Mgt 3102

MODULE 5 – DESIGNING INTERVENTIONS AND MANAGING CHANGE (Ch 9-10)

A. DESIGNING INTERVENTIONS (Ch 9)

What is an OD Intervention?
An intervention – is a set of sequenced planned actions or events intended to help the organization increase its
effectiveness. Interventions purposely disrupt the status quo. They are deliberate attempts to change an organization or
subunit toward a different and more effective state.
 Set of activities in which selected organizational units (target groups or individuals) engage with a task or a sequence
of tasks where the task goals are related directly or indirectly to organizational improvement. (French and Bell)

What are Effective Interventions?

In OD, three major criteria define an effective intervention:

1. The extent to which it fits the needs of the organization;
 This criterion concerns the extent to which the intervention is relevant to the organization and its members.
 Effective interventions are based on valid information about the organization’s functioning; they provide
opportunities to make free and informed choices; and they gain members’ internal commitment to those
choices.
2. The degree to which it is based on causal knowledge of intended outcomes; and
 Interventions must be based on valid knowledge that those outcomes actually can be produced.
3. The extent to which it transfers change management competence to organization members.
 An effective intervention enhances the organization’s capacity to manage change. Following an intervention,
organization members should be better able to carry out the change activities on their own.

How to Design Effective Interventions

Designing interventions requires careful attention to the needs and dynamics of the change situation and crafting a change
program that will be consistent with the previously described criteria of effective interventions. There is no precise
information or research about how to design interventions but only general prescriptions for change. The design of an
intervention will depend to some extent on the expertise of the practitioner.

Contingencies that can Affect Intervention Success

Two major sets of contingencies that can affect intervention success have been published:
1. Contingencies Related to Change Situation
A. Readiness for change – Indicators for readiness for change include sensitivity to pressures for change,
dissatisfaction with the status quo, availability of resources to support change, and commitment of significant
management time.
B. Capability to change – include knowledge and skills present in the organization, the resources and systems
devoted to change, and the organization’s experience with change.
C. Cultural context – The national culture can exert a powerful influence on members’ reaction to change; so
intervention design must account for the cultural values and assumptions held by organization members.
D. Capabilities of the change agent – OD practitioners should assess their experience and expertise against the
requirements needed to implement the intervention effectively.
2. Contingencies Related to the Target of Change
 Organizational issues – there are four interrelated issues that are key targets of OD interventions:
1) Strategic issues – deciding that products or services, markets, and how to relate to their environment
2) Technological and structural issues – decisions on how to divide work into departments and then how to
coordinate among those departments to support strategic directions.
3) Human resources issues – concerned with attracting competent people, setting goals for them, appraising
and rewarding their performance, and ensuring that they develop their careers and manage stress.
4) Human process issues – social processes issues: communication, decision making, leadership, group
dynamics
 Organizational levels – individual, group, organization, and transorganization.

Overview of Interventions

The following are major organization change methods used in OD today (Cummings and Worley).

HUMAN PROCESS INTERVENTIONS – focusing on people within organizations and the processes through which they
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accomplish organizational goals.
A. Interventions related to relationship and group dynamics
1. Process consultation  Focuses on interpersonal relationships and social dynamics occurring in work
2. Third-party intervention groups.
3. Team building  A form of process consultation aimed at dysfunctional interpersonal relations in
organization.
 Helps work groups become more effective in accomplishing tasks
B. Intervention for the total organization or an entire department or relations between groups
4. Organization confrontation meeting  Mobilizes organization members to identify problems, set action targets, and
5. Intergroup relations begin working on problems.
6. Large-group interventions  Designed to improve interactions among different groups or departments in
organizations.
 Involved getting a broad variety of stakeholders into a large meeting to clarify
important values, to develop new ways of working, to articulate a new vision for
the organization, or to solve pressing organizational problems.

TECHNOSTRUCTURAL INTERVENTIONS – focusing on an organization’s technology and structure.

1. Structural design  Concerns the organization’s division of labor—how to specialize task
2. Downsizing performances.
3. Reengineering  Decreasing the size of the firm through personnel layoffs, organization redesign,
4. High-involvement organizations and outsourcing.
5. Work design  Radically redesigns the organization’s core work processes to create tighter
linkage & coordination.
 Aimed at improving employee well-being and organizational effectiveness.

 Concerned with designing work for work groups and individual jobs.

HUMAN RESOURCES MANAGEMENT INTERVENTIONS – interventions used to develop, integrate, and support
people in organizations.
A. Performance management
1. Goal setting  Involves setting clear and challenging goals
2. Performance appraisal  Jointly assessing work-related achievements, strengths, and weaknesses.
3. Reward systems  Designing organizational rewards to improve employee satisfaction and
performance
B. Developing organization talent
1. Coaching and mentoring  Helps managers and executives to clarify their goals, deal with potential stumbling
blocks and improve their performance.
2. Career planning and development  Helps people choose organizations and career paths and attain career objectives.
interventions
3. Management and leadership  Building the competencies needed to lead the organization in the future and
includes additional classroom lectures as well as simulations, action learning, and
case studies.
C. Supporting organization members
4. Managing workforce diversity  Makes human resources practices more responsible to a variety of individual
5. Employee stress and wellness needs.
 Include employee assistance programs (EAPs) and stress management.

STRATEGIC INTERVENTIONS – interventions that link the internal functioning of an organization to the larger
environment and transform the organization to keep pace with changing conditions.
A. Transforming organizations
1. Integrated strategic change  Changing business strategies and organizational systems together in response to
external and internal disruptions.
2. Organization design  Addresses the organization’s architecture, or the extent to which structure, work
design, human resource practices, and management and information systems are
aligned and support each other.
3. Culture change  Helps organizations develop cultures (behaviors, values, beliefs, and norms)
appropriate to their strategies and environments.
B. Collaborative strategies
4) Mergers and acquisitions  Assisting two or more organization to form a new entity.
5) Alliances  Helps two or more organizations pursue a set of private and common goals
through the sharing of resources (intellectual property, people, capital,
6) Networks technology, capabilities, or physical assets).
 Helps develop relationships among three or more organizations to perform tasks
or solve problems that are too complex for single organizations to resolve.
C. Continuous change
7) Self-designing organizations  Helps organizations gain the capacity to alter themselves fundamentally.
8) Organization learning(OL) and knowledge  Enhancing the organization’s capability to acquire and develop new knowledge
management (KM) (OL), and using that knowledge to improve organization performance (KM).
9) Built to  Assumes that the source of effectiveness is the ability to change continuously.
change organizations

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B. LEADING AND MANAGING CHANGE (Ch 10)

Figure 5.1 Activities Contributing to Effective Change Management

MOTIVATING CHANGE
Creating Readiness for Change
Overcoming Resistance to Change

CREATING A VISION
Describing the Core Ideology
Constructing the Envisioned Future

DEVELOPING POLITICAL SUPPORT

EFFECTIVE
Assessing Change Agent Power
Identifying Key Stakeholders
Influencing Stakeholders
CHANGE
MANAGING THE TRANSITION
Activity Planning
Commitment Planning MANAGEMENT
Management Structure

SUSTAINING MOMENTUM
Providing Resources for Change
Building a Support System for Change Agents
Developing New Competencies and Skills
Reinforcing New Behaviors
Staying the Course

Five Major Activities for Managing Change

After diagnosis reveals the causes of problems or identifies opportunities for development, planning begins and
subsequently leading and implementing the changes necessary to improve organization effectiveness and performance.

1. Motivating Change – the issue of how to motivate commitment of people to organization change. This requires
attention to two related tasks: creating readiness for change and overcoming resistance to change.
1. Creating readiness for change – creating an environment in which people accept the need for change and
commit physical and psychological energy to it.
a. Sensitize the organizations to pressures for change
b. Identify gaps between current and desired states
c. Convey credible positive expectations for the change.
2. Overcoming Resistance to Change
a. Provide empathy and support
b. Communicate
c. Involve members in planning and decision making (participation and involvement)

B. Creating a Vision – involves creating a vision of what members want the organization to look like or become.
1. Describing the core ideology – What are the core values that inform members of what is important in the
organization? Core values typically include three to five basic principles or beliefs that have stood the test of time
and best represent what the organization stands for.
2. Constructing the envisioned future – What is the organization’s core purposes or reason for being? The
envisioned future is specific to the change project at hand and must be created and includes the following
elements:
a. What are the bold and valued outcomes?
b. What is the desired future state?

