DR Usman Otdd Notes

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BA 5018 – ORGANIZATIONAL THEORY, DESIGN AND DEVELOPMENT –

DR K S USMAN MOHIDEEN
BA 5018 – ORGANIZATIONAL THEORY DESIGN AND DEVELOPMENT

Why to study OTDD? Most people live, work and die in organization. We spend maximum
time in organization, it can be MNC, governmental, NPO, family business etc. So we to need
to know how to solve problem and maximise efficiency to be successful in an organization.
Organization Theory – How organizational functions are affected by environment.
Organizational Design – How Structure and Culture are selected.
Organizational Development – Strategy to increase Organizational Efficiency.
UNIT I – ORGANIZATION AND ITS ENVIRONMENT
The word Organization is derived from a Greek word Organon which means Organ.
Definition of Organization: Organization is an entity where group of people comes together
to achieve common goal and acts within a boundary and linked to an environment that are
mutually interdependent. – Gareth Jones.
Definition of Entrepreneurship: It is a process by which an individual or group recognize
opportunities and apply resources to satisfy the needs of human needs.
Definition of Organizational Environment: The set of forces and conditions that operate
beyond the boundaries of organization but has an ability to affect process of acquiring and
applying resources in the process of value creation. – Cummings.
Organizational environment is defines as all elements that exist outside the boundary of the
organization and have the potential to affect all or part of the organization.
Why to study Organizational Environment? Environment is Uncertain, Dynamic,
Turbulent, Reactive and Relatively Changing.
Organizational Domain: Range of Good & Services that the organization produces. Domain
is the chosen environment field of action. It defines the organization’s niche and those
external sectors with which the organization will interact to accomplish its goals.
Organizational Environment/Factors:
Internal Environment: Sometimes also referred as Specific Environment and directly
affects an organization. Financial Resources (stock markets, banks, savings and loans,
private investors), Human Resources (Labor market, employment agencies, universities,
training schools, employees in other companies, unionization), Research & Development,
Philosophy of Top Management, Corporate Image, Physical Resources (Suppliers,
manufacturers, real estate, services), Vision and Mission of an Organization.
Owners: Owners are people who invested in the company and have property rights and
claims on the organization. Owners can be an individual or group of person who started the
DR K S USMAN MOHIDEEN, B.Com, M.B.A, M.Com, M.H.R.M, M.Sc (Psychology), Ph.D
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company; or who bought a share of the company in the share market. They have the right to
change the company’s policy at any time.
Board of Directors: The board of directors is the governing body of the company who are
elected by stockholders, and they are given the responsibility for overseeing a firm’s top
managers such as the general manager.
Employees: Employees or the workforce, the most important element of an organization’s
internal environment, who performs the tasks of the administration. Individual employees and
also the labor unions they join are important parts of the internal environment.
External Environment: It is also referred as General Environment and indirectly affects
and organization. It can be further classified into i) Micro environment and ii) Macro
environment.
Micro environmental factors are
Customers: “Satisfaction of customer”- the primary goal of every organization. The
customer is who pays money for the organization’s product or services. They are the peoples
who hand them the profit that the companies are targeting.Managers should pay close
attention to the customers’ dimension of the task environment because its customers purchase
that keeps a company alive and sound.
Suppliers: Suppliers are the providers of production or service materials. Dealing with
suppliers is an important task of management. A good relationship between the organization
and the suppliers is important for an organization to keep a steady follow of quality input
materials.
Regulators: Regulators are units in the task environment that have the authority to control,
regulate or influence an organization’s policies and practices.Government agencies are the
main player in the environment and interest groups are created by its members to attempt to
influence organizations as well as government. Trade unions and chamber of commerce are
the common examples of an interest group.
Strategic Partners
They are the organization and individuals with whom the organization is to an agreement or
understanding for the benefit of the organization. These strategic partners in some way
influence the organization’s activities in various ways. Strategic partners can be Distributors
and Trade Unions.
Competitors: Policies of the organization are often influenced by the competitors.

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Competitive marketplace companies are always trying to stay and go further ahead of the
competitors. In the current world economy, the competition and competitors in all respects
have increased tremendously. The positive effect of this is that the customers always have
options and the overall quality of products goes high.
Macro Environmental factors are: Political (Quick change, long term change, cyclical
change and regional change), Economic (Economic factors – Ability to buy (Price, Income,
Savings, Tax etc) and Willingness to buy (Expectation, Interest, Preference), Capitalistic
economy, Social economy, mixed economy (Public, Private, Mixed and Co-operative),
communist), Economic policy (Industrial policy, FEMA, EXIM, Export promotion, MRTP,
Company Act, New Economic policy), Economic Condition (Supply of natural resources,
foreign capital, consumption, size of market, monetary structure, capital creation, rate of
interest.)), Social (Change in lifestyle, growing consumerism, concern for pollution, social
problems), Technological (Change in production system, change in life style and standard of
living, change in consumption pattern etc), International (International byelaws, Exchange
rate), Demographic (Age, gender, income, social status, choice of channel,, media),
Cultural (Decision based on value, norms, tradition, customs and background), Legal
(Indian Contract Act, Companies Act, MRTP Act, IDRA Act, FERA, Tax Laws),
Geographic (Climate, Fertility, Vegetation), Ecological (Air pollution, Water Pollution and
Noise Pollution) and Ethical (Responsible to society, Proper role in civic affairs, Law
abiding, Fair and square deal, No false information, No misleading communication, Fair
reasonable wages, Recognition of TU, Avoid adulteration, No spurious product, Good
working condition, Avoid Duplication, Avoid Exploitation, No Bribe, No corruption, No
Injurious product, No Deceptive advertisement).
Need for Existence/Why do Organization Exist? Profit Making, Betterment of Society,
Brings together resources facilitate innovation, Create value for stakeholders, Accommodate
Challenges, Increase Specialisation, use large scale technology, Economize on transaction
costs, Enjoy power and control.
Value Creation:
Value creation is the primary objectives in line with profit making. Creating value for
customers helps sell products and services, while creating value for shareholders, in the form
of increases in stock price, insures the future availability of investment capital to fund
operations.

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An organization to be successful should understand the purpose of the existence and put
value creation as the first priority. The value for customers is product and shareholders to
increase the share value. Every company should outperform competitors in this perspective.
Value can be New value, More value and Better value.
Kev Favoro states that value creation gives enormous advantage in building the company’s
ability to achieve profitable and long lasting growth. In short Value Creation is defined as
“Performances of any actions that increase the worth of Goods and Services or even a
business as a whole”
In order to create value the company should understand sources and drivers of value creation.
Process of Value Creation:
a) Organizational Input: Raw Materials, Money & Capital, Human Resource, Information and
Knowledge, Customer Service Support organization.
b) Organization Conversion Process: Transforms input and add value through machinery,
computers and human skills.
c) Organization Output: Finished goods, Services, Dividends, Salary, Value for Stakeholders.
d) Organization Environment: Customers, Shareholders, Suppliers, Distributors, Government
and Competitors.
Drivers of value creation are Technology, Innovation, IPR, Management Capabilities,

Employee relationship, Customer relationship and Brand Building.
Sources of Value Creation: a) Company Value and b) Societal Value
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a) Company Value: Decrease business risk, Enhanced Opportunities, Gaining license to

operate and grown, Increase Operational Efficiency, Attraction and Retention of talent
workforce, Maintain secrecy of operations, Increase Brand, Strategy Planning
b) Societal Value: Increase Standard of living, Self-sustaining communities, Resource
conservation, Increase work life balance, Preserving and enhancing bio-diversity, Enhanced
economic contributions and Increase Stakeholder trust.
Sustainable business through value creation: Value creation leads to sustainable business
in 4 perspectives, they are Personal sustainability, Ecological sustainability, Organizational
sustainability and Social sustainability.
Personal sustainability: Meeting personal needs, Growth, Contribution and Well-being.
Ecological sustainability: Raw material, Logistics and supply chain management and
environmental friendly buildings.
Organizational sustainability: Innovation, Talent generation, Positive Cash flow and
Building value proposition
Social sustainability: Customers, Employees, Shareholders and Community
Organizational Effectiveness (OE): Organizational effectiveness is defined as an ability of
an organization to achieve its objectives. It can be expressed in Profit, Growth, Knowledge,
Management, Process, Technology and Customer satisfaction.
 “Ability to perform function with optimum level of input and output”
 How organization is achieving outcomes that it intends to produce.
 How well they compete, how quickly they bring product, their status in community and its
attractiveness.
Metrics in effectiveness: Achieving organizational mission, quality product, quality value,
customer satisfaction, capacity for innovation, adaptation to technological change, effective
information sharing and communication, employee attraction, quality work life, developing
alliances, operational efficiency and branding.
Organizational Effectiveness and Organizational Efficiency
Effectiveness: Measure Anything, Abstract Measurement, More theoretical, Difficulty to
calculate, Doing right task.
Efficiency: Financial Measurement, Concrete measurement, More practical, Easier to
calculate, doing task in right way.

