by developing methods to correct them.
By the same token, one may also find that the formal system is correctly designed, but the
informal system is not following those correct procedures and consequently performance suffers.
The formal/informal distinction, that is, what’s supposed to happen versus what is really
happening, is a powerful element of OD practice theory and one of the secrets to understanding
organizational dynamics. Weisbord recommends a thorough diagnosis looking at multiple boxes
before choosing interventions.
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THIRD WAVE CONSULTING:

About ten years after the six box model appeared, Weisbord wrote an article titled,”Toward
Third-Wave Managing and Consulting,” in which he reconsiders diagnosis and intervention.
“Third Wave” refer to the assertion by futurist Alvin Toffler that the world has progressed
through the agricultural revolution (the first wave) and industrial revolution (the second wave),
and is poised on the brink of an information and technological revolution (the third wave), in
which the hallmark will be rampant change in virtually all institutions of society, Weisbord
belives this requires new paradigms for managing and consulting.
Here he no longer likes a problem-centered, “sickness” model of organizational diagnosis in
which the diagnosis leads to a list of problems, and interventions are designed to cure the
problems.
Instead, he prefers to focus on “wellness” to help people achieve their desired futures and to
create workplaces that have meaning and community. Operationally, this means moving from a
view of the consultant as an expert on diagnosis and intervention, to a view of the consultant as a
stage manager of events to help people do what they are trying to do.
Weisbord identifies four “useful practices” for the third wave consultant:
(1) Assess the potential for action (look for situations with committed leadership, good business
opportunities, and energized people;
(2) Get the “whole system” in the room;
Examples of the whole system are-Managers of all the functional areas in a business,
representatives of the top management, across section employees from all levels, and supplier
and customer representatives, directors of all of the social service agencies in a community.
(3) Focus on the future;
(4) Structure tasks that people can do for themselves. This optimistic, goal-oriented view for
helping people in organizations is a valuable perspective on diagnosis, which means build a
database, look at it together, interpret what they find, and draw conclusions for actions.
THE ACTION COMPONENT, OD INTERVENTIONS:

OD interventions are sets of structured activities in which selected organizational units engage in
a sequence of tasks that will lead to organizational improvements. Interventions are actions taken
to produce desired changes.
Typically, one of four conditions gives rise to the need for OD interventions.
First, the organization has a problem, something is “broken”. Corrective actions interventions –
are implements to “fix” the problem.
Second , the organization sees an unrealized opportunity, something it wants beyond its reach.
Enabling actions – interventions – are developed to seize the opportunity.
Third, features of the organization are out of alignment: parts of the organization are working at
cross – purposes. Alignment activities – interventions – are developed to get things back “in
sync”.
Fourth, the vision guiding the organization changes: yesterday’s vision is no longer good
enough. Actions to build necessary structures, processes and culture to support the new vision-
interventions-are developed to make the new vision a reality. In summary, interventions are
planned sets of actions to change situations the organization members want to change. The range
of OD interventions is quite extensive. Interventions have been developed to solve most
problems related to the human side of organizations.
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THE NATURE OF OD INTERVENTIONS:

To intervene in the client system is to interpose activities so that the intervention activities are
done in addition to the normal activities or are done instead of the normal activities.
A well designed OD program unfolds according to a game plan, called the overall OD strategy.
This strategy may be planned in advance or may emerge as events dictate.
Most OD interventions minimize this artificial separation in several ways; The strategy is based
on answers to question such as: What are the overall change/improvement goals of the program?
What parts of the organization are most ready and receptive to the OD program? What are the
key leverage points (individuals and groups in the organization), What are the main pressing
problems of the organization? Answers to these questions leads the practitioner to develop a
game plan for where to intervene in the system, what to do, how to sequence interventions and so
forth.
First, many intervention activities have two goals: an educational goal and an accomplishing-a-
task goal.
Second, OD problem solving interventions tend to focus on real problems central to the
organization’s needs rather than hypothetical problems that may or may not fit in members
needs.
Third, OD interventions use several learning models. Let us examine these three points in greater
detail.
The dual aspects of OD interventions can be clarified with an illustration.
Let us say that the top executives of an organization spend three days in a workshop in which
they do the following things:
[1] Explore the need for a long-range strategic plan for the organization:
[2] Learn how to formulate such a strategy by analyzing other strategies, determining the
strategic variables, being shown a sequence of steps for preparing a comprehensive plan, and so
forth.
[3] Actually make a three-year strategic plan for the organization. This intervention combines the
dual features of learning and action; the executives learned about strategic planning, and they
generated a strategy. In some OD interventions, the “learning aspect” predominates, and in
others, the “action aspect” predominates: but both aspects are present in most interventions.
ANALYZING DISCREPANCIES:
A use full model for thinking about diagnosis and intervention could be termed discrepancy
analysis- examining the discrepancies or gaps between what is happening and what should be
happening, and the discrepancies between where one is and where one wants to be.
Discrepancies, therefore, define both problems and goals.
Discrepancies require study (diagnosis & planning) and action to eliminate the gaps. We believe
that a good part of OD is problem solving, hence, discrepancy analysis. Action research
describes an iterative problem and opportunities (goals) or the study of the discrepancies
between where one is and where one wants to be. Organization development provides
technologies for study and closing gaps. Goals also represent gaps-gaps between where we are
and where we want to be. Goal setting is the process of imposing a gap; goal accomplishment is
made possible by taking actions to close this gap. Organization development is more than just
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problem solving and goal seeking but a large part of any OD program is devoted to these two
critical activities. Discrepancy is a fruitful way to conceptualize problems and goals.
THE PROGRAM MANAGEMENT COMPONENT:

Just as OD practitioners apply behavioral science principles and practices to improve
organisational functioning and individual development, they apply these same principles and
practices as they manage OD programs. They attend equally to task and process. They consider
systems ramifications of the program, involve organization members in planning and execution,
use an action research model, create feedback loops to ensure relevance and timeless, and so
forth.
Managing the OD program effectively means the difference between success and failure. The
aim of program management component is to provide guidelines to help ensure success in
managing OD programs. Specifically, we examine the phase in OD programs; several change
management models, and a procedure for creating parallel learning structures.
PHASES OF OD PROGRAMS:
OD programs follow logical progression of events- a series of phases that unfolds over time. An
important part of managing an OD program well is to execute each phase well. Warner Burke
describes the following phases of OD programs:
a) Entry
b) Contracting
c) Diagnosis
d) Feedback
e) Planning change
f) Intervention
g) Evaluation
a) Entry represents the initial contract between consultant and clients; exploring the situation that
led the client to seek a consultant; and determining whether the problem or opportunity, the
client, and the consultant constitute a good match.
b) Contracting involves establishing mutual expectations; reaching agreement on expenditures of
time, money, resources, and energy; and generally clarifying what each party expects to get from
the other and give to the other.
c) Diagnosis is the fact-finding phase, which produces a pitcher of the situation through
interviews, observations, questionnaires, examination of organization documents and
information, and the like. Burke observes that the diagnostic phase has two steps – gathering
information and analyzing it.
d) Feedback represents returning the analyzed information to the client system; the clients
exploring the information for understanding, clarification and accuracy; and the clients owning
the data, their pitcher of the situation, and their problems and opportunities.
e) Planning change involves the clients deciding what action steps to take based on the
information they have just learned.
f) Interventions involve coming out with structured activities in which organizational units
engage themselves in a task or sequence of tasks with the goals of the organizational
improvement and organization development.
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g) Evaluation is done in order to find out if the efforts or programs have led to desirable results
and if it is not so evaluation helps to rework and restructure the program inorder to arrive at the
desired result.
A MODEL FOR MANAGING CHANGE:

Change is a continuous process. Change is moving from the existing state of affairs to the
desired state of affairs.
Another way to think about managing OD programs is to ask the questions: what are the key
ingredients in successful change efforts?
Cumming and Worley identify five sets of activities required for effective change
management:
a) Motivating change
b) Creating vision
c) Developing political support
d) Managing the transition
e) Sustaining momentum
a) Motivating change
The first step is getting people to want to change, to believe change is necessary, and to commit
to abandoning the status quo for an uncertain future. It includes creating readiness for change and
overcome resistance to change.
The next set of activities, overcoming resistance to change, is achieved through three
methods: Dealing empathetically with feelings of loss and anxiety, providing extensive
communication about the change effort and how it is proceeding, and encouraging participation
by organization members in planning and executing the change.
b) Creating vision
Creating a vision provides a picture of future and shows how individuals and groups will fit into
that future. Creating a vision includes Mission, valued outcomes, value conditions and goals.
c) Developing political support
Developing political support is critical in successful change efforts. Powerful individuals and
groups must be convinced that the change is good for them or at least will not significantly harm
them, or else they will resist and even sabotage the effort. Developing political support includes
assessing change agent power, identifying key stakeholders, and influencing stake holders.
d) Managing the transition
Inorder to ensure better results and accurate performance, it is equally important to manage the
changes or transition effectively. It includes activity planning, commitment planning, and
management structures
e) Sustaining momentum
To maintain consistency in the performance and to stabilize things you need to balance between
all the resources in the system and at times need to be proactive as well to maintain and sustain
momentum. It also includes providing resources for change, building support system for change
agents, developing new competencies and skills, and reinforcing new behaviors.
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PARALLEL LEARNING STRUCTURES:

Dale Zand introduced the concept in 1974 under the label collateral. Organization defined it
as a supplemental organization co-existing with the usual form of organization.
The purpose of collateral organization is to deal with ill-structured problems which the formal
organization is unable to resolve.
Parallel learning structure is specially created organisational structure for planning and guiding
change programs. Parallel learning structures are mechanism to facilitate innovation in large
bureaucratic organizations where forces of inertia, hierarchical communication patterns, and
standard way of addressing problems inhibit learning, innovation and change. In essence, parallel
structures are a vehicle for learning how to change the system, and then leading the change
process.
In its most basic form, a parallel learning structures consists of a steering committee and a
number of working groups that study what changes are needed, make recommendations for
improvement, and monitor the change efforts. It should have representations from all parts of the
organization. Additional refinements include work groups, action groups, idea groups or
implementation groups.
The charge to members of the parallel learning structure is to think and behave in ways that are
different from the normal roles and rules of the organization. The key thing about parallel
structures is that they create a bounded space and time for thinking, talking, deciding and acting
differently than normally takes place at work.
The most important and difficult task for the public creating the parallel learning structure is to
create a different culture within it. It is not the supplemental structure that is important, what is
more important is that which promotes learning and adaptation.
High performance organizations often use parallel learning structure to co-ordinate self-directed
teams. At Ford Motors Co, a steering committee and working groups were used to co-ordinate
the employee involvement teams. Parallel learning structure are often the best way to initiate
change in large bureaucratic organization especially when the change involves a fundamental
shift in the organization methods of work and a culture.
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MODULE 7
OD interventions: Definition, factors to be considered, choosing and sequencing intervention
activities, classification of OD interventions, results of OD, typology of interventions based on
target groups.
Human process interventions (individual, group and inter-group human relations):
Individual based: coaching, counseling, training, Behavioral modeling, delegating, leading,
morale boosting, mentoring, motivation, etc.
Group based: conflict management, dialoging, group facilitation, group learning, self-directed
work teams, large scale interventions, team building, and virtual teams.
Inter-group based: Organization mirroring, third party peacemaking interventions, partnering
Techno structural (Structures, technologies, positions etc.) & Strategic interventions:
Techno structural: Balanced scorecard; business process reengineering; downsizing and
outsourcing;
INTRODUCTION:
Knowing the OD intervention and the rational for their use shows how change takes place in OD
programs because interventions are the vehicles for causing change.
OD interventions are set of structured activities in which selected organisational units (target
groups or individuals) engage in a task or sequence of task with the goals of organisational
improvement and individual development. Intervention constitutes the action thrust of
organization development.
The OD practitioner, a professional versed in the theory and practice of OD, brings four sets of
attributes to the organizational setting: a set of values; a set of assumptions about people,
organization and interpersonal relationships; a set of goals for the practitioner and the
organization and its members and a set of structured activities that are the means for achieving
the values assumptions and goals. These activities are what we mean by the word interventions.
THINKING ABOUT OD INTERVENTIONS

First, behind every program is an overall game plan or intervention strategy. This plan integrates
the problem or opportunity to be addressed, the desired outcomes of the program, and the
sequencing and timing of the various interventions. Interventions strategies are based on
diagnosis and the goals desired by the client system.
Second, some ways to structure activities to promote learning and change are “better”. And some
are “worse”.
Third set of considerations concerns choosing and sequencing intervention activities. Michael
Beer suggests the following guidelines:
a) Maximize diagnostic data: In general, interventions that will provide data needed to make
subsequent intervention decisions should come first. This is particularly true when change agents
do not know much about the situation. Violation of this rule can lead to choosing inappropriate
interventions.
b) Maximize effectiveness: Interventions should be sequenced to that early interventions
enhance the effectiveness of subsequent interventions. For example, interventions that develop
readiness, motivation, knowledge, or skills required by other interventions should come first.
Violation of this rule (leapfrogging) can result in interventions that do not achieve their
objectives, regression, and the need to start a new sequence of interventions.
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c) Maximize efficiency: Interventions should be sequenced to conserve organizational resources

such as time, energy, and money. Violation of this rule will result in overlapping interventions or
in interventions that are not needed by certain people or parts of the organisation.
d) Maximize speed: Interventions should be sequenced to maximize the speed with which
ultimate organisational improvement is attained. Violation of this rule occurs when progress is
slower than is necessary to conform to all the other rules.
e) Maximize relevance: Interventions that management sees as most relevant to immediate
problems should come first. In general, this means interventions that will have an impact on the
organization’s performance or task come before interventions that will have an impact on
individuals or culture. Violation of this rule will result in loss of motivation to continue with OD.
f) Minimize psychological and organisational strain: A sequence of interventions should be
chosen that is least likely to create dysfunctional effects such as anxiety, insecurity, distrust,
dashed expectations, psychological performance. Violating this rule will lower people’s sense of
competence and confidence and their commitment to organisational improvement.
Fourth, different interventions have different dynamics; they do different things because they are
based on different casual mechanisms.
CLASSIFYING OD INTERVENTION
The inventory of OD interventions is quite extensive. We will explore several classification
schemes here to help you understand how interventions “clump” together in terms of the
objectives of the intervention and the targets of the intervention. Becoming familiar with how
interventions relate to one another is use full for planning the overall OD strategy.
The following are the major “families” of OD interventions:

a) Diagnostic Activities: Fact-finding activities designed to ascertain the state of the system, the
status of the problem, the “way things are”. Available methods range from projective devices
such as “build a collage that represents your place in this organization” to the more traditional
data collection methods of interviews, questionnaires, surveys, meeting, and examining
organisational records.
b) Team-Building Activities: Activities designed to enhance the effective operations of system
teams. These activities focus on task issues, such as the way things are done, the skills and
resources needed to accomplish tasks, the quality of relationship among the team members or
between members and the leader, and how well the team gets its job done. In addition, one must
consider different kinds of teams, such as formal work teams, temporary task force teams, newly
constituted teams, and cross-functional teams.
c) Intergroup Activities: Activities designed to improve the effectiveness of interdependent
groups- groups that must work together to produce a common output. They focus on joint
activities and the output of the groups considered as a single system rather than as two
subsystems. When two groups are involved, the activities are designated intergroup or interface
activities when more than two groups are involved, the activities are called organisational
mirroring.
d) Survey Feedback Activities: Activities that rely on questionnaire surveys to generate
information that is then used to identify problems and opportunities. Groups analyze the data
regarding their performance and design action plan to correct problems.
e) Education and Training Activities: Activities designed to improve individual’s skills,
abilities and knowledge. Several activities are available and several approaches possible. For eg:
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the individual can be educated in isolation from his or her own work group (say, in T-group
comprised of strangers), or one can be educated in relation to the work group (say, when a work
team learns how better to manage interpersonal conflict).
f) Techno structural or Structural Activities: Activities designed to improve the effectiveness
of organizational structures and job designs. The activities may take the form of experimenting
with new organization structures and evaluating their effectiveness in terms of specific goals or
devising new ways to bring technical resources to bear on problems.
g) Process Consultation Activities: Activities that “ help the client to perceive, understand, and
act upon process events which occur in the clients environment.” These activities perhaps more
accurately describes an approach, a consulting mode in which the client gains insight into the
human processes in organizations and learns skills in diagnosing and managing them.
h) Grid Organization Development Activities: Activities developed by Robert Blake and Jane
Mouton, which constitute a six phase change model involving the tool organization. Internal
resources are developed to conduct most of the programs, which may take from three to five
years to complete. The model starts with upgrading individual manager’s skills and leadership
abilities, moves to team improvement activities, then to intergroup relation activities.
i) Third Party Peacemaking Activities: Activities conducted by a skilled consultant ( the third
party) designed to “ help two members of an organization manage their interpersonal conflict”.
These activities are based on confrontation tactics and an understanding of the processes
involved in conflict and conflict resolution.
j) Coaching and Counseling Activities: Activities that entail the consultant or other
organization members working with individuals to help
a) Define learning goals
b) Learning as how others see their behavior
c) Learn new behaviors to help them better achieve their goals.
k) Life and Career- Planning Activities: Activities that enable individuals to focus on their life
and career objectives and how to go about achieving them. Structured activities include
producing life and career inventories, discussing goals and objectives and assessing capabilities
needed additional training and areas of strength and deficiency.
l) Planning and Goal-Setting Activities: Activities that include theory and experience in
planning and goal setting, problem-solving models, planning paradigms, ideal organization
versus real organization “ discrepancy” models and the like. The goal is to improve
these skills at the levels of the individual, group and total organization.
m) Strategic Management Activities: Activities that help key policymakers to reflect
systematically on the organizations basic mission and goals and environmental demands, threats
and opportunities and engage in long range action planning of both a reactive and proactive
nature. These activities direct attention in two important directions outside the organization to a
consideration of the environment and away from the present to the future.
n) Organisational Transformation Activities: Activities that involve large scale system
changes activities designed to fundamentally change the nature of the organization. Almost
everything about the organization is changed- structure, management philosophy, reward
systems the design of work, mission, values, and culture. Total quality programs are
transformational so are program to create high performance organizations or high- performance
work systems. Socio-technical systems theory and open systems planning provide the basis for
such activities.
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Typology of OD Interventions Based on Target Groups:
Life and career planning activities