C. Developing Political Support – Organizations are composed of powerful individuals and groups that can either block
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 or promote change, and leaders and change agents need to gain their support to implement changes. Managing the
political dynamics of change includes the following activities:
1. Assessing change agent power – Change agent’s asses their own power base
to determine how to use it to influence others to support changes and identify areas in which they need to enhance
their sources of power.
2. Identifying key stakeholders –Change agents should also identify powerful
individuals and groups with an interest in the changes, such as staff groups, unions, department managers, and
top-level executives. These key stakeholders can thwart or support change and it is important to gain broad-based
support to minimize the risk that a single interest group will block the changes.
3. Influencing stakeholders – gaining the support of key stakeholders to
motivate a critical mass for change. There are three major strategies for using power to influence others in OD:
playing it straight, using social networks, and going the formal system. These strategies are linked to the
individual sources of power (Fig. 5.2).

Figure 5.2 Sources of Power and Power Strategies

Individual Sources of Power Power Strategies

Knowledge Playing it Straight

Others’ Support Using Social Networks

Personality Going Around the Formal System

D. Managing the Transition – Implementing organization change involves moving from the existing organization state
to the desired future state. Such movement does not occur immediately; it required a transition state during which the
organization learns how to implement the conditions needed to reach the desired future. Three major activities and
structures to facilitate organizational transition are as follows:
1. Activity planning – involves making a road-map for change, citing specific activities and events that must occur
if the transition is to be successful.
2. Commitment planning –involves identifying key people and groups whose commitment is needed for change to
occur and formulating a strategy for gaining their support.
3. Change-management structures – Because organizational transition tend to be ambiguous and need direction,
special structures for managing change process need to be created.

E. Sustaining Momentum – Once organizational changes are under way, explicit attention must be directed to
sustaining energy and commitment for implementing them.
1. Providing resources for change – requires additional financial and human resources
2. Building a support system for change agents – for mutual learning and emotional support
3. Developing new competencies and skills – Organizational changes frequently demand new knowledge, skills,
and behaviors from organization members.
4. Reinforcing new behaviors – to reinforce the kinds of behaviors needed to implement the changes by linking
formal rewards directly to the desired behaviors.
5. Staying the course – making a steady focus on change implementation.

Module 6 - EVALUATING AND INSTITUTIONALIZING OD INTERVENTIONS

Evaluation – is concerned with providing feedback to practitioners and organization members about the progress and
impact of interventions. This information will determine the need for further diagnosis and modification of the change
program, or it may show that the intervention is successful.

Institutionalization – is process of maintaining a particular change for an appropriate period of time. It ensures that the
results of successful change program persist over time.

Evaluation processes consider both the implementation success of the intended intervention and the long-term results it
produces.

EVALUATING OD INTERVENTIONS
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 Involves judgments about whether an intervention has been implemented as intended and, if so, whether is having
desired results.
 Managers investing resources in OD efforts are being held accountable for results—being asked to justify the
expenditures in terms hard, bottom-line outcomes.
 Managers requires rigorous assessment of interventions and are using the results to make important resource allocation
decision about OD, such as whether to continue to support the change program, to modify or alter it, or to terminate it
and try something else.
 There are two distinct types of OD evaluation: one intended to guide the implementation of interventions, and another
to assess their overall impact.

Implementation and evaluation feedback

Evaluation should be viewed to include both during-implementation assessments about if and how well changes are
actually implemented and after-implementation evaluation of whether they are producing expected results.
 Implementation feedback – evaluation aimed at guiding implementation.
 Evaluation feedback – assessment intended to discover intervention outcomes.

Figure 6.1 Implementation and Evaluation Feedback

Diagnosis

Implementation of Intervention Implementation Evaluation

Feedback Feedback

Design and Clarification of Development of Measures of Measures of

Implementation Intervention Plan for Next Features of the Long-term Effects
of Interventions Implementation Intervention and
Immediate Effects

Alternative
Interventions

Figure 6.1 shows how the two kinds of feedback fir the diagnosis and intervention stages of OD.
 The application of OD to a particular organization starts with a thorough diagnosis of the situation which helps
identify particular organizational problems or areas for improvement.
 Mostly, the chosen intervention provides only general guidelines for organizational change, leaving managers and
employees with the task of translating the guidelines into specific behavior and procedures.
 Implementation feedback informs this process by supplying data about the different features of the intervention
itself, perceptions of the people involved, and data about the immediate effects of the intervention.
 These data provide a picture about how the intervention is progressing.
 Once implementation feedback informs the organization that the intervention is sufficiently in place and accepted,
evaluation feedback begins.
 Evaluation feedback is concerned with the overall impact of the intervention and with whether resources should
continue to be allocated to it or to other possible interventions.
 Evaluation feedback takes longer to gather and interpret since it usually include a lot of outcome measures, such
as performance, job satisfaction, productivity, and turnover.
 Negative results tell members that the initial diagnosis was seriously flawed or that the wrong intervention was
chosen. Such feedback might prompt additional diagnosis and a search for a more effective intervention.
 Positive results, tell members that the intervention produced expected outcomes and find ways to institutionalized
the changes, making them a permanent part of the organization’s normal functioning.

Two Key Aspects of Effective Evaluation

1. Measurement
Providing useful information and evaluation feedback involves two activities: selecting the appropriate variables and
designing good measures.

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Selecting Appropriate Variables
The variables measured in OD evaluation should come from the theory or conceptual model underlying the intervention.
The model should incorporate the key features of the intervention as well as its expected results.

Designing Good Measures. Good measurement methods should be 1) operationally defined, 2) reliable, and 3) valid.
Operational definition – specifies the empirical data needed, how they will be collected and, most important, how they
will be converted from data to information.

Reliability – concerns the extent to which a measure represents the “true” value of a variable, there is little doubt about the
accuracy of the number of cars leaving an assembly line as a measure of plant productivity.
Four ways OD practitioners can improve the reliability of their measures:
1) Rigorously and operationally define the chosen variables.
2) Use multiple methods to measure a particular variable. The use of questionnaires, interviews, observations and
unobtrusive measures can improve reliability and result in a more comprehensive understanding of the
organization.
3) Use multiple items to measure the same variable on a questionnaire.
4) Use standardized instruments.

Validity – concerns the extent to which a measure actually reflects the variable it is intended to reflect.
OD practitioners can increase the validity of their measures in several ways:
1) Ask colleagues and clients if a proposed measure actually represents a particular variable. This is called face
validity. Does the measure “appear” to reflect the variable of interest?
2) Content validity—if experts and clients agree that the measure reflects the variable of interest. Do “experts” agree
that the measure appears valid?
3) Use multiple measures of the same variable, as described in the section about reliability, to make preliminary
assessments of the measure’s criterion or convergent validity—that is, if several different measures of the same
variable correlate highly with each other, especially if one or more of the other measures have been validated in
prior research. Do measures of “similar” variables correlate?
4) A special case of criterion validity, called discriminant validity, exists when the proposed measure does not
correlate with measures that it is not supposed to correlate with. Do measures of “non-similar” variables show no
correlation?
5) Predictive validity is demonstrated when the variable of interest accurately forecasts another variable over time.
Does the variable of interest forecasts another variable over time?

2. Research Design

In addition to measurement, OD practitioners must also make choices about how to design the evaluation to achieve valid
results. There is internal validity when the intervention did in fact produce the observed results. There is external validity
when the intervention would work similarly in other situations. Internal validity is the essential minimum requirement for
assessing OD interventions; it is first established before external validity is achieved.
Given the problems inherent in assessing OD interventions, practitioners have turned to quasi-experimental research
designs. Quasi-experimental designs with the following features are powerful for assessing changes:
1) Longitudinal measures – involves measuring results repeatedly over relative long time periods. Data collection
should start before the change program is implemented and continue for a period considered reasonable for
producing expected results.
2) Comparison unit – it is always desirable to compare results in the intervention situation with those in another
situation where no such change has taken place.
3) Statistical analysis – Whenever possible, this should be used to rule out the possibility that the results are caused
by random error or chance. Various statistical techniques are applicable to quasi-experimental designs, and OD
practitioners should apply these methods or seek help from those who can apply them.

INSTITUTIONALIZING INTERVENTIONS

Once it is determined that changes have been implemented and are effective, attention is directed at institutionalizing the
changes—maintaining them as a normal part of the organization’s functioning for an appropriate period of time.
 In complex and uncertain environment, some changes are only part of a long journey of organization adaptation
 Innovating new products is a continuous process
 Appraising performance need to persist
 Institutionalizing an OD interventions concern refreezing. It involves the long-term persistence of organizational
changes: To the extent that changes persist, they can be said to be institutionalized.