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Organizational Effectiveness Criteria: By Fortune Magazine. a) Innovativeness, b)

Investment, c) Management, d) Community, e) Corporate Assets, f) Ability to attract,
develop and maintain talented workforce, g) Financial Soundness and h) Quality Product.
Steps in OE: a) Identify Mission, b) Identify gaps - gap in people, management, knowledge,
organization, process and technology, c) Building Effectiveness and d) Assessing OE: a)
Setting standard based on experience and goals, clarity in standard and identify cause and
effect relationship and b) Selecting Indicators – 3 basic indicators, they are outcome (not
immune to measurement ambiguity – yard stick), processes (Conformity to given objective)
and structure (Capacity of organization and licensing system).
Outcomes – For which operations are performed: Outcome focus on materials or objects
on which the organization has performed some operation. These are the most common
effectiveness measurements, but can be the most difficult to define and measure and are not
immune to ambiguity and measurement error.
Processes
Process measures assess effort rather than effect. Some measure work quantity or quality.
Though they are in some respects a more pure measurement of organizational performance,
they are an assessment of conformity of a given objective that can be decoupled from output
performance (and ultimately survival itself). Substituting process criteria for outcome criteria
can compromise service in some situations though.
Structures – Capacity of an organization
"Structural indicators assess the capacity of the organization for effective performance”.
These are often including organizational features (equipment age or type) or participant
characteristics (degree attained, licensing, etc.).
Components of OE: a) Official Goals and b) Operative Goals.
a) Official Goals: Guiding principles that the organization formally states in its annual report
and other public documents. It is a layout of why organization exists. It covers mission of an
organization.
b) Operative Goals: It is a specific long term and short term goals that guides manager and
employees as they perform the work of an organization. Operative goals is summation of
goals of a) External Resource Approach, b) Internal System Approach and c) Technical
Approach.
Measuring OE/ Ways to assess OE: a) Goal Accomplishment, b) Resource Acquisition, c)
Internal Processes and d) Strategic Constituencies.
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a) Goal Accomplishment/Rational goal approach/Goal Attainment approach:Concern

with profit and efficiency
Results compared with objectives. Any deviations in achievement, organization has to go for
Corrective action. Mechanistic, planned, logical, goal seeking, concerned with one or more
predetermined goals, concerned with levels of output, focus on internal objectives like profit
enhancement and efficiency maximization.
 Goals are set as standards of assessing OE is challenging as there are numerous goals.
 Goals should be SMART.
 Accomplishment is an end rather than means.
 The real challenge is identification of goals than achievement.
 Barriers to Goal Approach are: Not SMART, unwillingness to raise or lower goals, Setting
too many goals and focusing too much on goals.
 It has its origins in the mechanistic view of the organization.Goal approach is worried with
the output side and whether or not the organization attains its goals with respect to preferred
levels of output. It sees effectiveness with respect to its internal organisational objectives and
performance. Typical goal-attainment factors include profit and efficiency maximization.
 The key constraint of this approach pertains to the content comparability of organizational
goals. Therefore, organization formal goals are typically dependent upon its standards of
social desirability. As goals are dynamic, hence they will probably change as time passes,
simply because of the political make-up of an organization. Organization short-term goals are
usually not the same as their long term goals. The utilization of goals as a standard for
assessing Organizational Effectiveness is challenging. The goal approach presumes
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consensus on goals. Considering the fact that there are numerous goals and varied interests
inside an organization, consensus, is probably not possible.
b) Resource Acquisition approach/System approach considers input factors like raw material,
labour, capital, managerial leadership and technological modernity.Emphasis on Input
 Acquires needed resources, connection between inputs and output
 Resource as one element in more complex set of criteria
 Interact successfully with external environment.
 Assumptions: Inter related sub parts, Performance of one sub part affects another,
effectiveness also affected by awareness and interaction, management maintains good
relation, vacancies immediately replaced and changes are anticipated and reaction
appropriately.
 Limitations: Means as goals and difficult to quantify.
 This approach to Organizational Effectiveness was developed in response to the goal
approach. The System Resource Approach sees an organisation as an open system. The
organization obtains inputs, participates in transformation processes, and generates
outputs. This approach emphasizes inputs over output. It sees most organizations as entities
which function in order to survive, at the same time rivaling for scarce and valued
resources. It assumes that the organisation consists of interrelated subsystems. If any sub-
system functions inefficiently, it is going to influence the performance of the whole system.
 The disadvantages of this approach relate to its measurement of means. An issue with this
approach is that a higher amount of obtained resources is not going to promise effective
usage. In addition, it is tough to define an ideal degree of resource acquisition across
distinct organizations.
c) Internal Processes: efficiency measured by employee loyalty, commitment, job
satisfaction and mutual trust. It is place where people are emotionally present with one
another with authentic communication and commitment to transparency.
 Internal activities
 Fixed output
 Assess internal organizational health.
 Efficiency is the capabilities to get better at internal efficiency, co-ordination, commitment
and employee satisfaction.
 Criticism: Few claims that it is not legitimate indicators.

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 This approach has been developed in response to a fixed output view of the goal approach. It
looks at the internal activities. Organizational effectiveness is assessed as internal
organizational health and effectiveness. According to Internal-Process
Approach effectiveness is the capability to get better at internal efficiency, co-ordination,
commitment and staff satisfaction. This approach assesses effort as opposed to the attained
effect.
 Some experts have criticized the internal-process approach, like the system-resource
approach, cannot lead to legitimate indicators of organizational effectiveness itself. Rather, it
is accepted as an approach for studying its assumed predictors. Similar to the system-resource
approach, the internal-process approach could possibly be applied only where comparable
organizational outcomes can be assessed accurately.
d) Strategic Constituencies states that it is an organization made up of people and for people. It
is a group of people who have some stake in the organization and whose co-operation is
essential for organizational survival.
 Support from environmental factors both internal and external.
 Demand of those constituencies in its environment whom it needs support for its survival.
 Efficiency to satisfy multiple constituencies both internal and external.
 Rely highly on response to demands
 Organization fulfils multiple goals
 Job of isolating strategic constituencies is challenging and tricky
 Diverse factors or weigh the same criteria in different way.
 Only those environment which can threaten the organizational survival are considered.
 Assumptions: Organization should give importance to constituencies.
 Each constituencies has unique set of values.
 This approach suggests that an efficient organisation is one which fulfils the demands of
those constituencies in its environment from whom it needs support for its survival. It
assesses the effectiveness to satisfy multiple strategic constituencies both internal and
external to the organization. Strategic Constituencies Approach is ideal for organizations
which rely highly on response to demands. The Strategic-constituencies approach takes
explicitly into consideration that organizations fulfil multiple goals: each kind of
organizational constituency (like proprietors, workers, consumers, the local community, etc.)
is supposed to have distinct interest’s vis-à-vis the corporation, and will thus use different
evaluation criteria.
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 However, the job of isolating the strategic constituencies from their environment within
which they function is a challenging and tricky task. Because the environment swiftly
changes, what was a crucial goal today might not be so tomorrow. Individual constituents
may create significantly diverse ratings of organizations effectiveness. These constituents
may use diverse factors or weight the same criteria in a different way.
Approaches to OE: a) External Resource Approach, b) Internal System Approach and c)
Technical Approach.
a) External Resource Approach: Control External Environment and also control resources
and skills.
 To evaluate the organization’s ability to secure, manage and control scarce and valued skills
and resources.
 A method managers use to evaluate how effectively an organization manages and control
its external environment.
 In this approach, to measure effectiveness they use indicators such as stock price,
profitability and Return on investment.
 They compare organization performance with the performances of other organization.
 The stake holders are supplier, competitors, customers and government.
 Goals of External Resource Approach are Lower cost of input, obtain high quality inputs
of raw material and employees, increase market share, increase stock price and gain support
of stakeholders.
b)Internal System Approach: It is used to evaluate organization ability to be innovative
and to function in responsible manner.
 A method that allows manager to evaluate how effectively an organization function and
operate resources.
 To be effective an organization needs a structure and culture that foster adaptability and quick
responses.
 Speed up Decision making
 Structure of an organization, Culture, Flexibility, Co-ordination and Motivation are
components of internal system approach.
 Goals of Internal System Approach are decrease decision making time, increase rate of
production and innovation, increase co-ordination and motivation of employees, decrease
conflict, decrease time to market.