Coaching and counseling-group (sensitivity
training)
Education and training to increase skills, knowledge
in the area of technical task needs, relationship
Individuals skills, process skills, decision making , problem
solving, planning, goal setting skills
Grid OD phase 1
Work redesign
Gestalt OD
Behavior modeling
Process consultation
Dyads/Triads Third party peacemaking
Role negotiation technique
Gestalt OD
Team building –Task directing
Process directed
Gestalt OD
Grid OD phase 2
Interdependency exercise
Appreciative inquiry
Responsibility charting
Role negotiation
Role analysis technique
Team and group “startup” team –building activities
Education in decision making, problem solving,
planning, goal setting in group settings
Team MBO
Appreciations and concerns exercise
Sociotechnical system (STS)
Visioning
Quality of work life (QWL) program
Quality circles
Force-field analysis
Self –managed teams
Intergroup activities – Process directed

- Task directed
Intergroups Relations Organisational mirroring
Partnering
Third party peacemaking at group level
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Grid OD phase 3
Survey feedback
Sociotechnical systems(STS)
Parallel learning structures
MBO(participation forms)
Cultural analysis
Confrontation meetings
Visioning
Stratergic planning/stratergic management activities
Peal time strategic change
Total organisation Grid OD phase 4,5,6
Interdependency exercise
Survey feedback
Appreciative inquiry
Search conferences
Quality of work life (qwl) programs
Total quality management(TQM)
Physical settings
Large-scale systems change
INDIVIDUAL BASED INTERVENTIONS

A) BEHAVIOR MODELING:
Behavior modeling is a training technique designed to improve interpersonal competence. It is an
effective tool for improving interpersonal skills because problems with interpersonal relations
are common in organizations. For the persons to engage successfully in a behavior, they must
perceive a link between the behavior and certain outcomes, must desire those outcomes which
are positive, must believe they can do it (called self-efficacy). Behavior modeling works, it
teaches the skills and behaviors needed to deal with interpersonal problems.
B) COACHING AND MENTORING:

Coaching and Counseling Activities: Activities that entail the consultant or other organization
members working with individuals to help
a) Define learning goals
b) Learning as how others see their behavior
c) Learn new behaviors to help them better achieve their goals.
d) Coaching usually focuses on job performance.
Mentoring:
Is usually much broader and focuses on general career and personal development. The mentor
role is usually filled by someone other than the immediate superior and usually by a person of
higher rank from outside the employees department. Mentoring can be accomplished on a person
to person basis, or the mentor can meet with a small group of four to six. With the group
approach the group has the potential to evolve into a great learning team whose members can
coach each other. It is a relationship between an experienced person and a less experienced
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person for the purpose of helping one with less experience. The mentor provides wisdom,
guidance and counseling and mentees advance their lives, career and education.
The different ways of mentoring are:
a) Informal mentoring
b) Structured mentoring
c) Peer mentoring
d) Community based mentoring
e) Online mentoring
C) TRAINING:
Training is an important subsystem of HRD:
A current / potential employee requires training:
a) To increase / enhance skills
b) To acquire knowledge
c) To be adaptable & versatile at the job.
Training is necessary to bridge the gap between job requirements & employee’s
specifications:
a) Inadequate job performance
b) Decline in productivity
c) Changes due to job redesigning
d) Technological breakthrough
Training Advantages:
a) Process of learning a sequence of programmed behavior
b) Involves changes in skills, attitudes, knowledge or social behavior
c) Improves job behavior
d) Creates awareness
e) Short term
f) Very specific and job related
D) DELEGATING:
A person authorized to act as a representative for another. Delegation is one of the most
important management skills. These logical rules and techniques will help you to delegate well
(and will help you to help your manager when you are being delegated a task or new
responsibility - delegation is a two-way process!). Good delegation saves you time, develops you
people, grooms a successor, and motivates. Poor delegation will cause you frustration, de -
motivates and confuses the other person, and fails to achieve the task or purpose itself. So it's a
management skill that's worth improving.
Here are the simple steps to follow if you want to get delegation right, with different levels of
delegation freedom that you can offer.
This delegation skills guide deals with general delegation principles and process, which is
applicable to individuals and teams, or to specially formed groups of people for individual
projects (including 'virtual teams').
Delegation is a very helpful aid for succession planning, personal development - and seeking and
encouraging promotion. It's how we grow in the job - delegation enables us to gain experience to
take on higher responsibilities.
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Effective delegation is actually crucial for effective succession. For the successor, and for the
manager too: the main task of a manager in a growing thriving organization is ultimately to
develop a successor. When this happens everyone can move on to higher things. When it fails to
happen the succession and progression becomes dependent on bringing in new people from
outside.
Delegation can be used to develop your people people and yourself - delegation is not just a
management technique for freeing up the boss's time. Of course there is a right way to do it.
These delegation tips and techniques are useful for bosses - and for anyone seeking or being
given delegated responsibilities.
As a giver of delegated tasks you must ensure delegation happens properly. Just as
significantly, as the recipient of delegated tasks you have the opportunity to 'manage upwards'
and suggest improvements to the delegation process and understanding - especially if your boss
could use the help.
Managing the way you receive and agree to do delegated tasks is one of the central skills of
'managing upwards', and also will help improve individual contribution towards the organization
for a positive outcome.
E) MORALE BOOSTING:
Managers important jobs is to keep spirits up in the workplace. With stress levels in
organizations and company’s at an all times high, this isn’t always easy to do. Inorder to boost
morale of employees you can come out with strategies. By sponsoring a movie, meetings outside
the office, allowing to come an hour late on any particular date, taking picture and adding them
to the humid corner and by not pressurizing them to do a task will always boost the employees
morale and will contribute in an effective manner.
GROUP BASED INTERVENTIONS

A) CONFLICT MANAGEMENT:
Sources of Organizational Conflicts
People like to be powerful, to have control and mastery over their life and work. Adler (1927), in
fact, proposed power as a basic human motive. An ideal condition of organizational life would
be, if every job-occupant feels equally and adequately empowered to manage his work.
However, it is generally accepted that organizations do not (and probably cannot) distribute
power equally across different hierarchical levels. The structural arrangements in organizations
inadvertently end up by giving some departments or jobs more power than they rationally
require, while leaving others with lesser influence than they deserve. These power imbalances
stimulate the less powerful to put in efforts to enhance their power, leading to organizational
conflicts. Like organizational power, organizational conflicts also have their roots in
organizational structure. A number of structural factors, which contribute to organizational or
interdepartmental conflicts are differentiation, interdependence among subunits, performance
and reward criteria and incongruent relationships.
Managing Organizational Conflicts:

Like power politics, conflict is also a largely negatively understood term. Most often, it is
interpreted as a hindrance in the teamwork, which is supposed to be essential for achieving a
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common organizational goal. Correspondingly, management of conflicts is often equated with

elimination or avoidance of conflicts. Responsible managers, it is assumed, must ensure that
conflicts do not arise and harmony prevails. This popular view (shared by the managers) was
further strengthened in a study by Singh & Parthasarathy (1985). Based on the responses of 242
executives, they should conclude that the avoidance of conflicts and compromising when a
conflict situation arises appeared to be the most prevalent styles of conflict management among
Indian Executives.
Managing Organizational Conflicts: A Contingency Perspective

The best way of managing conflicts is through:
Collaboration: It is a problem solving approach and therefore encourages more creative and
innovative activities in the organization. Three of the most common methods for managing
conflicts through encouraging collaboration are as follows:
a) Creating super ordinate goals
b) Joint problem solving
c) Increased interactions
Power-play: Power-play or power politics is the archetypal anthithesis of collaborative strategy.
Whereas collaboration is a win win strategy, which aims at establishing acceptable rules of
interaction, power-play aims at a win/lose situation by circumventing or distorting the
established rules. Power-play is an organizational reality, which often fulfills useful aims.
Gerloff and Cummins identified a list of power tactics used by executives and sub-units in the
organization. They are:
a) Withholding information
b) Blocking-off information coming
c) Delaying agreements and decisions
d) Emphasizing perfectionism
e) Protecting ones territory
Bargaining: Bargaining is a middle-ground between the collaborative and political strategies of
conflict management. It incorporates elements from both strategies-the problem solving stance of
the collaborative approach, as well as the tactical moves and counter moves of the power-play. It
is one of the most commonly used conflict management strategy.
Based on the studies of bargaining behavior Thomas, Lawler, Walton identified the following
four critical features of this approach:
a) Selective sharing of information
b) Continuous revaluations of one’s position
c) Variations in pressure tactics
d) Trade-offs
Structural and Procedural Strategies: It involves reasonable manipulation of organizational
elements which would help in resolving organizational conflicts. Some of the conflict
management strategies which involve rearrangement of organizational elements are as follows:
a) Reducing interdependence among units
b) Top-down interventions
c) Enlarging resources
d) Combining conflicting units
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B) TEAM BUILDING:
Team building interventions are typically directed toward four main areas: diagnosis, task
accomplishments including problem solving, decision making, role clarification, goal setting,
etc, team relationships meaning building and maintaining effective interpersonal relationships
including boss-subordinate relationships and peer relationship, and team organization
processes. In other words, according to Richard Beckhard the four major reasons or purposes
involved in having teams meet other than for the sharing of information. They are, to set goals
and priorities, to analyze or allocate the way work is performed, to examine the way a group is
working its process such as norms, decision making, communications) and to examine the
relationships among people doing the work. Activities designed to enhance the effective
operations of system teams. These activities focus on task issues, such as the way things are
done, the skills and resources needed to accomplish tasks, the quality of relationship among the
team members or between members and the leader, and how well the team gets its job done. In
addition, one must consider different kinds of teams, such as formal work teams, temporary task
force teams, newly constituted teams, and cross-functional teams. Techniques and exercises used
in team building interventions are: Role analysis technique, interdependency exercise, nole
negotiation technique, appreciation and concerns exercise, responsibility charting, visioning,
force-field analysis(understanding a problematic situation and taking corrective actions).
Purpose of team building interventions:
a) To get the right people together
b) To avoid a large block of uninterrupted time
c) To work on high-priority problems or opportunities
d) To structure and enhance the likelihood of realistic solutions
e) To ensure action plans are enthusiastically implemented
TEAM BUILDING INTERVENTIONS:

Gestalt Approach to team building:
A form of team building that focuses more on individual than the group is the gestalt therapy.
The major advocate of this orientation is Stanley. M. Herman. It is based on the belief that
persons function as a whole total organisms. And each person possesses positive and negative
characteristics. The goals of the gestalt therapy is awareness, integration, maturation,
authenticity, self-regulation and behavioral change. Basically, one must come to terms with
oneself, must accept responsibility for ones actions, must experience and must stop blocking off
awareness, authenticity and the like by dysfunctional behaviors.
Staley applies a gestalt orientation to organization development, especially in working with
leader sub-ordinate relations and team building. The primary thrust is to make individual
stronger, more authentic and more in touch with the individuals own feelings, building a better
team. Also, it is to provide instruction on making the organization culture safer, more pleasant
and easy for the individual.
Techniques and exercises used in Team Building
a) Role analysis technique.
b) Interdependency exercises
c) A role negotiation technique
d) The appreciation and concerns exercise
e) Responsibility charting
f) Visioning
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g)Force-field analysis
Probably the oldest intervention in the OD practitioner’s kit bag is the force-field analysis. I is a
device for understanding a problematic situation and planning corrective actions. This technique
rests on several assumptions: The present state of things and the desired state of things. The
current condition is a resultant in a field of opposing forces. A desired future state of affairs the
desired condition can be achieved dislodging the current equilibrium moving it to the desired
state and stabilizing the equilibrium at that point.
This technique was proposed by Kurt Lewin in 1947. It was to apply the device to social
problems, social eqilibria and social change.
It involves the following steps:
Decide upon a problematic situation you are interested in improving
Carefullly and completely describe the desired situation
Identify the forces and factors operating in the current force field
Examine the forces. Which ones arestrong and which ones are weak?
Startegies for moving the equilibrium from the current condition to the desired condition
Implement the action plans
Describe what action must be taken to stabilize the equilibrium at the desired condition and
implement those actions
LARGE-SCALE INTERVENTION:
By Large-scale systems change we mean organizational change that is massive in terms of the
number of organizational units involved, the number of people affected, the number of
organizational subsystems altered, and the depth of the cultural change involved. For example
eight to four and shifting to a more participative leadership style might involve every unit of the
organization, affect the responsibilities of every employee at every level, and would require
changes in such aspects as work flow, reporting relationships, job descriptions and titles,
compensation, and training programs.
Organizational transformation, or second-order change, usually requires a multiplicity of
interventions and takes place over a fairly long period of time. For example, the five year
organizational transformation process at British airways, as reported by Goodstein and Burke.
a) Replacement of the top management team.

b) Redefining the nature of the business from transportation to service.
c) Diagonal task forces to plan changes.
d) A reduction in hierarchical levels.
e) Team building, including role clarification and negotiation.
f) Process consultation.
g) Modifying the budget process.
h) Top management commitment and involvement.
i) Personal staff trained to be internal consultants.
j) Peer support groups
k) Performance-based compensation and profit sharing.
l) Experimental training programs for senior and middle managers including feedback on
managerial behavior.
m) Open communications.
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n) Continuous data-based feedback on work group and organizational climate and

management practices.
o) A new appraisal system emphasizing both behavior and performance.
p) Continuous use of task forces.
SELF-MANAGED TEAMS:
a) It involves providing teams with a grouping of tasks that comprises a major unit of the total
work to be performed.
b) It involves training group members in multiple skills, including team-effectiveness skills.
c) Delegating to the team many aspects of how the work gets done.
d) Providing a great deal of information and feedback for self-regulation of quality and
productivity.
e) Solving the problem of dislocation of first line supervisors.
f) It reconceptualises the role of managers with emphasis on coaching, expediting and
coordinating.
GROUP FACILITATION:
Facilitation serves the need of any group who are meeting with a common purpose whether
decision making, problem solving, and exchanging of ideas. It helps a group to accomplish it’s
goals. It concerns itself with all the tasks needed to run a productive and impartial learning. It
doesn’t lead the group nor does it try to distract or entertain.
VIRTUAL TEAMS:
Are teams of people who primarily interact electronically and who may meet face-to-face
occasionally. They are geographically dispersed team. They work across time, space and
organization boundaries.
GROUP LEARNING:
It helps achieving multi-faceted objectives related to problem solving, decision making and other
complex life skills. It is ideal vehicle for cultivating creative thinking and other processes. It is
versatile in nature. It improves communication and interpersonal skills.
DIALOGUING:
It is interactive communication to understand a subject. It’s objective is to take part in a
conversation or discussion to resolve a problem, exchange of opinions on a particular subject or
it is any discussion intended to produce an agreement. Dialoguing helps in better understanding
and better communication among members and furthers increases the employee contribution
towards the organization.
INTER GROUP BASED TEAM BUILDING INTERVENTIONS

The focus of this team building group of OD interventions is on improving intergroup relation.
The goals of these activities are to increase communications and interactions between work
related groups, to reduce amount of dysfunctional competition.
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THIRD PARTY PEACEMAKING INTERVENTIONS:

When tension, conflicts or competition exist among groups, some predictable things happen each
group sees the other as an “enemy” rather than as a neutral object each group describes the other
in terms of negative stereotypes, interaction and communication between the two groups
decrease, cutting off feedback and data input between them.
Several strategies for reducing intergroup conflict have been identified in the literature. They
include a “common enemy” (an outside object or group that both groups dislike, which brings
the group closer together). Increasing the interaction and communication among the groups
(increased interaction under favorable conditions tends to be associated with increased positive
feelings and sentiments) finding a super ordinate goal (a goal that both group desire to achieve
but that neither can achieve without the help of the other) rotating the members of the groups and
instituting some form of training.
Walton’s Approach to Third Party Peacemaking

Third party interventions into conflicts situations having the potential to control (contain) the
conflict or resolve it. R.E.Walton has presented a statement of theory and practice for third party
peacemaking interventions that is both important in its own right and important for its role in
organization development.
A basic feature of third-party intervention is confrontation. The two principals must be willing to
confront the fact that conflict exists and that it has consequences for the effectiveness of the two
parties involved.
The third party must know how when and where to utilize confrontation tactics that expose the
conflict for examination.
The third party must be able to diagnose conflict situations, and Walton presents a diagnostic
model of interpersonal conflict based on four basic elements the conflict issues, the
precipitating circumstances, the conflict relevant acts of the principals, and the
consequences of the conflict. In addition, conflict is a cyclical process, and the cycles may be
benevolent, malevolent, or self-maintaining.
Intervention tactics for the third party consist of structuring confrontation and dialogue between
the principals. Walton lists the ingredients of productive confrontation. (our intervention is
shown in brackets)
a) Mutual positive motivation [both parties are disposed to attempt to resolve the conflict]
b) Balance in the situational power of the two principals [power parity is most conductive to
success]
c) Synchronization of their confrontation efforts [initiatives and readiness to confront should
occur in concert between the two parties]
d) Appropriate pacing of the differentiation and integration phases of a dialogue [ time must
be allowed for working through of negative feelings and clarification of ambivalent or
positive feelings]
e) Conditions favoring openness in dialogue [norms supporting openness and reassurance
for openness should be structures for the parties]
f) Reliable communicative signs [making certain each can understand the other]
g) Optimum tension in the situation [there should be moderate stress on the parties]
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The third party will intervene directly and indirectly in facilitating dialogue between the
principals and resolves existing problems and differences in the organization.
Confrontation means the clashing of forces or ideas and in other words a meeting faces to face.
Entire management of an organization meeting in order to take a reading of their own health is
confrontation.
The different steps involved are:
Climate setting, information gathering, information sharing, priority setting, group action
planning, immediate follow up and progress review.
ORGANISATION MIRROR INTERVENTIONS

It is a set of activities in which a particular organizational group, the host group, gets feedback
from representatives from several other organizational groups about how it is perceived and
regarded.
This intervention is designed to improve the relationships between groups and increase the
intergroup work effectiveness
It is different from the intergroup team-building intervention in that:
Three or more groups are involved.
Representatives of other work related groups typically participate rather than the full
membership.
The focus is to assist the host unit that requested the meeting.
Process:
Host group asks key representatives from interface group (customer-supplier groups) to meet and
provide feedback.
Pre- and post interviews by consultant to ID magnitude of issue(s), preparing participants and
answers to their questions.
At the actual session:
Opening remarks by manger of host group to set tone.
Guests use fishbowl discussion to maintain natural flow, hosts listen. (A fishbowl is a group
seating and talking configuration in which there is an inner circle of chairs for people who talk
and an outside circle of observers and non interactions.)
Hosts fishbowl discusses, ask for clarification from guests.
Subgroups of guests and hosts form to ID most important changes host group needs to make.
Reconvene in large group to hear summaries of each sub group and form master task list.
Action planning, tasks, responsible parties, completion dates established and agreed, concluding
mirroring session
Follow-up meeting to assess and review progress
PARTNERING
In situation in which two or more organizations are likely to incur unnecessary conflict and cost
overruns such as the owner-contractor relationship in a large constructing project, an intervention
called partnering can be productive for both parties. Partnering is a variation of team building,
intergroup team building and strategic planning having the objective of forming an effective
problem-finding/problem-solving management team composed of personnel from both parties,
thus creating a single culture with one set of goals and objectives for the project. Partnering has
been used in private sector. In a partnering project, intervention includes these steps or events:
a) They select the consultants.
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b) Participants include key managers and consultants.

c) The workshop focuses on team building, action research, and planning-including advanced
conflict resolution methods, developing a shared vision, and strategic planning with a common
set of goals and objectives.
d) At the workshop mutual commitment to teamwork, equitable problem solving and open
communications are made.
e) A follow-up workshop has to be done.
Partnership tended to report better results. As a result, partnering has been used on several other
large government projects involving Navy, NASA and other contractors.
TECHNOSTRUCTURAL AND STRATEGIC INTERVENTIONS:

Techno-structural interventions are change efforts which are aimed at improving organization
effectiveness through changes in the tasks, structural, technological and goal process in the
organization. This class of interventions includes changes in the overall work of the organization
as to how the work is divided into units, who reports to whom, methods of control, the spatial
arrangements of equipment and people, workflow arrangements and changes in communication
and authority.
BALANCE SCORE CARD:

The balance scorecard is a strategic performance management tool. It helps to align specific
activities with an organizations strategy and vision. It was developed by Robert Kalpan and Dr.
David Norton. It is designed to help communicate and measure goals and performance.
Instead of such a short-sighted, after-the-fact view of company performance, we need a more
comprehensive view with an equal emphasis on outcome measures (the financial measures or
lagging indicators), measures that will tell us how well the company is doing now (current
indicators) and measures of how it might do in the future (leading indicators)
What is the balanced scorecard?
The balanced scorecard is a way of:
a) Balancing long-term and short-term actions
b) Balancing different measures of success
c) Financial
d) Customer
e) Internal Operations
f) Human Resource Systems & Development (learning and growth)
g) A way of tying strategy to measures to action
h) Measuring organizational, business unit or department success
Four Kinds of Measures

Under the balanced scorecard system, financial measures are the outcome, but do not give a good
indication of what is or will be going on in the organization. Measures of customer satisfaction,
growth and retention is the current indicator of company performance, and internal
operations(efficiency, speed, reducing non-value added work, minimizing quality problems) and
human resource systems and development are leading indicators of company performance.
Finding the causes(drivers) of success
Once the company mission, strategy and measures have been defined and agreed upon, the next
step is to understand fully the drivers(causes) behind movement (up and down) of your balanced
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scorecard. Without the specific knowledge of what drivers will affect your scorecard, your
organization just might spend much time, money and effort and achieve very little.
These drivers fall into four categories:
a) Environmental - those factors outside the influence of your organization, such as
governmental regulations, the economic cycle, local, national and global politics, etc.
b) Organizational - systems inside the organization such as company strategy, human
resource systems, policies, procedures, organizational structure, pay, etc.
c) Group or departmental - work processes, group relationships, work responsibilities, work
assignments
d) Individual - personality, management style, skills, behaviors.
Creating SMART targets

After a full understanding the relationships among the drivers and between the drivers and
measures is reached, the next step is to create a SMART target or objective. A SMART target is:
Specific
Measurable
Agreed upon
Realistic &
Time-bound
The equation
I look at the successful implementation of the Balanced Scorecard (BSC) as an equation:
Success = Measurement X Technique X Control X Focused Persistence X Consensus
In conclusion
Keeping in mind these factors when implementing the balanced scorecard will substantially
increase your chances of success.
RE-ENGINEERING:
The fundamental rethinking radical design of business processes to achieve dramatic
improvements in critical contemporary measures of performance such as cost, quality, service
and speed.
Authors Hammer and Champy define reengineering as “the fundamental rethinking and radical
redesign of the business process to achieve dramatic improvements in critical, contemporary
measures of performance, such as cost, quality, service, and speed.” According to Hammer and
Champy, reengineering focuses on visualizing and streamlining any or all “business processes”
in the organization, which they define as a “collection of activities that take one or more kinds of
input and create an output that is of value to the customer.”
Reengineering seeks to make such processes more efficiently by combining, eliminating or
restructuring activities without regard to present hierarchical or control procedures.
Reengineering raises a major ethical issue for OD and human resources management and
development professionals if it results in large layoffs.
Reengineering seeks to enhance:

Delivery of a product without compromising its quality by improving utilization of materials,
labour and equipment.
Reengineering focuses on making improvements in all dimension of service organization- Hum
an dimension work process dimension and ethnological dimension.
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Hammer- States that “Reengineering strives to break away from the old rules about how we
organize and conduct business. It involves recognizing and rejecting some of them and finding
imaginative new ways to accomplish work.
Why re-engineering:
BPR, PR, OR Reengineering is focused on ‘BREAKTHROUGH’ IMPROVEMENTS to
dramatically improve the quality and speed of work and to reduce its cost by fundamentally
changing the process by which work gets done.
When to re-engineer:
The normal symptoms that signal Re-Engineering
It takes too long for an organization to move its products from conception to the market place as
compared to its competitors.
The budgeting process may be too complex.
The services provided by the organization are not compatible with its customers’ needs.
Principles of re-engineering:
a) Strategic redesign of process (business process)
b) Involvement of right teams of people.
c) Wise use of information technology
d) Changed management style
e) Continuous improvement of processes. Strategic business processes: order processing
logistics, manufacturing systems, Procurement and supplies cash flow management a/c.
PRINCIPLES OF RE ENGINEERING- BY HAMMER-THE RULES ARE:

Rule 1: Organizes around outcomes, not tasks:
Combine operations into a single job.
New job to involve all the steps in a process for well defined outcome.
Organizing around outcomes resulting in greater speed, productivity and customer
responsiveness.
Rule 2: Have those who use the output of the process perform the process.-work to be carried
out where it is.
Rule 3: Merge information processing work into the real work that produces the information:
Persons who collect information be responsible for processing to reduce errors-by avoiding
eternal source for process.
Rule 4: Treat geographically dispersed resources as though they work centralized.
Centralized databases telecommunication networks to link separate units with economy
of scale while maintaining individuals flexibility and responsiveness to customers.
Rule 5: Link parallel activities instead of integrating their results.
To avoid high costs and delays. Parallel activities should be linked continuously and coordinated
during the process.
Rule 6: Put the decision point where the work is performed and build control into process –
decision – making should be made part of the work performed controls are to be made part of the
process.
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Rule 7: Capture information once – at the source and to avoid erroneous data entries and costly
re-entries.
Major steps a company should embark to redesign process are:

According to hammer,
a) Develop business vision and process objectives: - Priorities objectives and set targets
for future arrive ideal of process involves identifying.
b) Identify processes to be redesigns:- Involves identifying critical or bottleneck
processes and envisaging steps to avert shortcoming in them.
c) Understand and measure existing processes:- This involves identifying current
problems and setting a base lines.
d) Identify information technology levels:- This involves brining those involved in the
process to bargain storming session to identify new approaches.
e) Designing and build a proto type of the process:- This includes organizational and
technical aspects.
The Three R’s of Reengineering:-

Jansen- Every reengineering effort involves three phases.
a) Rethink:- Examine organization’s current objectives and how examine critical success
factors- those areas where the organization I having an edge over competitors and
whether they contribute towards customer satisfaction.
b) Redesign:- Analysis to the way products and services are produced. How well they are
structured who accomplishes what tasks? Results of procedure. To determine which
element should be redesigned to make jobs more satisfying and more customer focused.
c) Retool:- A thorough evaluation of current use of advanced technologies, especially
electronic data processing systems, towards improving quality of services and customer
satisfaction.
DOWNSIZING AND OUTSOURCING:

Downsizing is reducing the number of employees on the operational payroll. Some users
distinguish from a layoff with downsizing intended to be a permanent downscaling and a layoff
intended to be a temporary downscaling in which employees may later be hired. Business
organizations uses several techniques in downsizing including providing incentives to take early
retirement and transfer to subsidiary company’s but the most common technique is to simply
terminate the employment of a certain number of people.
Outsourcing refers to the process of sub-contracting to a third-party. It is contracting with
another company a person to do a particular function.
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MODULE 8
The Future and OD: The changing environment, Fundamental strengths of OD, Implications of
OD for the client, ethical standards in OD, OD’s future, OD Consultant’s role, issues in
consultant-client relationship, Power, Politics & OD, Research on OD
THEN CHANGING ENVIRONMENT

a) The environment in which organizations operate is increasingly turbulent in an era of
global, national and regional commercial competitiveness.
b) Alliance, consortia, mergers and acquisitions are all common.
c) Furthermore dislocation of people through downsizing and restructuring is rampant.
d) The new paradigm proclaims that the most innovative and successful organizations will
be those that derive their strength and vitality from adaptable committed team players at
all levels and from all specialties not from the omniscience of the hierarchy.
e) Increasingly organizations will be flatter with smaller central staffs and with more
delegation to small groups and units.
f) Companies are increasingly emphasizing on introducing planned interventions which
would ultimately lead to achieving strategic goals.
g) OD will be a major player in assisting organizations to shift to and sustain this new
paradigm and to help invent even more effective paradigms in the future.
h) The future of OD is bright but only if the field continues to evolve.
FUNDAMENTAL STRENGTHS OF OD
a) The central strength of OD are the processes of organisational improvement. These
processes include careful tuning in to the perceptions and feelings of people, creating safe
conditions for surfacing perceptions and feelings involving people in diagnosing the
strengths and weaknesses of their organizations and making action plans for
improvement, focusing on team and other interdependent configurations redesigning
work so that it is more meaningful and motivating, explicitly training people toward a
participative open team leadership model and using qualified third parties. These and
other characteristics of OD have created a powerful and durable process for
organisational improvement.
b) The second fundamental strength has to do with the political, government milieu. OD is
highly compatible with democratic governmental structures and processes that are well
established in many parts of the world and merging elsewhere. Indeed approaches
promote and help sustain democratic processes.
c) Third, OD practice has been expanding in the last two or three decades to create a
blending of attention to people oriented processes with attention to the design of the
human-technical system
d) Fourth almost everywhere organisations are recognizing the need for assistance in getting
the right people together to talk constructively about important organisational and
transorganisational matters and for developing processes for making things better. In light
of these pressing needs, the od field clearly has an enormous and vital role to play in the
foreseeable future.
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IMPLICATIONS OF OD FOR THE CLIENT

An OD effort has some fundamental implications for the chief executive officer and top
managers of an organization and we believe that these implications need to be shared and
understood at the outset.
a) To enlarge the database for making management decisions in particular, the expertise,
perceptions and sentiments of team members throughout the organization are more
extensively considered then heretofore.
b) To expand the influence processes. The OD process tends to further a process of mutual
influence managers and subordinates alike tend to be influential in ways they have not
experienced previously.
c) To capitalize on the strengths of the informal system and to make the formal and the
informal system more congruent. A great deal of information that has previously been
suppressed within individuals or within the informal system ( eg: appreciations,
frustrations, hurts, opinions about hoe to do things more effectively, fears) begins to be
surfaced and dealt with. Energies spent suppressing matters can now be rechanneled into
cooperative effort.
d) To become more responsive. Management must now respond to data hat have been
submerged and must begin to move in the direction of personal, team, and organizational
effectiveness suggested by the data.
e) To legitimatize conflict as an area of collaborative management. Rather than using win-
lose, smoothing, or withdrawal modes of conflict resolution, the mode gradually becomes
one of confronting the underlying basic for the conflict and working the problem through
to a successful resolution.
f) To examine its own leadership style and ways of managing. We do not think an OD
effort can be viable long if the top management team (the CEO plus subordinate team or
the top team of an essentially autonomous unit) does not actively participate in the effort.
The top team inevitably is a powerful determinant of organizational culture. OD is not a
televised game being played for viewing by top management members of top
management are the key players.
g) To legitimatize and encourage the collaborative management of team, inter team, and
organization cultures. This broad intervention goal is largely the essence of OD.
The world, for O.D. consultants, is getting smaller. This global shrinkage is not due to changes in
the planet's geophysical properties, nor is it related to anything O.D., as a professional field, has
done. Rather, O.D.'s world is getting smaller because the clients make it so. Even small
companies are establishing multinational operations, partnerships, and other such linkages.
When the client goes global, the O.D. consultant must follow. Naturally, operating at the
multinational level requires a greatly expanded skill and knowledge set. The global O.D.
consultant must possess detailed understanding of the vast diversity of cultures (both between
and within the nations), knowledge of the nations' economic models and variables, the quality of
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the commercial infrastructures, and the specific laws which dictate how businesses must operate.
It is also important to note that simple knowledge of all these factors is not enough. The global
consultant must be able to use the knowledge in the design and implementation of any
interventions.
ETHICAL STANDARDS IN OD
Ethical Guidelines for O.D. Professionals
A) Responsibility to Self
a) Act with integrity; be authentic and true to self
b) Strive continually for self-knowledge and personal growth
c) Recognize personal needs and desires and, when they conflict with other responsibilities,
seek all-win resolutions of those conflicts.
d) Assert own economic and financial interests in ways that are fair and equitable to me as
well as to my clients and their stakeholders.
B) Responsibility for Professional Development and Competence