Institutionalization framework
Figure 6.2 presents a framework that identifies organization and intervention characteristics and institutionalizing
processes affecting the degree to which change programs are institutionalized.
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Figure 6.2 Institutionalization Framework

ORGANIZATION CHARACTERISTICS
Congruence
Stability of Environment and Technology
Unionization
INSTITUTIONALIZATION PROCESS
INDICATORS OF INSTITUTIONALIZATION
Socialization Knowledge
Commitment Performance
Reward Allocation Preference
Diffusion Normative Consensus
INTERVENTION CHARACTERISTICSSensing and Calibration Value Consensus
Goal specificity
Programmability
Level of Change Target
Internal Support
Sponsorship

Organization Characteristics
The following three key dimensions of an organization can affect interventions characteristics and institutionalization
processes:
1. Congruence – the degree to which an intervention is perceived as being in harmony with the organization’s
managerial philosophy, strategy, and structure; its current environment and other changes taking place.
2. Stability of environment and technology – the degree to which the organization’s environment and technology
are changing.
3. Unionization – Diffusion of interventions may be more difficult in unionized settings, especially if the changes
affect union contracts issues, such as salary and fringe benefits, job design, and employee flexibility.

Intervention Characteristics
The following five major features of OD interventions can affect institutionalization processes:
1. Goal specificity – the extent to which interventions goals are specific rather than broad.
2. Programmability – the degree to which the changes can be programmed or the extent to which the different
intervention characteristics can be specified clearly in advance to enable socialization, commitment, and reward
allocation.
3. Level of change target – the extent to which the change target is the total organization, rather than a department
or small work group.
4. Internal support – the degree to which there is an internal support system to guide the change process.
5. Sponsorship – concerns the presence of a powerful sponsor who can initiate, allocate, and legitimize resources for
the intervention.
Powerful sponsor – from top management or high enough to control resources
They must have visibility and power to nurture the intervention and see that it remains viable.

Institutionalization Processes
The five institutionalization processes that can directly affect the degree to which OD interventions are
institutionalized:
1. Socialization – concerns the transmission of information about beliefs, preferences, norms, and values with
respect to the intervention.
2. Commitment – this binds people to behaviors associated with the intervention. It includes initial commitment to
the program, as well as recommitment over time.
3. Reward allocation – this involves linking rewards to the new behaviors required by an intervention.
4. Diffusion – refers to the process of transferring changes from one system to another.
5. Sensing and calibration – detecting deviations from desired intervention behaviors and taking corrective action.

Indicators of Institutionalization
Institutionalization is not all-or-nothing concept but reflects degrees of persistence in a change. The presence or
absence of following factors indicates the degree of institutionalization.
1. Knowledge – involves the extent to which organization members have knowledge of the behaviors associated
with an intervention. It is concerned with whether members know enough to perform the behaviors and to
recognize the consequences of that performance.
2. Performance – concerned with the degree to which intervention behaviors are actually performed.
3. Preferences – involves the degree to which organization members privately accept the organizational changes.
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 4. Normative consensus – the extent to which people agree about the appropriateness of the organizational changes.
5. Value consensus – concerned with social consensus on values relevant to the organizational changes.

Module 7 – HUMAN PROCESS INTERVENTIONS

Human process interventions – are a set of activities on the part of the consultant that helps group members understand,
diagnose, and improve their behaviors. They are change programs relating to interpersonal relations and group dynamics.
 Interventions are aimed at helping the group become better able to use its own resources to identify and solve
interpersonal problems and devise more effective ways of working. They are among the earliest ones devised in
OD and the most popular.

A. INTERPERSONAL AND GROUP PROCESS APPROACHES (Ch 12)

Interpersonal and Group Process Approaches – are among the most enduring OD interventions which include
process consultation, third-party interventions, and team building.

1. Process Consultation (PC) – is an approach that helps people and groups help themselves.
Schein defines process consultation as “the creation of a relationship that permits the client to perceive,
understand, and act on the process events that occur in (his or her) internal and external environment in order to
improve the situation as defined by the client.”
The process consultant does not offer expert help in the form of solutions to problems, rather works to help
managers, employees, and groups assess and improve human processes, such as communication, interpersonal
relations, decision making, and task performance.
Schein proposes ten principles to guide the process consultant’s actions.
 Always to be helpful
 Always stay in touch with the current reality
 Access your ignorance
 Everything you do is an intervention
 The client owns the problem and the solution
 Go with the flow
 Be constructively opportunistic with confrontive interventions
 Everything is information; errors will always occur and are the prime source for learning
 When in doubt, share the problem
Group Process Issues addressed by process consultation:
 Communication
 The functional roles of group members
 Group problem solving and decision making
 Group norms
 The use of leadership and authority

Basic Process Interventions: For each of the interpersonal and group process described above, a variety of
interventions may be used aimed at making individuals and groups more effective.

 Individual interventions – designed primarily to help people be more effective in their communication
with others. The process consultant can provide feedback to an individual about his overt behavior
during meetings. At the covert or hidden level of communication, feedback can be more personal and is
aimed at increasing the individual’s awareness of how their behavior affects others. A useful model for
this process has been developed by Luft in what is called the Johari Window (Figure 7.1). The “open”
window shows that some personal issues are perceived by both the individual and others. In the
“hidden” window, people are aware of their behavior, motives, and issues, but they conceal them from
others. The “blind” window comprises personal issues that are unknown to the individual but that are
communicated clearly to others. The “unknown” window represents those personal aspects that are
unknown to both the individual and others. Because such areas are outside the realm of the process
consultant and the group, focus is typically on the other three cells.
Individual interventions encourage people to be more open with others and to disclose their
views, opinions, concerns, and emotions, thus reducing the size of the hidden window. Further, the
consultant can help individuals give feedback to others, thus reducing the size of the blind window,
Reducing the size of these two windows helps improve the communication process by enlarging the open
window, the “self” that is open to both the individual and others.

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 Figure 7.1 Johari Window
Unknown to Others Known to Others

Hidden Open Known to Self

Unknown Blind Unknown to Self

 Group interventions – interventions aimed at the process, content, or structure of the group.
1) Process interventions sensitize the group to its own internal processes and generate interest in
analyzing them.
2) Content interventions – help the group determine what it works on
3) Structural interventions – help the group examine the stable and recurring methods it uses to
accomplish tasks and deal with external issues.

Assignment: Case Analysis

Case: Process Consultation at Action Company (p. 272, Application 12.1, Cummings and Worley, 2011)
Instruction: This is a team assignment. Read and discuss the case and answer the following questions. Email
your answers to me. I will grade it manually in canvas. This assignment is due on Oct. 30, 2020).
Questions: 1) What are the problems of the senior management team of Action Company? 2) What were the
initial interventions made by the process consultant which failed to solve the group’s problems? 3) After studying
the early interventions, what were the two interventions that he implemented? What were the results of each? 4)
What was the lesson learned by the process consultant?

2. Third-Party Interventions – focus on interpersonal conflicts within the organization.

Conflict naturally happens in groups and organizations and can arise from various sources, including differences
in personality, task orientation, goal interdependence, and perceptions among group members, as well as
competition for scarce resources. Conflict can enhance motivation and innovation and lead to greater
understanding of ideas and views. On the other hand, it can prevent people from working together constructively,
destroying necessary task interactions among group members. Interventions help involved parties interact with
each other directly, facilitating diagnosis of the conflict and its resolution.
Interpersonal conflict often occurs in iterative, cyclical stages known as “episodes.” An episodic model is shown
in Figure 7.2.

This model identifies four strategies for conflict resolution.

a. Prevent the ignition of the conflict through mandate.
b. Sets limits in the form of the conflict.
c. Help the parties to cope differently with the consequences of the conflict.
d. Attempt to eliminate or to resolve the basic issues causing the conflict.

Figure 7.2 A Cyclical Model of Interpersonal Conflict

Triggering
Triggering Event
Behavior Behavior
Event

Issues
Issues Behavior
Consequences Consequences

Episode 1 Episode 2
 3. Team Building – refers to planned activities that help groups improve the way they accomplish tasks, help
members enhance their interpersonal and problem-solving skills, and increase team performance.