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e) Technical Approach: It deals with how resources are converted into finished goods and
services.
 Converting skills and resources into effective services.
 It is measured in terms of a) productivity – expressed in terms of input output relationship
and b) efficiency.
 Goals of Technical approach are increase product quality, decrease number of defects,
decrease production costs, increase customer service and satisfaction and decrease delivery
time.
BEST APPROACH: The best method of assessing OE depends on contingent and
constituent factors, even communication and equipment plays vital role.
 The balance between all the above approaches are indispensable. The organization will be
effective when it satisfies multiple performance criteria by different approaches or measures.
 Small organization little formalization is required and for large organization formalised
structure is applied.
 Overall it should focus on Increase return on investment, increase market share, innovation
and job security.
 Assumptions: OE is subjective, No best criteria and no single goal.
An Integrated Effectiveness Model
Competing values model: tries to balance a concern with various parts of the organization
rather than focusing on one part. It combines several indicators of effectiveness into a single
outcome.
a. Indicators: whether the focus lies on internal or external environment and the structure
emphasizes stability or flexibility.
b. Usefulness: The model integrates diverse concepts of effectiveness into a single
perspective. The model calls attention to effectiveness criteria as management values and
shows how opposing values exist at the same time.
X axis – Focus – Internal to External, Y axis – Structure – Flexibility to Stability.
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Internal and Flexible - Clan Culture – Human Relation Model, Autonomy, most
collaborative, least competitive.
External and Flexible – Adaptability Culture – Open System Model, Readiness.
External and Stable – Mission Culture – Rational Goal Model, Planning, Goal Setting
Internal and Stable – Bureaucratic Culture – Internal Process Model, Quick Decision
Making, Efficient Communication.
INCREASING EFFICIENCY IN SERVICE INDUSTRY
 Service sector introduction and contribution.
 Productivity Improvement.
 Developing HR competency, involvement and commitment of people.
 Success depends on HR competencies, adequately trained.
 Ensure their knowledge remain relevant and useful.
 Outperforming companies spend 4-5% of cost and 40-50 hours/year on training.
 Innovative and Creative circles.
 Quality control circles.
 Customer focus, customer requirement and customer expectation
 Close relationship through contacts and customer survey
 React to feedback.
 Seeking opportunities to delight customers
 Personalised services
 Apply information communication technology
 Balance Scorecard
 Productivity Measurement: a) Partial Factor productivity measurement: Input to output ratio
and b) Multi factor productivity measurement: output to multiple input factor, output to
labour, capital etc.
Tips to increase OE:
1. Provide employee with secure consistent access to information.
2. Deliver anytime and anywhere
3. Create effective business process with strategic partners.
4. Make it easy to collaborate.
5. Enables employees to take their system wherever they go.
6. Reduce unproductive time and movement.
7. Outsource IT tasks.
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8. Streamline communication with customers.

9. Increase employee retention and satisfaction.
10. Develop a long term technology plan.
11. Increase market share
12. Decrease turnover
13. Understand mission
14. Supportive workforce policies
15. Flexible policies
16. Work environment
17. Positive supervisory policies
18. Adhering to deadlines
19. Decrease cycle time
20. Increase response
21. No backlogs
22. Decrease absenteeism
TRADITIONAL TO MODERN FORMS OF ORGANIZATION
Organization Structure: How activities such as task allocation co-ordination and
supervision are directed towards achievement of organizational aims.
Traditional: Top-down, chain of command, little open communication. Profit as bottom line,
department wise specialisation and repetitive task. Disadvantage: Excessive fragmentation of
critical process, may lead to inter functional rivalry, Management bureaucracies, Slow
response time due to centralized structure, Concentrate more on individual function than on
organization as a whole.
Modern Organization: Dynamic communication, rely on employee involvement, distribute
authority, organic structure. Advantage: Networking and collaborating, rapid and innovation,
ideal for growing technological up-gradation and autonomy of internal units.
TRADITIONAL ORGANIZATION:
A) Simple Structure: Low Departmental, Wide span of control, Centralized authority, Little
formalization. Suitable for small business and start-ups.
B) Functional Structure: Basic, Organization divided into functional units, operates based on
early management, specialisation, line & staff relationship, span of control, authority and
responsibility. Eg: Under president, there will be VP Research, VP Manufacturing, VP
Engineering, VP Marketing, VP HR, VP Finance.
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Advantages: Promote specialisation and Suitable for small organization only.

Disadvantage: Routine Tasks, focus on own task and lead to conflict.
C) Divisional Structure: It is also called as Self-contained units. It can be grouped based on
Product, Customer or Geography. Eg: President, Next level VP product A, VP Product B,
then under product category Manager Sales, Manager Manufacturing etc.
Advantage: Co-ordinate towards specific outcome, departmental accountability, adapts well
to uncertain condition.
Disadvantage: Promote allegiance (loyalty to superior than to organization)
D) Matrix Structure:
i) Formed with maximum strength and minimum weakness of functional and divisional
structure.
ii) Horizontal structure focuses on product/project co-ordination on vertical functional structure.
iii) Manager to focus on lateral relationship between function to develop a flexible and adaptable
system of resources
iv) Procedures to achieve series of project organization.
v) 3 unique and critical roles: a) Top manager (who heads and balances the dual chain of
command), b) matrix bosses (Functional boss/Product boss/Area boss – they are one who
share sub ordinates) and c) two boss managers’ report to two different leaders – two boss
manager – Accomplish technical sophistication on one hand and to meet customer
expectation.
Advantage: Specialisation, functional knowledge, can have new product & new projects by
moving people easily, consistency among department.
Disadvantage: Difficult to manage, heavy managerial cost & support, role ambiguity and
conflict, power conflict between functional department and project structure.
Matrix structure is appropriate when: a) there is a pressure for shared resources (When
customer requirements greatly varies and technical requirements are strict and Human
Resource is scarce), b) Organization process large amount of information (external
environment change unpredictably, organization produce broad range of product, technology
evolves quickly, considerable complexity in decision making and pressure of communication
and pressure of co-ordination), c) Real pressure outside for dual focus i.e., unique demand
and strong technical specification.

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E) Process Structure: Multidisciplinary team around core process. It eliminates many

hierarchical structure and reduces cost. Process wise structuring. Under president we have
management process team, NPD team, Talent Acquiring team and Support process team.
Advantage: Focused resources on customer satisfaction, increase speed and efficiency,
adapts to rapid environmental change, reduce boundaries and increase employee
involvement.
Disadvantage: Threaten staff specialist, requires change in command, duplicates scarce
resources, longer decision making, ineffective if wrong processes are identified.
F) Network Structure: Also called as Pizza Structure, Spider web Structure, Star Burst
Structure.
Diverse in nature, Complex and dynamic relationship, each specialise on particular business
function or task. Less formal manner.
Types of Network Structure:
i) Internal Market Network: Single Organization, Stable and Single Industry Structure.
Each sub unit is treated as independent profit centre.
ii) Vertical market network: Multiple organization to focal organization Co-ordinates raw
material to consumers.
iii) Inter-market network: Alliance of variety of organization in different market.
iv) Opportunity network: Temporary, multiple organization and several different industries.
For single purpose.
Advantage: Highly flexible and adaptable to environment, creates best of the best
organization to focus resources on customer and market needs, enable each organization to
leverage distinctive competency, rapid global expansion and synergise result.
Disadvantage: Managing lateral relationship is difficult, no autonomy, no sustenance of
members and difficult to manage complex structure.
ADVANTAGES OF TRADITIONAL ORGANISATION
a) Centralized control of strategic results
b) Very well suited for structuring a single business
c) Structure is linked tightly to strategy by designating key activities as functional departments
d) Promotes in-depth functional expertise
e) Well suited to developing functional skills and functional based competencies
f) Conducive to exploiting learning/experience curve effects associated with functional
specialization
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g) Enhances operating efficiency where tasks are routine and repetitive

DISADVANTAGES OF TRADITIONAL ORGANISATION
Excessive fragmentation of strategy-critical processes
Can lead to inter-functional rivalry and conflict, rather than team-play
Multi-layered management bureaucracies and centralized decision-making slow response
time
Hinders development of managers with cross-functional experience because the ladder of
advancement is up the ranks within the same functional area
Forces profit responsibility to the top
Functional specialists often attach more importance to what's best for the functional area than
to what's best for the whole business - can lead to functional empire-building
Functional myopia often inhibits creative entrepreneurship, adapting to change, and attempts
to create cross-functional core competencies.
FORMS AND TRENDS RELATING TO NEW ORGANIZATION
a) Spaghetti Organization: Boundaryless, Coined by GE chairman Jack welch, Eliminate
chain of command, Limit less span of control, eliminate vertical and horizontal boundaries,
status and ranks minimized and 360 degree performance appraisal.
Advantage: fast Decision making, participative decision making and job rotation.
Disadvantage: Superior subordinate relationship not clearly defined, confusion in who is
responsible.
b) Amoeba: Spin off into another business
Advantage: Flexibility, motivates employees
Disadvantage: Lack of middle management, may lack co-operation.
c)Tall Organization: Increase in length, Chain of command, authority and relationship.
Advantage: Efficient Decision making, better communication, enhances co-ordination of
functional areas
Disadvantage: Too many hierarchy, too much centralization and delayed process of decision
making
d) Inverted Pyramid: Customer at top followed by front line employees, supporting staff
and CEO, Increase relationship and business.
Advantage: First preference to customers, Front line workers responsible, decentralized
decision making and employee interest better than management interest.
Disadvantage: Confused control, Front line can’t make strategies.
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e) Orchestra Model: Bureaucratic command and control, high level of integrated effort,
CEO at top management then directly employees, Clear translation into actions, clear
performance expectation.
Advantage: high co-operation and co-ordination, flow of information is perfect.
Disadvantage: Perfect synchronization is difficult, authority not clearly defined.
f) Cluster Organization: Each group consist of people from different functional area.
In total 30-50 members. Each cluster interlocked with CEO at centre.
Advantage: well defined responsibility, Individual work and team work
Disadvantage: Semi permanent, may be depress due to instability, Jack of all master of none,
lack of formal hierarchy.
g) Autonomous Internal Unit: Independent Decentralized business units with own product,
clients, competitors and profit goals.
h) Learning Organization: Organization culture for sharing knowledge and information,
continuous learning and adapts change.
i) Strategic Business Units: SBU is a profit centre which focuses on product offering and
market segment. It have discrete marketing plan, analysis of competition and marketing
campaign. Even though they may be part of larger business entity under specific executive.
ADVANTAGES OF MODERN ORGANISATION
1. Organizations are networking together and collaborating more than ever before.
2. They are well-suited for rapid innovation and therefore ideal for companies in the
growing technology industry.
3. Boundaryless structures achieve incredible flexibility by removing geographical and
communication boundaries.
4. In autonomous internal units, large companies are comprised of small business units
with no centralized control or allocation of resources.
5. Network structures link many separate organizations together to complete a goal that
benefits all. Virtual organizations rely almost entirely on Internet, phone or email
communication and require little face time.
DISADVANTAGES OF MODERN ORGANISATION
1. Matrix structures take the basic structure of function organization and augment its
flexibility with project design.