a) Accept responsibility for the consequences of any acts and make reasonable efforts to
ensure that services are properly used; terminate services if they are not properly used
and do what I can see that any abuses are corrected.
b) Strive to achieve and maintain a professional level of competence for both self and
profession by developing the full range of own competence and by establishing collegial
and cooperative relations with other O.D. professionals.
c) Recognize own personal needs and desires and deal with them responsibly in the
performance of professional roles.
d) Practice within the limits of competence, culture, and experience in providing services
and using techniques.
e) Practice in cultures different from own only with consultation from people native to or
knowledgeable about those specific cultures.
C) Responsibility to Clients and Significant Others

a) Serve the long-term well-being, interests and development of the client system and all its
stakeholders, even when the work being done has a short-term focus.
b) Conduct any professional activity, program or relationship in ways that are honest,
responsible, and appropriately open.
c) Establish mutual agreement on a contract covering services and remuneration.
d) Deal with conflicts constructively and avoid conflicts of interest as much as possible.
e) Define and protect the confidentiality of client-professional relationships.
f) Make public statements of all kinds accurately, including promotion and advertising, and
give service as advertised.
D) Responsibility to the Profession

a) Contribute to continuing professional development for self, other practitioners, and the
profession.
b) Promote the sharing of O.D. knowledge and skill.
c) Work with other O.D. professionals in ways that exemplary what our profession says we
stand for.
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d) Work actively for ethical practice by individuals and organizations engaged in O.D.
activities and, in case of questionable practice, use appropriate channels for dealing with
it.
e) Act in ways that bring credit to the O.D. profession and with due regard for colleagues in
other professions.
E) Social Responsibility
a) Act with sensitivity to the fact that recommendations and actions may alter the lives and
well-being of people within client systems and the larger systems of which they are
subsystems.
b) Act with awareness of the cultural filters which affect view of the world, respect cultures
different from own, and be sensitive to cross-cultural and multicultural differences and
their implications.
c) Promote justice and serve the well-being of all life on Earth.
OD’S FUTURE
OD has a great role to play. Because of its versatility and its usefulness.How large a role OD will
play in the constantly changing organizational, political, and economic milieu of the future will
depend upon a number of interrelated conditions. Most of the conditions we see are generally
favorable to OD, but countertrends and/or uncertainties will have to be addressed.
Leadership and values
For OD to flourish top management and OD consultants must place high value on strong
individual team and organisational performance coupled with people oriented values. as O Toole
says management can choose to try to create organisation that have both profitability and
humanistic/developmental objectives whether or not the two are necessarily correlated. In an
almost schizophrenic situation in the United States some top managements are highly attentive
and committed to this duality of objectives and others are concerned only with the bottom line or
the price of stock.
OD training
We would argue that the future will hold a need for availability of T-group training as a training
intervention not as an organisational intervention particularly for both aspiring OD practitioners
and managers. And we should not overlook the utility of T-group training for any or all
organisational members including first line supervisors. Accreditation and peer review of OD
skill competency has languished. Therefore, it is very important.
Interdisciplinary nature of OD
OD’s future to a significant extent is related to other disciplines. It has been built from theory,
research, and practice in social psychology, adult education, community development, general
systems theory, family group therapy, anthropology, philosophy, counseling, psychiatry, general
management, social work, HRM and other fields.
Surely much can be learned from such fields as international diplomacy, dispute meditation,
arbitration, architecture and religion. Historically some reciprocal influence has passed between
these fields and OD.
Diffusion of technique
OD technique and approaches have been widely disseminated in society, at least on the It is also
a compliment to the professionals of the field, including OD trainers, researchers and writers.
SJBIT/MBA Page 135
However atleast two problems may be lurking around the edges of this wide dissemination of
technique. One problem is that techniques may be used without sufficient understanding of their
theoretical research and historical foundations. The consequences may be misapplication and in
turn, unnecessary cynicism and resistance on the part of client.
The other problem is the possibility of a gradual diffusion of the OD field across other
specialties, with the resultant loss of some of its integration of values, theory, research, history
and practice.
Another partial solution may involve widespread understanding of the processes, so that
participants themselves act as a check on misdirected or ill-considered efforts. The less mystery
and the more openness and understanding about OD, the better.
Integrative practice
OD practitioners need to be as knowledgeable as possible about such structural interventions and
these integrations. At the same time, we believe that experts in the technological aspects of these
fields also need to be knowledgeable about OD. And ideal arrangement may be for OD
professionals to join with such experts on consulting teams. This collaboration is happening,
although just how extensively we do not know. Obviously it requires that such teams pay
considerable attention to their own team building and teamwork. In short OD field is closer to
the refinement of such a paradigm, but the journey must continue.
Mergers, acquisition and alliance
As the tempo of business transactions worldwide increases, the phenomena of acquisitions,
mergers and alliances will also become more evident, interventions that have grown out of the
OD field can be highly relevant in helping two or more organisational cultures meld and in
ameliorating the potential dislocation and pain that can occur when organisation are combined.
Such interventions will require a high degree of interpersonal, political and cultural skill of the
consultant or consulting team even more so when than one country and or language is involved.
Rediscovering and recording history
The history of OD is indispensable for retaining and improving effective OD interventions and
approaches. Some portions of OD history are in danger of being lost forever, although some are
likely to be reinvented from time to time. We are convinced that hundreds of interventions
devised by OD consultants have been tremendously successful in particular applications and
used perhaps two or three times again but never recorded and published. Focusing on the broad
fundamental participant action research process is of overriding importance but nevertheless
intervention techniques are extremely important for the OD professional’s tool kit.
The search for community
Finally we believe that the search for community will be increasingly high on the agenda’s of
organisation and OD efforts in the future either explicitly or implicitly.
No one should be surprised to see that OD interventions take people toward a sense of
community because the values underlying OD stem largely from what people have said over and
over again in private interviews and safe group settings as to what they want from their
organisations and from other people. And desire for a sense of community is evident in
organisations as diverse as manufacturing firms, insurance companies, schools, churches,
government units, the military, private clubs and charitable institutions.
High performance and community
High organisational performance can be congruent with and supportive of a sense of community
and vice versa. Obviously it requires vision, time, empathy, skill, commitment and hard work to
achieve either or both. An assessment of where a group or various units of an organisation are on
SJBIT/MBA Page 136
each of the dimensions in the preceding list and then moving on to ask where do you want to be?
We believe future OD efforts increasingly will be aimed at both high organisational performance
and a sense of community in many ways the pioneers and major thinkers in the field have been
saying this same thing all along.
THE NATURE OF THE CONSULTANTS EXPERTISE:

Partly because of the unfamiliarity with organization development methods, clients frequently try
to put the consultant in the role of the expert on substantive content, such as on personnel policy
or business strategy. We believe it is possible, and desirable, for the OD consultant to be an
expert in the sense of being competent to present a range of options open to the client, but any
extensive reliance on the traditional mode of consulting, that is, giving substantive advice, will
tend to negate the OD consultant’s effectiveness. The OD consultant needs resist the temptation
of playing the content expert and will need to clarify his or her role with the client when it
becomes an issue. However, we think the OD consultant should be prepared to describe in broad
outline what the organization might look like if it were to go very far with an OD effort. Further,
as we will discuss later, central to his or her role, the OD consultant must be an expert process.
The expert role creates a kind of dependency that typically does not lead to internal skill
development.
The second reason is that the expert role almost inevitably requires the consultant to defend his
or her recommendations.
A third reason for largely avoiding the expert role has to do with trust.
A fourth reason has to do with expectations. If the consultant goes very far in the direction of
being an expert on substance in contrast to process, the client is likely to expect more and more
substantive recommendations, thus negating the OD consultant’s central mission which is to help
with process.
THE CONSULTANT AS A MODEL:

Another important issue is whether change agents are willing and able to practice what they
preach. In the area of feelings, for example, the consultant may bee advocating a more open
system in which feelings are considered legitimate and their expression important to effective
problem solving and at the same time suppressing his or her own feelings about what is
happening in the client system.
As another example of modeling behavior, the OD consultant needs to give out clear message-
that is, the consultants words and apparent feelings need to be congruent. The consultant also
needs to check on meaning, to suggest optional methods of solving problems, to encourage and
support, to give feedback in constructive ways and to accept feedback, to help formulate issues,
and to provide a spirit of inquiry. It is not that the OD consultant must be a paragon of virtue;
rather we are suggesting that to maximize one’s effectiveness, one must continuously practice
and develop the effective behaviors one wishes to instill in the client system.
ISSUES IN CONSULTANT-CLIENT RELATIONSHIP:

A number of interrelated issues can arise in consultant-client relationships in OD activities, and
they need to be managed appropriately if adverse effects are to be avoided. These issues tend to
center on the following important areas:
a) Entry and contracting:
b) Defining the client system:
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c) Trust:
A good deal of the interaction in early contacts between client consultant is implicitly related to
developing a relationship of mutual trust. Confidentiality must be maintained if trust is to be
maintained. Even unintentional errors can be disastrous to the consultant-client relationship.
d) The nature of the consultant’s expertise:
e) Diagnosis and appropriate interventions:
f) The depth of interventions on being absorbed by the culture:
A major aspect of selecting appropriate interventions is the matter of depth of intervention. In
Roger Harrisons depth of intervention can be assessed using the concepts of accessibility and
individuality. By accessing Harrison means the degree to which the data are more or less public
versus being hidden or private and the ease with which the intervention skills can be learned.
Individuality means the closeness to the persons perceptions of self and the degree to which the
effects of the intervention are in the individual in contrast to the organization. It requires a
careful diagnosis to determine whether these interventions are appropriate and relevant. If they
are inappropriate they may be destructive, unacceptable to the client and the system. To
minimize these risks, Harrison suggests two criteria for determining the appropriate depth of
intervention. First to intervene at a level no deeper than that required to produce enduring
solutions to the problems at hand, and second to intervene at a level no deeper than that at which
the energy and resources of the client can be committed to problem solving and to change.
g) The consultant as a model:
h) The consultant team as a microcosm:
The consultant–key client viewed as a team, or consultants working as a team, can profitably be
viewed as a microcosm of the organization they are trying to create.
In the first place the consultant team must set an example of an effective unit in order to enhance
its credibility.
Secondly the practitioners need the effectiveness that comes from continuous growth and
renewal process.
And third, the quality of the interrelationship.
i) Action research and the OD process:
j) Client dependency and terminating the relationship:
k) Ethical standards in OD, Implications of OD for the client.
POWER, POLITICS, AND ORGANISATIONAL DEVELOPMENT

Power and politics, indisputable facts of organizational life, must be understood if one is to be
effective in organizations. The OD practitioner needs both knowledge and skill in the arenas of
organizational power and politics. As Warner burke observes: “OD signifies change, and for
change to occur in an organization, power must be exercised.”
“Power is the intentional influence over the beliefs, emotions and behaviors of people. Potential
power is the capacity to do so, but kinetic power is the act of doing so… one person experts
power over another to the degree that he is able to exact compliance as desired.
The Nature of OD in Relation to Power and Politics.
OD was founded on the belief that using behavioral science methods to increase collaborative
problem solving would increase both organizational effectiveness and individual well being. This
belief gave rise to the field and is a guiding premise behind its technology. To increase
collaborative problems solving is to increase the positive face of power and decrease the negative
face of power. Thus from its inception OD addressed issues of power and politics by proposing
SJBIT/MBA Page 138
that collaboration, co-operation, and joint problems solving are better ways to get things done in
organizations than relying solely on bargaining and politics. The nature of OD in relation to
power and politics can be examined from several perspective-its strategy of change, its
interventions its values and the role of the OD practitioner.
Virtually all OD interventions promote problem solving, not politics, as a preferred way to get
things accomplished. OD interventions increase problem solving, collaboration, cooperation,
fact-finding, and effective pursuit of goals while decreasing reliance on the negative faces of
power and politics.
RESEARCH ON ORGANIZATION DEVELOPMENT:

There have been significant research developments in OD. More rigorous research designs have
been employed to evaluate interventions, both positive and negative outcomes have been
observed. There is clear evidence that better understanding of measurement errors is being
obtained. Advances in measurement techniques and valid measurement instruments have also
contributed to better research on OD.
Positive developments include:
Better theories, improved study designs, improved measurement, better statistical methods, and
good use of meta-analytical techniques. There was a shift away from research on social factors
such as interpersonal relations, management, values, norms, and so on, toward research on
organizing arrangements such as organization structure, strategies, administrative systems, and
so on. This shift represents a move toward examining organization-level issues, that is, a look at
how systems change as result of OD efforts.
Porras and Robertson related or mapped various interventions to organization variables. Ex: team
building should impact social factors, parallel learning structures and quality circles should
impact organization arrangements. The research studies of different interventions were examined
to see whether they changed the work setting which changed the work setting, which changed
individual cognitions, which changed on the job behaviors, which led to the outcomes of
organizational performance and individual development. The results were complicated and
mixed, but moderately supportive, especially for such an ambitious undertaking. And
interventions related to organizing arrangements and social factors appeared to have a positive
impact on organizational performance. This example and many others demonstrate that
significant advances are being made in research on OD.
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Organization Design and Development‐10MBAHR341

HUMAN RESOURCE AREA

DETERMINANTS OF ORGANIZATION DESIGN:

Organizational design is engaged when managers develop or change an organization's structure.

There are five common forms of departmentalization:

1. Functional Departmentalization. As shown in the Figure 2-1, it groups jobs by

Figure 2-1Functional Departmentalization example

Different aspects on this type of departmentalization:

Positive Aspects Negative Aspects

2. Product Departmentalization. It groups jobs by product line. Each manager is

Figure 2: Product Departmentalization example

Different aspects on this type of departmentalization:

Positive Aspects Negative Aspects

particular products and o Limited view of

3. Geographical Departmentalization. It groups jobs on the basis of territory or

Figure 2-3: Geographical Departmentalization example

Different aspects on this type of departmentalization:

Positive Aspects Negative Aspects

4. Process Departmentalization. It groups on the basis of product or customer flow.

Figure 2-4: Process Departmentalization example

Different aspects on this type of departmentalization:

Positive Aspects Negative Aspects

5. Customer Departmentalization. It groups jobs on the basis of common customers

Figure 2-5: Customer Departmentalization example

Different aspects on this type of departmentalization:

Positive Aspects Negative Aspects

III. Chain of command

IV. Span of Control

V. Centralization and Decentralization

More Centralization More Decentralization

COMPONENTS OF ORGANISATION DESIGN:

FACTORS INFLUENCING / (DETERMINING SPAN OF CONTROL)

ADVANTAGES OF LARGE SPAN OF CONTROL

LINE AND STAFF RELATIONSHIPS:

c) Consulting authority – Line managers must consult staff in that area.

Tall Organization Structure Flat Organizational Structure

There can be various reasons for an organization to introduce formalization:

Relative Advantages and Disadvantages of Centralization and Decentralization

Uniformity of policies, standards and Greater flexibility and appropriateness in

Enables closer control and coordination. Allows top management to focus on

Maximizes economies of scale; Facilitates intra-unit communication.

Reduces risk-factor in decision making Increases morale and commitment.

Inappropriate response to local Loss of economies of scales; duplication

IMPORTANCE OF SOUND ORGANISATION

i) Division of work: Specialization-individuals to develop better capabilities and better

EVOLUTION OF ORGANIZATION THEORY:

EVOLUTION OF ORGANISATION THEORY

HENRY FAYOL and Principles of Organization:

j) Order People & Material.

MAX WEBER AND BUREAUCRACY

RALPH DAVIS & RATIONAL PLANNING

EVOLUTION OF ORGANISATION THEORY

ELTON MAYO AND HAWTHORNE STUDIES:

CHESTER BARNARD AND CO-OPERATIVE SYSTEM:

DOUGLAS MCGREGOR AND THEORY -X AND THEORY- Y:

Under Theory X, four assumptions are held by managers:

WARREN BENNIS BUREAUCRACY:

EVOLUTION OF ORGANIZATION THEORY

HERBERT SIMON AND PRINCIPLES OF BAKLASH

KATZ KAHN’S ENVIRONMENTAL PERSPECTIVE:

CASE FOR TECHNOLOGY:

Research in 1960s –Joan Woodward, Charles Perrrow, as with environment no contemporary