A team – is a group of interdependent people who share a common purpose, have common work methods, and
hold each other accountable.
Types of teams:
 Groups reporting to the same manager
 Groups involving people with common goals
 Temporary groups formed to accomplish a specific, one-time task
 Groups consisting of people whose work roles are interdependent
 Groups with no formal links but whose collective purpose requires coordination
Team building activities:
 Activities relevant to one or more individuals
 Activities oriented to the group’s operations and behaviors – inward look by the team at its own
performance, behavior and culture for the purpose of improving effectiveness.
 Activities affecting the group’s relationship with the rest of the organization – understand the group’s
role within the organization including interaction, support and collaboration.
They also can be classified according to whether their orientation is (1) diagnostic or (2) developmental.
Manager’s Role
Ultimately, the manager is responsible for team functioning. It is the manager’s task to develop a work group that
can regularly analyze and diagnose it own effectiveness and work process.

The Results of Team Building:

 Some studies reported positive results in some variables including feelings, attitudes, and measures of
performance.
 Other studies have showed less positive outcomes but in general, the research supports a patter of
positive changes in attitudes or satisfaction.

B. ORGANIZATION PROCESS APPROACHES (Ch 13)

These change programs are directed at improving such processes as organizational problem solving, leadership,
visioning, and task accomplishment between groups—for a major subsystem or for an entire organization.
1. Organizational Confrontation Meeting – designed to mobilize the resources of the entire organization to
identify problems, set priorities and action targets, and begin working on identified problems.
Confrontation meeting process:
1. Schedule a group meeting of all those involved 6. Create master list of problems
2. Appoint groups representing all departments 7. Form problem-solving groups
3. Set ground rules 8. Rank the issues and opportunities, develop
4. Identify problems or opportunities action plan, and specify timetable
5. The group reports the problems to the large 9. provide periodic reports to the larger group
group or central meeting 10. Schedule follow-up meetings

2. Intergroup Relations Interventions – approaches whichhelp improve intergroup processes and lead to
organizational effectiveness.
a. Microcosm Groups – uses members from several groups to help solve organizationwide
problems. Intergroup issues are addressed and solutions are implemented in the larger organization.
For example, a microcosm group composed of members representing a variety of ethnic backgrounds,
cultures, and races can be created to address diversity issues in the organization. Microcosm groups work
through “parallel process,” which are the unconscious changes that take place in individuals when two or
more groups interact. Groups seem to “infect” and become “infected by the other groups. If a small and
representative group can intimately understand and solve a complex organization problem for themselves,
they are in a good position to recommend action to address the problem in the larger system.
The use of microcosm groups involves the following steps:
1. Identify an issue
2. Convene the group
3. Provide group training
4. Address the issue
5. Dissolve the group
b. Resolving Intergroup Conflict – helps two groups or departments within an organization
resolve dysfunctional conflicts. Intergroup conflict is neither good nor bad in itself, and in some cases,

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 conflict among departments is necessary and productive for organizations. However, for organizations with
very interdependent departments, conflict may become dysfunctional.
Application stages:
1. Groups and consultant convene to address issues
2. Groups are ask to address questions
3. Groups exchange and clarify answers
4. Groups analyze the discrepancies and work to understand their contribution to the perceptions
5. Groups discuss the discrepancies and contributions
6. Groups work to develop action plans on key areas

3. Large-Group Interventions – also referred to as “future search,” open-space meetings,” open-system planning,”
and appreciative inquiry summits. They focus on issues that affect the whole organization or large segments of it,
such developing new products or services, responding to environmental change, redesigning the organization, or
introducing new technology. The defining feature of large-group intervention is the bringing together of large
numbers of organization members and other stakeholders, often more than a hundred, for a two-to four-day
meeting or conference.
Application stages:
a. Preparing for the large group meeting
b. Conducting the meeting
c. Following-up on the meeting outcomes

Unit VIII

TECHNOSTRUCTURAL INTERVENTIONS
(Chapter 14-16)

Technostructural interventions – change programs focusing on the technology and structure of organizations.

I. RESTRUCTURING ORGANIZATIONS (Ch 14)

Increasing global competition and rapid technological changes are forcing organizations to restructure themselves from
rigid bureaucracies to leaner more flexible designs. These new forms of organizing are highly adaptive and innovative, but
require more sophisticated managerial capabilities to operate successfully. They often result in fewer managers and
employees and in efficient work flows.

Structural Designs

Organization structure – describes how the overall work of the organization is divided into subunits and how these
subunits are coordinated for task completion.
According to contingency view shown in Figure 9.1, organization structures should be designed to fit with at least four
factors: the environment, organization size, technology, and organization strategy. Organization effectiveness depends on
the extent to which its structures are responsive to these contingencies.

Figure 14.1 Contingencies Influencing Structural Design

Organization Size Environment

Structural Design Organization Strategy
Technology

Traditional Structural Design

11
1. The Functional Structure
The functional structure – subdivides the organization into functional units, such as marketing, operations, research and
development, human resources, and finance. It is the most widely used organizational structure in the world. The major
functional units are staffed by specialists from such disciplines ass engineering and accounting. It is considered easier to
manager specialists if they are grouped together under the same head and if the head of the department has been trained
and has experience in that particular discipline. Functional structures have their own advantages and disadvantages (Fig.
14.1 of the textbook).

2. The Divisional Structure

The divisional structure – groups organizational activities on the basis of products, services, customers, or geography.
 Divisional by products/services – organizing according to product or service which permits each of two or more
products to be managed as semiautonomous businesses.
 Divisional by customer – a structure which centers on various customer categories.
 Divisional by geography – groups activities according to geographic location. Organizations with nationwide or
worldwide markets encourage the use of geographic format to serve needs of unique geographic markets better.
 It is also known as a product or self-contained-unit structure, develop at about the same time by General Motors,
Sears, Standard Oil of New Jersey (now ExxonMobil), and DuPont.
 All or most of the resources and functions necessary to accomplish a specific objective are set up as a division
headed by a product or division manager. This structure has also its own advantages and disadvantages (Fig. 14.2
of the textbook).

3. The Matrix Structure

The matrix structure – combines the functional and the divisional structures, maximizing the strengths and minimizing the
weaknesses of both structures.
 It superimposes a lateral structure that focuses on product or project coordination on a vertical functional
structure.
 Matrix organization designs which originally evolved in the aerospace industry are now used widely in
manufacturing, service, nonprofit, governmental, and professional organizations.
 Contains three unique and critical roles; the top manager, who heads and balances the dual chains of command;
the matrix bosses (functional, product, or area), who share subordinates; and the “two-boss” managers, who report
to two different matrix leaders. Each of these roles has its own unique requirements.

New Structural Forms

1. The Process Structure

The process-based structures – are organized by forming multidisciplinary teams around core processes, such as
product development, order fulfilment, sales generation, and customer support.
 Emphasizes lateral rather than vertical relationships. All functions necessary to produce a product or service are
placed in a common unit usually managed by a role labelled a “process owner.”
 Eliminates many hierarchical and departmental boundaries that can impede task coordination and slow decision
making and task performance.
 The use of this process-based structure is growing rapid in a variety of manufacturing and service companies.
 Reduce the enormous costs of managing across departments and up and down the hierarchy
 Typically referred to as “horizontal,” “boundaryless,” or “team-based” organizations.
 Used to enhance customer service at such firms as Johnson & Johnson, 3M, Xerox, General Electric Capital
Services, Healthways, and American Express Financial Advisors.

2. The Customer-Centric Structure

The customer-centric structure – focuses subunits on the creation of solutions and the satisfaction of key
customers or customer groups. These units are supported by other units that develop new products, manufacture
components and products, and manage the supply chain.
 Lord Corporation, DOW, IBM, and Citibank have implemented these complex structures.
 Also known as front-back organizations, these structures excel at putting customer needs at the top of an
organization’s agenda.
 In a product-centric organization, the goal is to provide customers with the best product possible and to create
value by developing new products and innovative features. In a customer-centric structure, the organization
develops the best solution for the customer by offering a customized bundle of products, services, support, and
education.

3. The Network Structure

12
 A network structure – manages the diverse, complex, and dynamic relationships among multiple organizations or
units, each specializing in a particular business functions or task. Organizations that utilize network structure include
shamrock organizations and virtual, modular, or cellular corporations. Less formally, they have been described as “pizza”
structures, spiderwebs, starbursts, and cluster organizations.