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2. Team-based designs are considered unstable, so the functional structure attempts to

balance the project goals with technical ones. Teams decide the type of work and its costs,
and technical goals focus on the quality of the work accomplished.
RECENT TRENDS IN ORGANIZATION:
Globalization, Diversity, Flexibility, Flat, Networking and Collaborating, Rapid Innovation,
Autonomous Internal Units, Outsourcing, Change in work organization Change in work
control, change in employment practices, New work time arrangement, change in pay
systems, change in technology, focus on customers closing gaps between good and bad jobs,
Global vs local, Heterogeneity vs Homogeneity, Flexible vs Stable, Internal vs External,
Centralization vs Decentralization, Interdependence vs Independence, Industrial Era to
Information Era, National Economy to Global Economy, Technological development to
Technological sophistication, Stability to Turbulent change, Hierarchy to Networking,
Emphasis on continuity to Emphasis on change.
IMPORTANT UNIVERSITY QUESTIONS
PART A
1. Organizational Effectiveness
2. Approaches to OE
3. Why measuring OE is important?
4. Define Organization and features of Organization.
5. Value Creation.
6. Need for existence of Organization
PART B
1. Organization Effectiveness – Criteria, Steps, Methods and Approaches. Which approach is
best?
2. Organization Environment.
3. Value Creation.
4. Measuring OE for Service Industry.
5. Traditional and modern forms of organization. Forms and trends relating to New
organization.

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UNIT II – ORGANIZATIONAL DESIGN

Organizational Design: It is also called as Architecture of an organization. It is a framework
through which an organization aims to realise core qualities (Vision statement).
Design of Organization Structure: 3 things
1. Define Work Activities: task to be performed.
2. Reporting Relationship: chain of command
3. Departmental grouping options: functional grouping, divisional, horizontal, geographic,
product, area, time
Model of Organizational Design: Galbraith’s Star Model of Organizational Design – 5
components:
a) Strategy: Vision, Competitive Advantage, Corporate Governance.
b) Structure: Power & authority, information flow, organizational roles.
c) Business Processes and Lateral links: Network Processes, teams.
d) Reward System: Compensation and Rewards.
e) HRM: hiring and feedback.
Characteristics of effective Organizational Design:
1. Simplicity: Communication of Information
2. Flexibility: Adaptability can be of two types: a) New and b) Modify
3. Reliability: Consistency
4. Economy: Effective & Efficient
5. Acceptability: modify gradually or it will fail ultimately
First 3 deals with design and last 2 deals with design and operations
Determinants of OD:
A) Fundamental Determinants: a) Context and b) Design
a) Context: Situation of Organization.
b) Design: Action regard to Structure, i) Strategic Choice and Institutional Isomorphism.
i) Strategic Choice: Designing a structure by organization itself.
ii) Institutional Isomorphism: Making use of already existing organizational forms.
Types of Institutional Isomorphism: a) Coercive Isomorphism (Due to pressure of
government, culture etc. and coercive forces impose standardization), b) Mimetic
Isomorphism (Organizational models that intentionally imitates and copy) and c) Normative
Isomorphism (workforce and management indirectly they adopts, eg: recruiting manager
from same industry).
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B) Contextual Determinants: a) Internal and b) External.

a) Internal: i) Organizational Size (Number of people, resources, physical capacity, input and
output), ii) Technology (act of changing one state to another) and iii) Organizational Culture
(pattern of shared beliefs, values, assumptions, norms etc)
b) External: i) Environment (PEST analysis) and ii) National Culture
Components of OD: SIX components:
A) Work Specialisation:
a) Job design: It is the first building block of organization Structure; it means-defining an
individual’s responsibilities in work. Job design involves defining areas of decision-making
responsibility, identifying goals and expectations, and establishing appropriate indicators of
success. There many tools available to a manager for designing jobs.
b) Job Specialization: Job specialization is the first and the most important tool of all. Job
specialization is similar to the concept of ‘division of labor. Job specialization means;
breaking down the entire job or task into smaller parts and divide them accordingly.
c) Job characteristics model (JCM): Job characteristics model (JCM) is also and effective tool
for designing job; where job-design is conduct considering both the employees’ preference
and required work system. The approach suggests that job design should be done by
considering five core dimensions; skill variety, task identity, task significance, autonomy, and
feedback.
d) Work Teams: Work teams are very useful for doing comprehensive and difficult jobs which
require expertise from various departments or faculty or the organization.
e) Job Rotation: As the name suggests; job rotation is systematically moving employees from
one task to another. However on practice; job rotation created more problems than solving
them, like; employees’ satisfaction and motivation diminishes. It is now used as a training
system.
f) Job Enlargement: Job enlargement involves increase the total number of tasks workers
assigned and performs. It also gives employees motivation as it gives them bigger chance to
participate in organization’s operations. It has some shortcomings too; more tasks mean more
salary payments so more cost, overdoing it could lead to employees’ dissatisfaction.
g) Job Enrichment: It is similar to job enlargement but a more comprehensive approach. Job
enrichment includes increasing the number of tasks and the portion of control over these
tasks. Here managers have to give authority along with the responsibility of the jobs.

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B) Chain of Command: Line of authority, upper to lower, Authority (Rights), Responsibility

(Obligations/Duties) and Unity of Command (One to One relationship)
Chain of command shows clear distinct line of author among the positions and span of
management indicates the number of people who report to a particular manager. Here; the
organization’s hierarchy, its positions and lines are defined.
Distributing Authority
Distributing Authority is another important building block in structuring organizations.
Authority in organization is the right in a position and, through it, the right of the person
occupying the position to exercise discretion in making decisions affecting others.
Authority is power that has been legitimized by the organization. Here; the determination of
how authority is to be distributed among positions. Distributing authority in organization
means; giving decision power to employees.
That’s why proper distribution of authority throughout the organization is required for the
smooth sailing of the organization. Two specific issues that managers must address when
distributing authority they are; delegation and decentralization.
C) Formalization: Degree to which the jobs are standardised. It refers to the degree to which
jobs within the organization are standardised and the extent to which employee behaviour is
guided by rules and procedures. Written rules and procedures.
Formalization is the extent to which rules and procedures are followed in an organization.
This element varies greatly across organizations. For example, in some organizations arrival
and departure times to and from work are specified to the minute, with time clocks used to
control deviant behavior. In other organizations it is understood that employees will spend
sufficient time on the job to get the work done. In some organizations rules and procedures
cover most activities, while in others people are allowed to exercise their own judgment.
In assessing the degree of formalization, one needs to use care. In some organizations many
rules are codified in huge manuals, but no one pays attention to them. In others little is
written down, but rules are informally understood and followed. Thus the most useful
definition of formalization is that it represents the use of rules in an organization. The degree
to which rules are followed—not the degree to which they are codified—is the key factor.
Organizations use formalization to increase their rationality. In one sense formalization is an
attempt to make behavior more predictable by standardizing it. Standard procedures for
production workers or quality control checklists that must be used and submitted before a
product can be shipped are examples of this kind of formalization.
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Formalization may also be an attempt to make explicit and visible the structure of
relationships among organizational participants. It can establish status differences among
organizational members in a way that is objective and external to the participants themselves.
Formalization makes the process of succession routine and regular so that people can be
replaced when necessary with minimal disturbance to an organization's functioning. The
orderly selection of cardinals and popes in the Roman Catholic Church and the succession
plan for the U.S. presidency are good examples of this function of formalization.
Alongside formal structures are aspects of organizations that are not formally planned but
that more or less spontaneously evolve from the needs of the people. Thus, formal structures
are the norms and behaviours that exist regardless of individuals; informal structures are
interactions based on the personal characteristics or resources of the individuals involved.
Informal structures are not without form; those forms are not determined simply by the
organization but grow out of the relationships of the participants. Informal life is structured
and orderly; it simply reflects the hearts and minds of an organization's members.
Formalization in one area of an organization brings about pressures for less formalization in
other areas. Formalization is influenced by technology, size, and organizational traditions.
One can categorize technologies as routine and non-routine. Organizations or work units in
which work is routine are more likely to be highly formalized than those in which
technologies are less routine.
Obviously, size influences formalization. Large organizations have greater needs to formalize
their activities than do small organizations. As rules will need to be created—and probably
codified—to accommodate the increased relationships and interactions involved.
Tradition also influences formalization. If an early top executive believed that rules and
procedures should he followed to the letter, this set of beliefs was codified into the
organization's procedures manuals. The organization would then remain more formalized
over time than existing conditions might have predicted.
D) Departmentalization: Dividing large monolithic functional organization into small
manageable units. In simple words grouping of similar activities. Increase efficiency, fix
responsibility, increase prestige, scope for expansion and aims at specialisation.
Departmentalization is grouping of jobs according to some logical arrangement, the second
building block of organization structure. Departmentalization refers to the formal structure of
the organization, composed of various departments and managerial positions and their
relationships to each other. As an organization grows, its departments grow and more sub-
23
units are created, which in turn add more levels of management. This often creates less
flexibility, adaptability, and units of action within the firm. Departmentalization is the
efficient and effective grouping of jobs into meaningful work units to co-ordinate numerous
jobs—all for the expeditious accomplishment of the organization’s objectives. There are
several bases for departmentalization. Common bases are;
a) Functional: Functional departmentalization groups together those jobs involving the same or
similar activities. Here; word ‘function’ indicating organizational functions such as finance
and production, rather than the basic managerial functions, such as planning or controlling,
manufacturing, finance, and marketing departments, each an organizational function.
Advantage: Co-ordination and Specialisation
Disadvantage: Poor communication and limited goals
b) Product: Product departmentalization, involves grouping and arranging activities around
products or product groups. Departmentalization by product: This method places all the
resources and authority under one manager to get a product manufactured and marketed.
Advantage: Specialised Product and Expert knowledge
Disadvantage: Duplication and limited goals
c) Geographical: Location departmentalization logically groups jobs on the basis of defined
geographic sites or areas. The defined sites or areas may range in size from a hemisphere to
only a few blocks of a large city.
Advantage: Handle regional issue and understand geographical requirements
Disadvantage: Duplication and feels isolated
d) Process: Departmentalization by process is preferable when the machinery or equipment
used requires special skill for operating, or is of a large capacity which eliminates
organizational dividing, or has technical facilities which strongly suggest a concentrated
location.
Advantage: Efficient flow
Disadvantage: Only for certain products
e) Customer: Customer departmentalization organizational form is used when great emphasis is
placed on effectively serving different customer types. For instance, full-time day students
and part-time night students of graduate business programs in universities usually are
different in demographic profile and personal needs.Wholesale and retail publics are very
different in many industries, as are government and private sector customers. So; here the
organization structures its activities to respond to and interact with specific customer groups.
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Most banks are commonly designed to meet the needs of different kinds of customers;
business, consumer, mortgage, and agricultural loans.
Advantage: By specialist
Disadvantage: Duplication and limited goals
f) Departmentation based on Time: Shift basis.
D) Centralisation and Decentralisation
Centralisation: Decision making at top, Stable environment, Lower level not capable,
Significant decision, Company is large, Effectiveness depends on managers.
Decentralisation: All activity within, complex environment, capable lower level
management, not much significant decision, company is dispersed and depends of
effectiveness of all.
Factors affecting Centralisation or Decentralization: a) Size and Complexity (Large or
small), b) Dispersal of Operations: (Unified or Scattered), c) Diversification (Diverse Product
or Standardised Product), d) History of Enterprise (Original or Amalgamated), e) Outlook of
Top Management (Conservative or Freedom), f) Availability of Competent Personnel
(Available or Not available), g) Nature of Function (Production and Sales – Decentralise,
Finance and Research & Development - Centralised), h) Communication System (Oral or
Written), i) Planning and Control (Tool available or Not available), j) Complexities of
situation (Simple or Complex), Rate of Change (Increase or Decrease), k) Environmental
Influence (Heavy or Low)
E) Span of Control: Span of Management/ Span of Authority/Span of Supervision.
No of people managed effectively by single superior.
L Urwick have given an ideal number: 4 in top management, 8 in middle management and 12
in bottom management.
Direct Single Relationship (n), Direct Group Relationship n(2^n/2 – 1), Cross Relationship
(n(n-1)), Total = n(2^n/2 + n -1).
Factors in Span of Control:
i) Characteristics of work: Standard or Complicated.
ii) Qualities of sub ordinates:
iii) Leadership qualities
iv) Time Availability
v) Mode of work: Manual/Machine
vi) Delegation
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vii) Using of Standard

viii) Method of Communication
ix) Degree of Planning
x) Degree of Decentralisation
xi) Characteristics of Superior
Graicuna’s Theory of Span of Management
A management expert named V.A. Graicunas contributed much to the span of management
theory. This theory identified the relationship prevailing between the supervisor and the
subordinates. The relationships are classified into three categories. They are given below:
1. Direct single relationships
2. Direct group relationships
3. Cross relationships
1. Direct single relationship:
It is one in which a supervisor has direct relationship with his subordinates individually. If A
supervises B and C are subordinates, there are two direct single relationships. It is explained
with the help of the following chart.
SUPERVISOR
A
B C
SUBORDINATES
2. Direct group relationships:
In direct group relationship, a supervisor has direct relationship with his subordinates jointly.
It is explained with the help of the following chart.
SUPERVISOR
A
CONSULTATION CONSULTATION
ATTENDANCE
B C
SUBORDINATES

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Here A can consult B while C is present in a situation. In another situation, A can consult C
while B is present.
3. Cross relationship:
In cross relationship, a subordinate has relationship with another subordinate mutually. It
explained with the help of the following chart.
SUPERVISOR
A
RELATIONSHIP
B C
SUBORDINATES
Here, the relationship prevailing between B and C is cross relationship. The number of direct
and cross relationships increased geometrically as the number of subordinates under the
supervisor increased.
FORMULAS:
Graicunas (Gulick and Urwick, 1937) distinguished three types of interactions – direct single
relationships, cross-relationships, and direct group relationships – each of them contributing
to the total amount of interactions within the organization. According to Graicunas, the
number of possible interactions can be computed in the following way. Let n be the number
of subordinates reporting to a supervisor. Then, the number of relationships of direct single
type the supervisor could possibly engage into is n.
The number of interactions between subordinates (cross relationships) he has to monitor is
n(n-1)and the number of direct group relationships isn(n2/2-1)
The sum of these three types of interactions is the number of potential relationships of a
supervisor. Graicunas showed with these formulas, that each additional subordinate increases
the number of potential interactions significantly. It appears natural, that no organization can
afford to maintain a control structure of a dimension being required for implementing a scalar
chain under the unity of command condition. Therefore, other mechanisms had to be found
for dealing with the dilemma of maintaining managerial control, while keeping cost and time
at a reasonable level, thus making the span of control a critical figure for the organization.

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Consequently, for a long time, finding the optimum span of control has been a major
challenge to organization design.
Types of OD:
TRADITIONAL
A) Simple Structure: Low Departmental, Wide span of control, Centralized authority, Little
formalization. Suitable for small business and start-ups. A simple structure is defined as a
design with low departmentalization, wide spans of control, centralized authority, and little
formalization. This type of design is very common in small start up businesses. For example
in a business with few employees the owner tends to be the manager and controls all of the
functions of the business. Often employees work in all parts of the business and don’t just
focus on one job creating little if any departmentalization. In this type of design there are
usually no standardized policies and procedures. When the company begins to expand then
the structure tends to become more complex and grows out of the simple structure.
B) Functional Structure: Basic, Organization divided into functional units, operates based on
early management, specialisation, line & staff relationship, span of control, authority and
responsibility. Eg: Under president, there will be VP Research, VP Manufacturing, VP
Engineering, VP Marketing, VP HR, VP Finance.
Advantages: Promote specialisation and Suitable for small organization only.
Disadvantage: Routine Tasks, focus on own task and lead to conflict.
C) Divisional Structure: It is also called as Self-contained units. It can be grouped based on
Product, Customer or Geography. Eg: President, Next level VP product A, VP Product B,
then under product category Manager Sales, Manager Manufacturing etc. A divisional
structure is made up of separate, semi-autonomous units or divisions. Within one corporation
there may be many different divisions and each division has its own goals to accomplish. A
manager oversees their division and is completely responsible for the success or failure of the
division. This gets managers to focus more on results knowing that they will be held
accountable for them.
Advantage: Co-ordinate towards specific outcome, departmental accountability, adapts well
to uncertain condition.
Disadvantage: Promote allegiance (loyalty to superior than to organization)
D) Matrix Structure:
vi) Formed with maximum strength and minimum weakness of functional and divisional
structure.
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vii) Horizontal structure focuses on product/project co-ordination on vertical functional structure.