 Four basic types of networks:

o An internal market network – exists when a single organization established each subunit as an
independent profit center that is allowed to trade in services and resources with each other as well as
with the external market.
o A vertical market network – composed of multiple organizations linked to a focal organization that
coordinates the movement of resources from raw materials to end consumer. Ex.: Nike has its shoes
manufactured in different plants around the world and then organizes their distribution through retail
outlets.
o An intermarket network – represents alliances among a variety of organizations in different markets
and is exemplified by the Japanese keiretsu, the Korean chaebol, and the Mexican grupos.
o An opportunity network – is the most advanced form of network structure. It is a temporary
constellation of organizations brought together to pursue a single purpose. Once accomplished, the
network disbands.
 Network structures typically have the following characteristics:
o Vertical Disaggregation – breaking up of the organization’s business functions, such as production,
marketing, and distribution, into separate organizations performing specialized work.
o Brokers – Networks often are managed by broker organizations or “process orchestrators” that locate
and assemble member organizations.
o Coordinating mechanisms – They are not generally controlled by hierarchical arrangements or plans.
Rather, coordination of the work falls into three categories:
 Informal relationships – among individuals who have a well-developed partnerships
 Formal contracts – such as ownership control, licensing arrangements, or purchase agreements
 Market mechanisms – such as spot payments, performance accountability, technology standards,
and information systems, ensure that all parties are aware of each other’s activities and can
communicate with each other.

Downsizing

Downsizing – refers to interventions aimed at reducing the size of the organization.

 Typically accomplished by decreasing the number of employees through layoffs, attrition, redeployment, or early
retirement or by reducing the number of organizational units or managerial levels through divestiture,
outsourcing, reorganization, or delayering. In practice, downsizing generally, involves layoffs
 Associated with lower-level workers, but recently includes staff specialists, middle managers, and senior
executives.
 Downsizing is generally a response to at least four major conditions:
o Mergers and acquisitions
o Organization decline caused by loss of revenues and market share and by technological and industrial change
o Implementation of new organizational structures
o Results from beliefs and social pressures that smaller is better. There is strong conviction that organizations
should be leaner and more flexible.
 Application stages: Successful downsizing intervention tend to proceed by the following steps:
o Clarify the organization’s strategy
o Assess downsizing options and make relevant choices
o Implement the changes
o Address the needs of survivors and those who leave
o Follow through with growth plans
 Results of Downsizing: The empirical research on downsizing is mostly negative.
o Frrm the research produced thus far, downsizing as a strategy for improvement has proven to be, by and
large a failure.”
o Research on the effects of downsizing on financial performance also shows negative results.
o These research findings must be interpreted cautiously for three reasons: 1)Many of the surveys
received responses from human resources specialist who might have a negative view of downsizing; 2)
13
 The studies of financial performance may have included a biased sample of firms; and 3) Disappointing
results may be a function of the way downsizing was implemented.

Reengineering

Reengineering – is the fundamental rethinking and radical redesign of business processes to achieve dramatic
improvements in performance.
 Transforms how organizations traditionally produce and deliver goods and services.
 Streamlines work processes and makes them faster and more flexible; consequently, they are more responsive to
changes in competitive conditions, customer demands, product life cycles, and technologies.
 Successful reengineering requires an almost revolutionary change in how organizations design their structures and
their work. It seeks to leverage information technology when large-scale businesses processes, such as supply
chain logistics, change radically.
 It is associated with downsizing, the shift from functional to process-based structures, and work design.
 Reengineering also can be linked to transformation of organization structures and work design.
 Application stages:
o Prepare the organization
o Fundamentally rethink the way work gets done
 Identify and analyze core business processes
 Define performance objectives
 Design new processes
o Restructure the organization around the new business processes
 Results from reengineering: Results from reengineering vary widely.

II. EMPLOYEE INVOLVEMENT INTERVENTIONS (Ch 15)

Employee Involvement (EI)

Employee involvement – intervention aimed at moving decision making downward in the organization, closer to
where the actual work takes place.
 Employee involvement – seeks to increase the members’ inputs into decisions that affect organization
performance and employee well being. It is the current label used to describe a set of practices and philosophies
that started with the quality-of-work-life movement in the late 1950s.
 Variously referred to as “empowerment,” “participative management,” “engagement,” “work design,” “high
involvement,” “industrial democracy,” and “quality of work life.”
 It covers diverse approaches to gaining greater participation in relevant workplace decisions.
It can be described in terms of four key elements that promote worker involvement:
1. Power – providing people with enough authority to make wok-related decisions
2. Information – timely access to relevant information is vital to making effective decisions
3. Knowledge and skills – requisites to make good decisions
4. Rewards – can have powerful effect on getting people involved in the organization
These four elements contribute to EI success by determining how much employee participation in decision making is
possible in organizations.

How Employee Involvement Affects Productivity

Figure 15.1 How Employee Involvement Affects Productivity

14
 Improved Communication
Improved Capabilities
Improved Motivation
and Coordination
Employee Involvement Intervention Improved Productivity

Figure 15.2 Secondary Effects on Productivity

Employee Well-being Attraction and Productivity

and Satisfaction Retention

Employee
Involvement
Intervention

Productivity

Employee Involvement Applications:

1. Parallel Structures – involve members in resolving ill-defined complex problems and build adaptability into
bureaucratic organizations. Also known as “collateral structures,” “dualistic structures,” or “shadow structures,”
parallel structures operate in conduction with the formal organization. They provide members with an alternative
setting in which to address problems and to propose innovative solutions free from the existing, formal
organization structure and culture. Two most common parallel structures are:
a. Cooperative union-management projects – focused on workplace change and productivity
b. Quality Circles – small groups of employee who meet voluntarily to identify and solve productivity
problems
Application stages of the two programs:
1) Define the purpose and scope 3) Communicate with organization members
2) Form a steering committee 4) Create forums for employee problems solving
2. Total Quality Management – also known as “continuous improvement,” “continuous quality,” “lean,” and “six
sigma,” TW\QM grew out of a manufacturing emphasis on quality control and represents a long-term effort to
orient all of an organization’s activities around the concept of quality.
 W. Edwards Deming and Joseph M. Juran – the fathers of the modern quality movement.

Table 15.1 Deming’s Quality Guidelines

THE FOURTEEN POINTS THE SEVEN DEADLY SINS

1. Create a constancy of purpose 1. Lack of constancy of purpose
2. Adopt a new philosophy 2. Emphasizing short-term profits and immediate
3. End the practice of purchasing at lowest prices dividends
4. Institute leadership 3. Evaluation of performance, merit rating, or annual
5. Eliminate empty slogans review
6. Eliminate numeral quotas 4. Mobility of top management
7. institute on-the-job-training 5. Running a company only on visible figures
8. Drive out fear 6. Excessive medical costs
9. Break down barriers between departments 7. Excessive cost of warranty
10. Take action to accomplish the transformation
11. Improve constantly and forever the process of
production and service
12. Cease dependence on mass inspection
13. Remove barriers to pride in workmanship
14. Retrain vigorously

15
 Application Stages of TQM:
1) Gain long-term senior management commitment
2) Train members in quality methods
3) Start quality improvement projects
4) Measure progress
5) Reward accomplishment

3. High-Involvement Organizations (HIOs) – these interventions create organizational conditions that support
high levels of employee participation. In HIOs almost all organization features, such as structure, work design,
information and control systems, physical layout, personnel policies, and reward systems are designed jointly by
management and workers to promote high levels of involvement and performance.

Table 15.2 Design Features for a Participative System

THE FOURTEEN POINTS THE SEVEN DEADLY SINS

□ ORGANIZATIONAL STRUCTURE □ TRAINING
1. Flat 1. Heavy commitment
2. Lean 2. Peer training
3. Minienterprise oriented 3. Economic education
4. team-based 4. Interpersonal skills
5. Participated council or structure □ REWARD SYSTEM
□ JOB DESIGN 1. Open
1. Individually enriched 2. Skill based
2. Self-managing teams 3. Gain sharing or ownership
□ INFORMATION SYSTEM 4. Flexible benefits
1. Open 5. All salaried workforce
2. Inclusive 6. Egalitarian perquisites
3. Tied to jobs □ PERSONNEL POLICIES
4. Decentralized; team-based 1. Stability of employment
5. Participatively set goals and standards 2. Participatively established through representative
□ CAREER SYSTEM group
1. Tracks and counselling available □ PHYSICAL LAYOUT
2. Team=based 1. Around organizational structure
3. Potential and process-skill oriented 2. Egalitarian
□ SELECTION 3. Safe and pleasant
1. Realistic job preview
2. Team-based
3. Potential and process-skill oriented

Application Factors: At present, there is no universally accepted approach to implementing the high-
involvement features described above. The actual implementation process often is specific to the situation.
Nevertheless, at least two distinct factors characterize how HIOs are implemented:
1) Implementation is generally is guided by an explicit statement of values that members want the new
organization to support.
2) The implementation process is participative in nature.

Results of HIO: A number of studies provide support for the high-involvement model.

III. WORK DESIGN APPROACHES Ch 16)

Work design – creating jobs and work groups that generate high levels of employee fulfilment and productivity. This
intervention can be part of a larger employee involvement application, or it can be an independent change program. Work
design has been researched and applied extensively in organizations. Recently, organizations have tended to combine
work design with formal structure and supporting changes in goal setting, reward systems, work environment, and other
performance management practices.

Three approaches to work design; 1) the engineering approach; 2) the motivational approach, and 3) the sociotechnical
systems approach.

1. The Engineering Approach – focuses on efficiency and simplification, and results in traditional jobs and work-group
designs. It is the oldest and most prevalent approach to designing work based on engineering concepts and methods.
16
  This approach is based on the pioneering work of Frederick Taylor, the father of scientific
management.
 It proposes that the most efficient work designs can be determined by clearly specifying the
tasks to be performed, the work methods to be used, and the work flow among individuals.
 It scientifically analyzes workers’ tasks to discover those procedures that produce the maximum
output with the minimum input of energies and resources.
 This approach produces two kinds of work design: traditional jobs and traditional work groups.
 Traditional jobs involve relatively routine and repetitive forms of work, where little interaction
among people is needed to produce a service or product. Call center operators, data-entry positions, and product
support representatives are examples of this job design.
 Traditional work groups are composed of members performing routine yet interrelated tasks.
Member interactions are typically controlled by rigid work flows, supervisors, and schedules, found on assembly
lines.

2. The Motivational Approach – views the effectiveness of organizational activities primarily as a function of member
needs and satisfaction and seeks to improve employee performance and satisfaction by enriching jobs.
 This method provides people with opportunities for autonomy, responsibility, closure, and performance feedback.
Job enrichment involves designing jobs with high levels of meaning, discretion, and knowledge of results.
 This approach is usually associated with the research of Herzberg and of Hackman and Oldham.
 Herzberg’s Two-factor Theory of motivation proposed that certain attributes of work, such as opportunities for
advancement and recognition, which he called motivators, help increase job satisfaction. Other attributes,
Herzberg called hygiene factors, such as company policies, working conditions, pay, and supervision, do not
produce satisfaction by rather prevent dissatisfaction—important contributors because only satisfied workers are
motivated.
 Application stages: The basic steps for job enrichment according to Hackman and Oldham include:
1) Making a thorough diagnosis 4) Establishing client relationship
2) Forming natural work units 5) Vertical loading
3) Combining tasks 6) Opening feedback channels

3. The Sociotechnical Systems Approach – this approach seeks to optimize both the social and the technical aspects of
work systems. This approach is currently the most extensive body of scientific and applied underlying employee
involvement and innovative work designs. Its techniques and design principles derive from extensive action research
in both public and private organizations.
 STS theory is based on two fundamental premises: that an organization or work unit is
a combined, social-plus-technical system (sociotechnical), and that this system is open in relation to its
environment.
 This method has led to a popular form of work design called “self-managed teams,”
which are composed of multi-skilled members performing interrelated tasks.
 Self-managed team are also referred to as self-directed, self-regulating, or high-
performance work teams.
 Application Stages: The steps involved in STS approach:
1) Sanctioning the design effort 4) Specifying support systems
2) Diagnosing the work systems 5) Implementing and evaluating the work designs
3) Generating appropriate designs 6) Continual change and improvement

4. Designing Work for Technical and Personal Needs – The technical and personal approach affecting work-design
success provide a contingency framework for choosing among the four different kinds of work designs: traditional
jobs, traditional work groups, enriched jobs, and self-managed teams.

Technical Factors. Two key dimensions can affect change on the shop floor: 1) technical interdependence, or the
extent to which cooperation among workers is required to produce a product or service; and 2) technical uncertainty,
or the amount of information processing and decision making employees must do to complete a task.
The degree of technical interdependence – determines whether the work should be designed for individual jobs or for
work groups. Technical uncertainty – determines whether work should be designed for external forms of control, such
as supervision, scheduling, or standardization, or for worker self-control.

Personal-Need Factors. Two types of personal needs can influence the kinds of work designs that are most effective:
social needs, or the desire for significant social relationships; and growth needs, or the desire for personal
accomplishment, learning, and development. The degree of social needs – determines whether work should be
designed for individual jobs or work groups. People with low needs for social relationships are more likely to be
satisfied working on individualized jobs than in interacting groups. Conversely, people with high social needs are
more likely to be attracted to group forms of work than to individualized forms.

17
 Meeting Both Technical and Personal Needs
 When the technical conditions of a company’s production process are compatible with the personal needs of
employees, the respective work designs combine readily and can satisfy both.
 When technology and people are incompatible—at least two kinds of changes can be made to design work that
satisfies both requirements: 1) Change the technology, 2) Leave the two components unchanged and create
compromise work designs that only partially fulfil the demands of either component.

Unit VIII
TECHNOSTRUCTURAL INTERVENTIONS
(Chapter 14-16)

Technostructural interventions – change programs focusing on the technology and structure of organizations.

I. RESTRUCTURING ORGANIZATIONS (Ch 14)

Increasing global competition and rapid technological changes are forcing organizations to restructure themselves
from rigid bureaucracies to leaner more flexible designs. These new forms of organizing are highly adaptive and
innovative, but require more sophisticated managerial capabilities to operate successfully. They often result in fewer
managers and employees and in efficient work flows.

Structural Designs

Organization structure – describes how the overall work of the organization is divided into subunits and how these
subunits are coordinated for task completion.
According to contingency view shown in Figure 9.1, organization structures should be designed to fit with at least four
factors: the environment, organization size, technology, and organization strategy. Organization effectiveness depends on
the extent to which its structures are responsive to these contingencies.

Figure 9.1 Contingencies Influencing Structural Design

Organization Size Structural

Environment
Design Organization Strategy
Technology

Traditional Structural Design

1. The Functional Structure

The functional structure – subdivides the organization into functional units, such as marketing, operations, research and
development, human resources, and finance. It is the most widely used organizational structure in the world. The major
functional units are staffed by specialists from such disciplines ass engineering and accounting. It is considered easier to
manager specialists if they are grouped together under the same head and if the head of the department has been trained
and has experience in that particular discipline. Functional structures have their own advantages and disadvantages (Fig.
14.1 of the textbook).

2. The Divisional Structure

The divisional structure – groups organizational activities on the basis of products, services, customers, or geography.
18
  Divisional by products/services – organizing according to product or service which permits each of two or more
products to be managed as semiautonomous businesses.
 Divisional by customer – a structure which centers on various customer categories.
 Divisional by geography – groups activities according to geographic location. Organizations with nationwide or
worldwide markets encourage the use of geographic format to serve needs of unique geographic markets better.
 It is also known as a product or self-contained-unit structure, develop at about the same time by General Motors,
Sears, Standard Oil of New Jersey (now ExxonMobil), and DuPont.
 All or most of the resources and functions necessary to accomplish a specific objective are set up as a division
headed by a product or division manager. This structure has also its own advantages and disadvantages (Fig. 14.2
of the textbook).

3. The Matrix Structure

The matrix structure – combines the functional and the divisional structures, maximizing the strengths and minimizing the
weaknesses of both structures.
 It superimposes a lateral structure that focuses on product or project coordination on a vertical functional
structure.
 Matrix organization designs which originally evolved in the aerospace industry are now used widely in
manufacturing, service, nonprofit, governmental, and professional organizations.
 Contains three unique and critical roles; the top manager, who heads and balances the dual chains of command;
the matrix bosses (functional, product, or area), who share subordinates; and the “two-boss” managers, who report
to two different matrix leaders. Each of these roles has its own unique requirements.

New Structural Forms

1. The Process Structure

The process-based structures – are organized by forming multidisciplinary teams around core processes, such as product
development, order fulfilment, sales generation, and customer support.
 Emphasizes lateral rather than vertical relationships. All functions necessary to produce a product or service are
placed in a common unit usually managed by a role labelled a “process owner.”
 Eliminates many hierarchical and departmental boundaries that can impede task coordination and slow decision
making and task performance.
 The use of this process-based structure is growing rapid in a variety of manufacturing and service companies.
 Reduce the enormous costs of managing across departments and up and down the hierarchy
 Typically referred to as “horizontal,” “boundaryless,” or “team-based” organizations.
 Used to enhance customer service at such firms as Johnson & Johnson, 3M, Xerox, General Electric Capital
Services, Healthways, and American Express Financial Advisors.