viii) Manager to focus on lateral relationship between function to develop a flexible and adaptable
system of resources
ix) Procedures to achieve series of project organization.
x) 3 unique and critical roles: a) Top manager (who heads and balances the dual chain of
command), b) matrix bosses (Functional boss/Product boss/Area boss – they are one who
share sub ordinates) and c) two boss managers’ report to two different leaders – two boss
manager – Accomplish technical sophistication on one hand and to meet customer
expectation.
Advantage: Specialisation, functional knowledge, can have new product & new projects by
moving people easily, consistency among department.
Disadvantage: Difficult to manage, heavy managerial cost & support, role ambiguity and
conflict, power conflict between functional department and project structure.
Matrix structure is appropriate when: a) there is a pressure for shared resources (When
customer requirements greatly varies and technical requirements are strict and Human
Resource is scarce), b) Organization process large amount of information (external
environment change unpredictably, organization produce broad range of product, technology
evolves quickly, considerable complexity in decision making and pressure of communication
and pressure of co-ordination), c) Real pressure outside for dual focus i.e., unique demand
and strong technical specification.
E) Process Structure: Multidisciplinary team around core process. It eliminates many
hierarchical structure and reduces cost. Process wise structuring. Under president we have
management process team, NPD team, Talent Acquiring team and Support process team.
Advantage: Focused resources on customer satisfaction, increase speed and efficiency,
adapts to rapid environmental change, reduce boundaries and increase employee
involvement.
Disadvantage: Threaten staff specialist, requires change in command, duplicates scarce
resources, longer decision making, ineffective if wrong processes are identified.
F) Network Structure: Also called as Pizza Structure, Spider web Structure, Star Burst
Structure.
Diverse in nature, Complex and dynamic relationship, each specialise on particular business
function or task. Less formal manner.

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Types of Network Structure: i) Internal Market Network: Single Organization, Stable

and Single Industry Structure. Each sub unit is treated as independent profit centre.
ii) Vertical market network: Multiple organization to focal organization Co-ordinates raw
material to consumers.
iii) Inter-market network: Alliance of variety of organization in different market.
iv) Opportunity network: Temporary, multiple organization and several different industries.
For single purpose.
Advantage: Highly flexible and adaptable to environment, creates best of the best
organization to focus resources on customer and market needs, enable each organization to
leverage distinctive competency, rapid global expansion and synergise result.
Disadvantage: Managing lateral relationship is difficult, no autonomy, no sustenance of
members and difficult to manage complex structure.
Modern Design
a) Spaghetti Organization: Boundaryless, Coined by GE chairman Jack welch, Eliminate
chain of command, Limit less span of control, eliminate vertical and horizontal boundaries,
status and ranks minimized and 360 degree performance appraisal. A boundaryless
organization is one in which its design is not defined by, or limited to, the horizontal, vertical,
or external boundaries imposed by a predefined structure. In other words it is an unstructured
design. This structure is much more flexible because there is no boundaries to deal with such
as chain of command, departmentalization, and organizational hierarchy. Instead of having
departments, companies have used the team approach. In order to eliminate boundaries
managers may use virtual, modular, or network organizational structures. In a virtual
organization work is outsourced when necessary. There are a small number of permanent
employees, however specialists are hired when a situation arises. Examples of this would be
subcontractors or freelancers. A modular organization is one in which manufacturing is the
business. This type of organization has work done outside of the company from different
suppliers. Each supplier produces a specific piece of the final product. When all the pieces
are done, the organization then assembles the final product. A network organization is one in
which companies outsource their major business functions in order to focus more on what
they are in business to do.
Advantage: fast Decision making, participative decision making and job rotation.
Disadvantage: Superior subordinate relationship not clearly defined, confusion in who is
responsible.
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b) Amoeba: Spin off into another business

Advantage: Flexibility, motivates employees
Disadvantage: Lack of middle management, may lack co-operation.
c) Tall Organization: Increase in length, Chain of command, authority and relationship.
Advantage: Efficient Decision making, better communication, enhances co-ordination of
functional areas
Disadvantage: Too many hierarchy, too much centralization and delayed process of decision
making
d) Inverted Pyramid: Customer at top followed by front line employees, supporting staff and
CEO, Increase relationship and business.
Advantage: First preference to customers, Front line workers responsible, decentralized
decision making and employee interest better than management interest.
Disadvantage: Confused control, Front line can’t make strategies.
e) Orchestra Model: Bureaucratic command and control, high level of integrated effort, CEO
at top management then directly employees, Clear translation into actions, clear performance
expectation.
Advantage: high co-operation and co-ordination, flow of information is perfect.
Disadvantage: Perfect synchronization is difficult, authority not clearly defined.
f) Cluster Organization: Each group consist of people from different functional area. In total
30-50 members. Each cluster interlocked with CEO at centre.
Advantage: well defined responsibility, Individual work and team work
Disadvantage: Semi permanent, may be depress due to instability, Jack of all master of none,
lack of formal hierarchy.
g) Autonomous Internal Unit: Independent Decentralized business units with own product,
clients, competitors and profit goals. Some large organizations have adopted this type of
structure. That is, the organization is comprised of many independent decentralized business
units, each with its own products, clients, competitors, and profit goals. There is no
centralized control or resource allocation.
h) Learning Organization: Organization culture for sharing knowledge and information,
continuous learning and adapts change. A learning organization is defined as an organization
that has developed the capacity to continuously learn, adapt, and change. In order to have a
learning organization a company must have very knowledgeable employees who are able to
share their knowledge with others and be able to apply it in a work environment. The learning
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organization must also have a strong organizational culture where all employees have a
common goal and are willing to work together through sharing knowledge and information.
A learning organization must have a team design and great leadership. Learning
organizations that are innovative and knowledgeable create leverage over competitors.
i) Strategic Business Units: SBU is a profit centre which focuses on product offering and
market segment. It have discrete marketing plan, analysis of competition and marketing
campaign. Even though they may be part of larger business entity under specific executive.
Challenges in OD:
Balancing 1. Differentiation vs Integration, 2. Balancing Centralisation vs Decentralisation
and 3. Balancing Standardisation vs Mutual Adjustment
Balancing Differentiation vs Integration: Differentiation in simple word means Allocation
and Integration means Co-ordination.
Differentiation:
 The process by which an organization allocates people and resources to organizational tasks.
 Establish the task and authority relationship that allows the organization to achieve its goal.
 Division of labour
 Degree of specialisation
 Simple Organization – Low Differentiation as Division of labour is low and Complex
organization – High Differentiation as Division of labour is high.
 Components of Differentiation: a) Organizational roles and Sub Units
 a) Organizational Roles: Set of task related behaviour required for a person by his or her in
an organization, increase division of labour  hire specialise people, organizational structure
based on interlocking roles, Authority- power to hold people accountable, Control -
ability to co-ordinate and motivate.
 b) Sub units: Related roles are grouped into subunit. It has two elements: i) Function and ii)
Division. i) Function: Functional sub units composes of a group of people who are
possessing similar skills and use of same kind of knowledge/tools/techniques to perform their
task working together. ii) Division: A sub unit that consists of a collection of function or
department that share responsibility for producing a particular goods or services.
 No of functions and divisions decide organizational complexity – It is degree of
differentiation.
 Types of functions in Differentiation: a) Support function (facilitates organization control
of its relation with its environment and stakeholders), b) Production function (Increase
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efficiency of an organization conversion process), c) Maintenance function (to keep

department in operations), d) Adaptive function (to adjust change in environment) and e)
Managerial function (Control and co-ordination of activities within and among department)
 Types of differentiation: a) Vertical Differentiation and b) Horizontal Differentiation
a) Vertical Differentiation: hierarchy (hierarchy means classification of people according to
authority and rank) of authority and creates opportunity relationship.
b) Horizontal Differentiation: way in which organization groups organizational tasks into roles
and roles into subunits.
Integration: The process of co-ordinating various tasks, functions and divisions so that they
work together a not at cross purposes.
Integrating Mechanism: Order of Increasing Complexity hierarchy of authority (through
ranking of employees by whom to report), direct contact (face to face co-ordinate), liaison
role (co-ordinating with other units), task force (temporary committees to co-ordinate), team,
integrating role (co-ordinate 2 or more divisions) and integrating department (have new
department to co-ordinate activities).
Balancing Differentiation and Integration: Carefully guide the process of differentiation so
an organization builds the core competencies that give Competitive Advantage and carefully
integrates the organization by choosing appropriate co-ordinating mechanism that allows
subunits to co-operate and work together to strengthen its core competencies.
Balancing Centralization and Decentralization:
Centralisation: Decision making at top, Stable environment, Lower level not capable,
Significant decision, Company is large, Effectiveness depends on managers.
Decentralisation: All activity within, complex environment, capable lower level
management, not much significant decision, company is dispersed and depends of
effectiveness of all.
Factors affecting Centralisation or Decentralization: a) Size and Complexity (Large or
small), b) Dispersal of Operations: (Unified or Scattered), c) Diversification (Diverse Product
or Standardised Product), d) History of Enterprise (Original or Amalgamated), e) Outlook of
Top Management (Conservative or Freedom), f) Availability of Competent Personnel
(Available or Not available), g) Nature of Function (Production and Sales – Decentralise,
Finance and Research & Development - Centralised), h) Communication System (Oral or
Written), i) Planning and Control (Tool available or Not available), j) Complexities of

33
situation (Simple or Complex), Rate of Change (Increase or Decrease), k) Environmental

Influence (Heavy or Low)
Balancing Standardization and Mutual Adjustment
Standardization: Conformity to specific models or examples, defined by sets of rules of
norms, that are considered proper in given situation.Formalization: Degree to which the jobs
are standardised. It refers to the degree to which jobs within the organization are standardised
and the extent to which employee behaviour is guided by rules and procedures. Written rules
and procedures.
Mutual Adjustment: the compromise that emerges when decision making and co-ordination
are evolutionary processes and people use the judgement rather than standardised rules to
address a problem. Socialization: Process by which organization members learn a) norms
(standard/styles of behaviour that are considered acceptable or typical for group of people)
and b) rules (formal written statements that specify the appropriate means for reaching
desired goals)
Balancing: Designing a structure that achieve the right balance standardization and mutual
adjustment.
Problems in OD: Unworkable Job, Politics, Over regulations and procedure, Applying for
your own job and cultural clashes.
Mechanistic and Organic Organizational Structure
Mechanistic Structure: Specialised differentiation of functional task. Structure that designed
to induce people to behave in predictable, accountable ways. Decision making is centralised,
Close supervision, Vertical hierarchy. One to one correspondence, Individualistic
specialisation, simple integrating mechanism, centralization, standardisation, simple
structure, low differentiation, low integration, centralised decision making.
Organic Structure: Promote flexibility, people initiate change, adapt to change, Decision
making is distributed - decentralised decision making, complex integrating mechanism,
decentralisation, mutual adjustment, complex structure, high differentiation, high integration.
S.No Mechanistic Organic
A Individual specialisation Joint
B Employee work separately Work together
C Simple Integrating mechanism Complex
D Hierarchy of authority well defined Not
E Centralised Decision Making Decentralised
F Communication is Vertical Lateral
G No delegation Authority to control is delegated
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H Standardization Mutual Adjustment

I Operating procedure Unpredictable
J Authority Face to face contact
K Written Communication Verbal Communication
L Status out of size Status out of brilliance
M Network of position corresponding to task Correspondence to people
N Instruction must be followed Task is important than instructions
O Communication and control through May not adhere to hierarchical
hierarchical routes routes
P Low Differentiation High
Q More emphasis on task More emphasis on goals
R Problem solving by top Encourages all employees
S Management is better capable of Decision All employees are capable
making
T No empowerment of employees Employee empowerment
U Division of labour by functional Division of labour by teams
specialisation
V Selection and promotion based upon Selection and promotion based
technical competence upon managerial competence
W Bureaucratic atmosphere Collegial atmosphere
X Rigid boundary Flexible boundary
Y Rigid Departmentation Flexible Departmentation
Z Clear chain of command Based on demand
AA High formalisation Low
AB Many rules Few rules
AC Strict hierarchy Relaxed hierarchy
AD Narrow span of control Broad
AE Close supervision Supervision is minimal
Technological Impact of OD
Enable virtual structures and more analytical views, create competitive structure. Almost
every business use technology, buying laptop. It has effect on training on technology, CRM,
cost, growth, customer need.Eg: Virtual Organization (Eg: whatsapp group).
Definition of Technology: It is defined as “the combination of skills, knowledge, abilities,
techniques, materials, machines, computers, tools and other equipment that people use to
convert raw material and new ideas into valuable goods and services” – Jones.
Technology increases overall efficiency and decreases cost. Labour substitution, outsourcing
and reduction in layers of management.

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Progression in computers and technological enhancement increases efficiency. New

customized software programs. Web based business. CRM, Growth – Geographic region
expanded and spreaded out. Customer need: After sale service specialised product.
Electronic impact increases productivity, facilitates structural change, encourages virtual
organization, communication mode. Knowledge of technology also increases organizational
performance, Innovation and change, Training and development, Information superior high
way.
Technology is an important factor to consider in organizational design. Modern organizations
can be treated as complex and adaptive systems that include a mix of human and
technological interactions. Organizations can utilize technological tools to enhance
productivity and to initiate new and more efficient structural designs for the organization,
thereby adding potential sources of economic value and competitive advantage.
Technological change will have an impact on all organizations. There will be a need for new
types of managerial, diplomatic, and social skills and a concomitant need for a new type of
decision making process that will not be accommodated by existing organizational structures.
Three particular aspects of the organizational environment will be affected by technological
change: the amount of market competition and uncertainty will increase; there will be
requirements for more diversity and higher quality in the organization's products or services;
and external politics and legislative reform will increase in complexity. Each of these changes
will provoke responses from the organization in its structure and relationships with
employees and customers.
Technological change will force changes in basic managerial functions. There will be
increased responsibility on management for organization outcomes leading to added
emphasis on planning, decision making, control, and coordination. These will often rely on
computer-based management science techniques which demand a higher intellectual
capability of managers. This will produce strain on managers and other individuals,
potentially affecting morale, productivity, and output.
Technological change can positively affect individual values leading to increased time for
consideration of both the heart and the brain in decision making. This may lead to greater
moral sensitivity and more tolerance and compassion for others, all coupled with a more
rational approach to decision making. A possible effect of technological change may be
increased loyalty to one's profession rather than to one's organization. The effect of
technological change on the manager's quest for self-actualization is still debatable.
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The net result of technological change for all organizations is a greater requirement for
strategic planning. All of us must continually ask the question "What do we have to do now
to attain our objective tomorrow?" Through this process we can anticipate changes, including
those brought about by technology, evaluate the various alternatives available to us to cope
with those changes, and be prepared for the future as it arrives.
Organisational design is actually a formal process of integrating people, information and
technology together in the right mix to achieve objectives. These are management choices
that form an organizational culture.Technology can have an impact on how your organization
is structured and how work flows. Technology can create positions within your company and
it can eliminate positions. When filing is done electronically, there is no longer a need for as
many file clerks as you once had but there is a need for a department of technicians to
maintain and grow the computer network. As technology continues to change the function of
jobs in the workplace, the landscape of organizational structure changes with it.
An example of an organizational structure that has emerged from newer technological trends
is what some have called the "virtual organization," which connects a network of
organizations via the internet. Over the internet, an organization with a small core can still
operate globally as a market leader in its niche. This can dramatically reduce costs and
overhead, remove the necessity for an expensive office building, and enable small, dynamic
teams to travel and conduct work wherever they are needed.
A similar organizational design that is heavily reliant upon technological capabilities is the
network structure. While the network structure existed prior to recent technologies (i.e.,
affordable communications via internet, cell phones, etc.), the existence of complex
telecommunications networks and logistics technologies has greatly increased the viability of
this structure.
Technology can also affect other longstanding elements of an organization. For example,
information systems allow managers to take a much more analytic view of their businesses
than before the advent of such systems. Managers can communicate and delegate much more
effectively through using technologies such as email, calendars, online presentations, and
other virtual tools.
Technology has also impacted supply chain management—the management of a network of
interconnected businesses involved in the provision of product and service packages required
by the end customers in a supply chain. Supply chain management now has the capacity to
track, forecast, predict, and refine the outbound logistics, contributing to a wide variety of
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logistical advantages (such as minimizing costs from warehousing, fuel, negative

environmental impacts, or packaging).
Technology simplifies the process of managing reports, collecting communications, and
keeping in touch, enabling management in more formal structures to take on more workers.
Increases in technology have essentially allowed organizations to scale up their companies
through more effective and efficient teams.
Environmental impact on OD
Degree of change, Complexity (number of inter related factors), market size and resources
(resource availability and capacity to support growth), coping strategies (3 strategies – Rigid,
Fast but lacks vision, fast and proactive)
Environmental Uncertainty: Simple to Complex, Static to Dynamic, Simple – few elements,
Complex – many differentiated elements, Static – unchanging, Dynamic – quick movements.
Four possibilities of impact: a) Simple and Static – Lowest uncertainty, b) Complex and
Dynamic – Highest Uncertainty, c) Simple and Dynamic – Mid way between Lowest
Uncertainty and Highest Uncertainty and d) Complex and Static: many factors but
unchanged.
Technology and Research and Development. Management Philosophy, PEST, Organic
Structure, Stable/Unstable. Mechanistic, Structure of Stability, Internal and Externals,
Decision making, Customer Interaction, Innovation, Marketing consideration. Intensifying
competition, Liberalisation of Economy, Organizational size, Strategy, Competition,
Customer preference change, Demographic Change, Resources skilled workers, Raw
materials, Finance.
Environmental impact design is concerned with modifications to the design of development
projects to achieve positive impacts - externalities which benefit the environment and raise
the stock of public goods. Examples of positive impacts include:
Habitat creation as a result of afforestation projects
Coastal management projects which contribute to ecological and recreational objectives flood
defence projects which create greenways public open space projects which contribute to
surface water management objectives bridge designs which enhance the landscape and
contribute to non-transportation objectives.
Importance of Organizational Design:
Organizational framework influences employee behaviour. Reshaping processes, structures,
roles and strategies. Company leadership (setting forth reporting relationship and lines of
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authority), Company culture, Foundation of operation, guidance and clarity, grouping of