2. The Customer-Centric Structure

The customer-centric structure – focuses subunits on the creation of solutions and the satisfaction of key customers or
customer groups.
 These units are supported by other units that develop new products, manufacture components and products, and
manage the supply chain.
 Organizations like the Lord Corporation, DOW, IBM, and Citibank have implemented these complex structures.
 Also known as front-back organizations, these structures excel at putting customer needs at the top of an
organization’s agenda.
 In a product-centric organization, the goal is to provide customers with the best product possible and to create
value by developing new products and innovative features. In a customer-centric structure, the organization
develops the best solution for the customer by offering a customized bundle of products, services, support, and
education.

3. The Network Structure

A network structure – manages the diverse, complex, and dynamic relationships among multiple organizations or units,
each specializing in a particular business functions or task.
 Organizations that utilize network structure include shamrock organizations and virtual, modular, or cellular
corporations. Less formally, they have been described as “pizza” structures, spiderwebs, starbursts, and cluster
organizations.
 Four basic types of networks:
o An internal market network – exist when a single organization established each subunit as an
independent profit center that is allowed to trade in services and resources with each other as well as
with the external market.
o A vertical market network – is composed of multiple organizations linked to a focal organization that
coordinates the movement of resources from raw materials to end consumer. Example: Nike has its

19
 shoes manufactured in different plants around the world and then organizes their distribution through
retail outlets.
o An intermarket network – represents alliances among a variety of organizations in different markets
and is exemplified by the Japanese keiretsu, the Korean chaebol, and the Mexican grupos.
o An opportunity network – is the most advanced form of network structure. It is a temporary
constellation of organizations brought together to pursue a single purpose. Once accomplished, the
network disbands.
 Network structures typically have the following characteristics:
o Vertical Disaggregation – breaking up of the organization’s business functions, such as production,
marketing, and distribution, into separate organizations performing specialized work.
o Brokers – Networks often are managed by broker organizations or “process orchestrators” that locate
and assemble member organizations.
o Coordinating mechanisms – They are not generally controlled by hierarchical arrangements or plans.
Rather, coordination of the work falls into three categories:
 Informal relationships among individuals who have a well-developed partnerships
 Formal contracts – such as ownership control, licensing arrangements, or purchase agreements
 Market mechanisms – such as spot payments, performance accountability, technology
standards, and information systems, ensure that all parties are aware of each others’ activities
and can communicate with each other.

Downsizing

Downsizing – refers to interventions aimed at reducing the size of the organization.

 Typically accomplished by decreasing the number of employees through layoffs, attrition, redeployment, or early
retirement or by reducing the number of organizational units or managerial levels through divestiture,
outsourcing, reorganization, or delayering.
 In practice, downsizing generally, involves layoffs
 Associated with lower-level workers, but recently includes staff specialists, middle managers, and senior
executives.
 Consequence of downsizing: the rise of the contingent workforce. These less expensive temporary or permanent
part-time workers are hired by the same organizations that just laid off thousands of employees.
 Downsizing is generally a response to at least four major conditions:
o Mergers and acquisitions
o Organization decline caused by loss of revenues and market share and by technological and industrial change
o Implementation of new organizational structures
o Results from beliefs and social pressures that smaller is better. There is strong conviction that organizations
should be leaner and more flexible.
 Application stages: Successful downsizing intervention tend to proceed by the following steps:
o Clarify the organization’s strategy
o Assess downsizing options and make relevant choices
o Implement the changes
o Address the needs of survivors and those who leave
o Follow through with growth plans
 Results of Downsizing: The empirical research on downsizing is mostly negative.
o Form the research produced thus far, downsizing as a strategy for improvement has proven to be, by and
large a failure.”
o Research on the effects of downsizing on financial performance also shows negative results.
o These research findings must be interpreted cautiously for three reasons:
 Many of the surveys received responses from human resources specialist who might have a
negative view of downsizing
 The studies of financial performance may have included a biased sample of firms
 Disappointing results may be a function of the way downsizing was implemented.

Reengineering

Reengineering – is the fundamental rethinking and radical redesign of business processes to achieve dramatic
improvements in performance.
 Transforms how organizations traditionally produce and deliver goods and services.

20
  Streamlines work processes and makes them faster and more flexible; consequently, they are more responsive to
changes in competitive conditions, customer demands, product life cycles, and technologies.
 Successful reengineering requires an almost revolutionary change in how organizations design their structures and
their work.
 It seeks to leverage information technology when large-scale businesses processes, such as supply chain logistics,
change radically.
 It is associated with downsizing, the shift from functional to process-based structures, and work design.
 Reengineering also can be linked to transformation of organization structures and work design.
 Application stages:
o Prepare the organization
o Fundamentally rethink the way work gets done
 Identify and analyze core business processes
 Define performance objectives
 Design new processes
o Restructure the organization around the new business processes

 Results from reengineering:

o Results from reengineering vary widely.
o Industry journals and the business press regularly contain accounts of dramatic business outcomes
attributable to reengineering. But the best selling book on reengineering also reported that as many 70%
of the efforts failed to meet their cost, cycle time, or productivity objectives.
o One study polled 497 companies in the US and 1,245 companies in Europe. And found that 60% of US
firms and 75% of European firms had engaged in at least one reengineering project. Eighty-five percent
of the firms reported little or no gain from the efforts. Despite its popularity, reengineering is only
becoming to be evaluated systemically, and there is little research to help unravel the disparate results.

II. EMPLOYEE INVOLVEMENT INTERVENTIONS (Ch 15)

Employee Involvement (EI)

Employee involvement – interventionaimed at moving decision making downward in the organization, closer to where
the actual work takes place.
 Employee involvement – seeks to increase the members’ inputs into decisions that affect organization
performance and employee well being. It is the current label used to describe a set of practices and philosophies
that started with the quality-of-work-life movement in the late 1950s.
 Variously referred to as “empowerment,” “participative management,” “engagement,” “work design,” “high
involvement,” “industrial democracy,” and “quality of work life.”
 It covers diverse approaches to gaining greater participation in relevant workplace decisions.
It can be described in terms of four key elements that promote worker involvement:
5. Power – providing people with enough authority to make wok-related decisions
6. Information – timely access to relevant information id vital to making effective decisions
7. Knowledge and skills – requisites to make good decisions
8. Rewards – can have powerful effect on getting people involved in the organization
These four elements contribute to EI success by determining how much employee participation in decision making is
possible in organizations.

The Diffusion of Employee Involvement Practices

 The number of organization using EI practices is growing in both US and Europe.
 In the most comprehensive, long-term study of EI applications, Lawler and his colleagues at the Center for
Effective Organizations at the University of Southern California have surveyed the Fortune 1000 firms every
three years from 1987 to 2005. Their data show positive trends in EI use among these firms over that time period,
including both a growing number of firms applying EI and a greater percentage of the workforce included in such
programs.
 Despite these positive trends, however, their research reveals that the scope and depth of EI interventions are
relatively modest.
 In less powerful EI interventions, most of the Fortune 500 firms involve more than 20% of the workforce. But for
more powerful interventions, fewer than 20% of the workforce is involved.
 Many countries in Western Europe are using EI, (France, Germany, Denmark, Ireland, Sweden, Norway, Holland,
Italy). Although tremendous changes currently taking place in countries such as Russia, Bulgaria, the Philippines,
and the PRC may have dampened EI efforts, several programs are actively under way. Canada, Mexico, India,
Australia, New Zealand, Hongkong, and Japan also are using EI.

How Employee Involvement Affects Productivity

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Figure 15.1 How Employee Involvement Affects Productivity

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

Figure 15.2 Secondary Effects on Productivity

Employee Well-being Attraction and Productivity

and Satisfaction Retention

Employee
Employee Involvement Applications:
Involvement
Intervention – involve members in resolving ill-defined complex problems and build adaptability into
4. Parallel Structures
bureaucratic organizations. Also Productivity
known as “collateral structures,” “dualistic structures,” or “shadow structures,”
parallel structures operate in conduction with the formal organization. They provide members with an alternative
setting in which to address problems and to propose innovative solutions free from the existing, formal
organization structure and culture. Two most common parallel structures are:
a. Cooperative union-management projects – focused on workplace change and productivity
b. Quality Circles – small groups of employee who meet voluntarily to identify and solve productivity
problems
Application stages of the two programs:
1) Define the purpose and scope 3) Communicate with organization members
2) Form a steering committee 4) Create forums for employee problems solving
5. Total Quality Management – also known as “continuous improvement,” “continuous quality,” “lean,” and “six
sigma,” TW\QM grew out of a manufacturing emphasis on quality control and represents a long-term effort to
orient all of an organization’s activities around the concept of quality.
 W. Edwards Deming and Joseph M. Juran – the fathers of the modern quality movement.

Table 15.1 Deming’s Quality Guidelines

THE FOURTEEN POINTS THE SEVEN DEADLY SINS

15. Create a constancy of purpose 8. Lack of constancy of purpose
16. Adopt a new philosophy 9. Emphasizing short-term profits and immediate
17. End the practice of purchasing at lowest prices dividends
18. Institute leadership 10. Evaluation of performance, merit rating, or annual
19. Eliminate empty slogans review
20. Eliminate numeral quotas 11. Mobility of top management
21. institute on-the-job-training 12. Running a company only on visible figures
22. Drive out fear 13. Excessive medical costs
23. Break down barriers between departments 14. Excessive cost of warranty
24. Take action to accomplish the transformation
25. Improve constantly and forever the process of
production and service
26. Cease dependence on mass inspection
27. Remove barriers to pride in workmanship
28. Retrain vigorously

Application Stages of TQM:

1) Gain long-term senior management commitment
2) Train members in quality methods
3) Start quality improvement projects
4) Measure progress
5) Reward accomplishment
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 6. High-Involvement Organizations (HIOs) – these interventions create organizational conditions that support
high levels of employee participation. In HIOs almost all organization features, such as structure, work design,
information and control systems, physical layout, personnel policies, and reward systems are designed jointly by
management and workers to promote high levels of involvement and performance.

Table 15.2 Deming’s Quality Guidelines

THE FOURTEEN POINTS THE SEVEN DEADLY SINS

□ ORGANIZATIONAL STRUCTURE □ TRAINING
6. Flat 5. Heavy commitment
7. Lean 6. Peer training
8. Minienterprise oriented 7. Economic education
9. team-based 8. Interpersonal skills
10. Participated council or structure □ REWARD SYSTEM
□ JOB DESIGN 7. Open
3. Individually enriched 8. Skill based
4. Self-managing teams 9. Gain sharing or ownership
□ INFORMATION SYSTEM 10. Flexible benefits
6. Open 11. All salaried workforce
7. Inclusive 12. Egalitarian perquisites
8. Tied to jobs □ PERSONNEL POLICIES
9. Decentralized; team-based 3. Stability of employment
10. Participatively set goals and standards 4. Participatively established through representative
□ CAREER SYSTEM group
4. Tracks and counselling available □ PHYSICAL LAYOUT
5. Team=based 4. Around organizational structure
6. Potential and process-skill oriented 5. Egalitarian
□ SELECTION 6. Safe and pleasant
4. Realistic job preview
5. Team-based
6. Potential and process-skill oriented

Application Factors: At present, there is no universally accepted approach to implementing the high-
involvement features described above. The actual implementation process often is specific to the situation.
Nevertheless, at least two distinct factors characterize how HIOs are implemented:
1) Implementation is generally is guided by an explicit statement of values that members want the new
organization to support.
2) The implementation process is participative in nature.

Results of HIO:
A number of studies provide support for the high-involvement model.
 A survey of 98 HIOs showed that about 75% of them perceived their performance relative to competitors as
better than average on quality of work life, customer service, productivity, quality, and grievance rates.
Voluntary turnover was 2%, return on investment was almost four times greater than industry averages; and
return on sales was more than five times greater.
 More recently, a study of more than 160 firms in New Zealand supported a positive relationship between
high-involvement practices and productivity measured in terms of sales per employee. A study of 132 large
manufacturing firms found a strong positive relationship between high-involvement work practices and labor
productivity. The strength of the relationship varied, however, depending on the industry’s capital intensity,
R&D intensity, and growth.

III. WORK DESIGN APPROACHES Ch 16)

Work design – creating jobs and work groups that generate high levels of employee fulfilment and productivity. This
intervention can be part of a larger employee involvement application, or it can be an independent change program. Work
design has been researched and applied extensively in organizations. Recently, organizations have tended to combine
work design with formal structure and supporting changes in goal setting, reward systems, work environment, and other
performance management practices.

Three approaches to work design; 1) the engineering approach; 2) the motivational approach, and 3) the sociotechnical
systems approach.

5. The Engineering Approach – focuses on efficiency and simplification, and results in traditional jobs and work-group
designs.
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  It is the oldest and most prevalent approach to designing work based on engineering concepts and methods.
 This approach is based on the pioneering work of Frederick Taylor, the father of scientific
management.
 It proposes that the most efficient work designs can be determined by clearly specifying the
tasks to be performed, the work methods to be used, and the work flow among individuals.
 It scientifically analyzes workers’ tasks to discover those procedures that produce the maximum
output with the minimum input of energies and resources.
 This approach produces two kinds of work design: traditional jobs and traditional work groups.
 Traditional jobs involve relatively routine and repetitive forms of work, where little interaction
among people is needed to produce a service or product. When the work can be completed by one person,
traditional jobs are created. Call center operators, data-entry positions, and product support representatives are
examples of this job design.
 When the work requires coordination among people, traditional work groups are developed.
Traditional work groups are composed of members performing routine yet interrelated tasks. Member
interactions are typically controlled by rigid work flows, supervisors, and schedules, such as might found on
assembly lines.

6. The Motivational Approach – views the effectiveness of organizational activities primarily as a function of member
needs and satisfaction and seeks to improve employee performance and satisfaction by enriching jobs.
 This method provides people with opportunities for autonomy, responsibility, closure, and performance feedback.
Job enrichment involves designing jobs with high levels of meaning, discretion, and knowledge of results.
 This approach is usually associated with the research of Herzberg and of Hackman and Oldham.
 Herzberg’s Two-factor Theory of motivation proposed that certain attributes of work, such as opportunities for
advancement and recognition, which he called motivators, help increase job satisfaction. Other attributes,
Herzberg called hygiene factors, such as company policies, working conditions, pay, and supervision, do not
produce satisfaction by rather prevent dissatisfaction—important contributors because only satisfied workers are
motivated.
 Application stages: The basic steps for job enrichment according to Hackman and Oldham include:
1) Making a thorough diagnosis
2) Forming natural work units
3) Combining tasks
4) Establishing client relationship
5) Vertical loading
6) Opening feedback channels

7. The Sociotechnical Systems Approach – this approach seeks to optimize both the social and the technical aspects of
work systems.
 The STS approach is currently the most extensive body of scientific and applied
underlying employee involvement and innovative work designs. Its techniques and design principles derive from
extensive action research in both public and private organizations.
 STS theory is based on two fundamental premises: that an organization or work unit is
a combined, social-plus-technical system (sociotechnical), and that this system is open in relation to its
environment.
 This method has led to a popular form of work design called “self-managed teams,”
which are composed of multi-skilled members performing interrelated tasks.
 Self-managed team are alternatively referred to as self-directed, self-regulating, or
high-performance work teams.
 Application Stages: The steps involved in STS approach:
4) Sanctioning the design effort
5) Diagnosing the work systems
6) Generating appropriate designs
7) Specifying support systems
8) Implementing and evaluating the work designs
9) Continual change and improvement

8. Designing Work for Technical and Personal Needs – The technical and personal approach affecting work-design
success provide a contingency framework for choosing among the four different kinds of work designs: traditional
jobs, traditional work groups, enriched jobs, and self-managed teams.

Technical Factors
Two key dimensions can affect change on the shop floor: technical interdependence, or the extent to which
cooperation among workers is required to produce a product or service; and technical uncertainty, or the amount of
information processing and decision-making employees must do to complete a task.

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The degree of technical interdependence – determines whether the work should be designed for individual jobs or for
work groups.
Technical uncertainty – determines whether work should be designed for external forms of control, such as
supervision, scheduling, or standardization, or for worker self-control.

Personal-Need Factors
Two types of personal needs can influence the kinds of work designs that are most effective: social needs, or the desire
for significant social relationships; and growth needs, or the desire for personal accomplishment, learning, and
development.
The degree of social needs – determines whether work should be designed for individual jobs or work groups.
People with low needs for social relationships are more likely to be satisfied working on individualized jobs than in
interacting groups. Conversely, people with high social needs are more likely to be attracted to group forms of work
than to individualized forms.

Meeting Both Technical and Personal Needs

 When the technical conditions of a company’s production process are compatible with the personal needs of
employees, the respective work designs combine readily and can satisfy both.
 When technology and people are incompatible—at least two kinds of changes can be made to design work that
satisfies both requirements:
o Change the technology
o Leave the two components unchanged and create compromise work designs that only partially fulfil the
demands of either component.

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