employee, helps to develop culture and interaction, future growth, adaptability (develops
Competitive advantage), effect on function (work flow) and communication, facilitate
internal promotion, evaluates employee performance and achieve goals. Horizontal or flat
structures: Increases group collaboration, decrease cycle time, lower costs and increases
quality.
Success and Failure of OD – It addresses challenges of employees
OD have impact on efficiency, management, system of control, culture.
Successful design test: A design to be successful, the organizational design has to adhere to
following principles and undergo below mentioned.
S.No Principle Test
1 Specialisation Specialist Culture Test
2 Co ordination Redundant hierarchy test
3 Knowledge and Competence Difficult task test
4 Control and Commitment Accountability test
5 Innovation and adaptation Flexibility test
6 Constraints Feasibility test
7 People efficiency People test
8 Corporate Strategies Parenting advantage test
9 Product market Strategies Market advantage test
Strategies should be linked to considering resources, goals, uncertainty, environment and
complexity.
Components of success: a) Leadership (clear vision and priorities and cohesive leadership
team), b) Decision making and structure (clear roles and accountability and organizational
structure that support objectives), c) People (organizational and individual talent,
performance measure and incentives), d) Work processes and system (superior execution of
work process) and e) Culture (Capacity to change and high performance).
Features of Successful Design: Consider all components of success, Align 5 components,
Align strategy, No right answer but always better answer, make compromise, managing
trade- offs, compatible, minimal critical specification, variance control,, clear goals and
flexible strategies, information flow, support congruence and design human values.
Failure of OD:
The design of an organization is often a critical enabler for the achievement of a company’s
strategy and goals, ongoing innovation, and streamlined operations. During our years of
experience helping clients reorganize their operations, we have identified seven mistakes
made by companies.
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1. Not knowing what you are trying to achieve

Before moving boxes and lines on an organization chart, it is important to know why you are
doing the reorganization. Is it a result of a merger, acquisition, or downsizing? Are you trying
to reduce costs and improve efficiencies? Are you struggling with performance issues? Are
there too many direct reports, which may be impeding both employee development and
innovation? Is the reporting structure too complex? Clear guidelines that reflect what the
goals of the new organization are will help companies ensure that the redesigned organization
will attain those stated goals.
2. Structuring an organization for specific personnel
It is not uncommon for key people within an organization to have tremendous influence due
to their tenure, expertise, or importance to certain client relationships. As a result, there is a
risk that the preferences of the individual will become a priority during organization design
rather than the objectives and requirements of the business. It is incredibly important to
separate the organization design component from the actual selection of staff.
Strategy should drive organization design, and organization design determines the type of
people who should be selected. If you design an organization based on the people, the
organization will not be set up most effectively to support the overall end objectives. Skill
sets may not match future needs and labor costs can be misaligned. And while placing a
single individual in a position that is not well-matched may appease guilt or maintain a prior
relationship, the larger organization will suffer, putting revenue and efficiency at risk.
Additionally, the individual may become disengaged over time while working in a position
for which he or she is not properly suited. On the whole, designing an organization based on
the people results in compartmentalized processes with components owned by different
people, reducing overall efficiency, and jeopardizing the organization’s support of the overall
business strategy.
3. Causing more disruption than needed
ScottMadden sometimes encounters clients who view reorganization as an opportunity to
“clean house.” Although it is true that the need for change usually provides a good
opportunity to also address other inefficiencies or problem areas, leaders should be cautious
about causing more disruption than necessary. Drastic staffing cuts or process changes can
result in reduced employee morale, the loss of valuable talent, stagnated innovation, and an
overall distraction from the mission of the organization.

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4. Making decisions and/or having sidebar agreements outside of the agreed-upon

process
A sidebar or supplemental agreement that compromises the documented, agreed-upon,
communicated process threatens project success. These actions can open the door to
additional exceptions to the organization design process and can result in an overall lack of
trust in the organization’s leadership going forward. For example, management has set forth a
process of evaluating and selecting for all reorganized positions. Two managers have a
sidebar discussion in the hall that they really want “someone like Kim” in one of the
positions. Both managers agree and decide to put Kim in the position and determine who will
backfill her in her current position, despite already communicating that the two positions will
be posted and interviews will be conducted for final selection.
While it may seem harmless at the time to make minor adjustments to the agreed-upon
process, the act of doing so threatens the project by creating the justification for making
larger exceptions later on in the process, as well as demonstrating to the end population that
the process is not “fair.”
5. Skipping current state assessment
Many organizations desire to jump directly to the organization design stage before
conducting a detailed current state assessment (CSA) that includes current costs, volumes,
and service levels of the organization. It is imperative that a comprehensive CSA is
completed prior to the design, as the design is dependent upon many of the metrics and
standards that are established within the CSA. Gauging improvements in efficiency and/or
performance from the redesign often depends on an organization’s ability to analyze and
compare layers, spans, and cost-to-manage to standards. A CSA forms the basis for these and
other analyses, without which decisions are not fully informed.
6. Breaking the circle of confidentiality
It is incredibly important for participants involved in the redesign to keep project information
inside the circle of confidentiality. Revealing too much too soon to those outside the “Circle
of Trust” can threaten an organization’s level of engagement and overall productivity. The
design of a new organization structure brings with it new roles, responsibilities, and reporting
relationships. These changes can encourage or discourage personnel, and therefore have the
potential to threaten the effectiveness of the new structure. The performance of individuals or
entire departments can be compromised if people think they will not have a job in the future
organization, and this has a network effect on the rest of the organization. In addition,
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organizations may lose their most talented individuals who feel uncertain about their future
within the new organization, while being highly sought after in the marketplace.
7. Bypassing a formal change management and communications plan
It is essential that a formal plan is developed to support the communication of the right
information at the right point in the process. Details about the new organization, along with
details of the selection process, should be communicated as they are finalized to all levels of
the organization. This will help avoid surprise or confusion about the responsibilities and
expectations during the change. If rumors conflict with formal communication during the
process, the legitimacy of the organization will be jeopardized.
Reorganizations can be highly successful ventures. However, by understanding what your
main drivers are on the front end, whether you are promoting growth, cutting costs, changing
culture, or changing overall operations, you can ensure you achieve your goal of better
performance.
Failure of OD: Lack of Co-ordination (unfinished work and isolated teams), Forced
Adaptation (no over-looking), Excessive conflict (friction among groups), Unclear roles
(functional overlap), Gaps in skills and misused resources (missing or under-utilizing skills
and resources), Poor work flow (Cumbersome processes), Reduced responsiveness (Slow
reaction to environmental shifts), Conflicting communication (external stakeholders) and
Low staff morale (Lack of confidence or drive)
IMPORTANT UNIVERSITY QUESTIONS
PART A
1. Define Organizational Design.
2. Type of OD.
3. Merits and Demerits of Mechanistic and Organic Structure.
4. Basic Challenges in OD.
5. Technological and Environmental Impacts.
6. Determinants of OD.
7. Centralization and Decentralization.
8. Components of OD.
9. Importance of OD.
PART B
1. Organizational Design – Types, Components and Determinants.
2. Challenges in OD and how to overcome it.
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3. Mechanistic and Organic Structure.

4. Technological and Environmental Impact on OD.
5. Success & failure of OD.
UNIT 3 – ORGANIZATIONAL CULTURE

WRITTEN OR UNWRITTEN FEELING PART OF ORGANZIATION
CULTURE IS SET OF IMPORTANT UNDERSTANDINGS THAT MEMBERS OF AN
COMMUNITY SHARE IN COMMON
INTRODUCTION AND MEANING:
 A set of shared values and norms that control organizational member’s interactions with each
other and with people outside the organization.
 Organizational Culture also called as Corporate Culture.
 It is a belief system shared by an Organizational members – Spender.
 It defines way of life.
 The way the things are done in and around the organization.
 Values and behaviour to social and psychological environment of an organization.
 It also includes expectations, experiences, philosophy, self-image, inner workings and
interactions within and outside the organization.
 It is based on shared attitudes beliefs, customs and either written or unwritten rules.

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 It covers the way the organization conducts its business, treat employees, customers and
community, extent of decision making freedom, flow of power and information and
guidelines for customer care.
 It has two components Observable Symbols and Underlying Values, Observable Symbols
includes Stories, Slogans, Behaviour, Dress, Physical Setting, Ceremonies etc. Underlying
values assumptions, beliefs and thought processes.
DEFINITION:
Organizational Culture is a set of shared mental assumptions that guides interpretation and
action in an organization by defining appropriate behaviour for various situations
– Ravasi and Schutz
Culture is set of value, norms, guiding beliefs and understandings that is shared by members
of an organization and taught to new members as the correct way to think feel and behave
– Jones
Organizational Culture is set of shared enduring beliefs communicated through variety of
symbolic media to create meaning to people’s work lives – Caldwell.
FEATURES/ROLES OF CULTURE
Unites employees, Enable to differentiate one organization from another, Generate
Commitment, Important for task, Must be shared, Must be learned, Can be symbolic, taken
for granted, varies across time and place, Individual autonomy (degree of responsibility,
freedom, opportunities that individual have), Structure (Rules, regulations, amount of
supervision and control), Identity (members identification with organization), Conflict
tolerance (open about tolerance), Risk tolerance or Risk orientation (encourage to be
innovative, looking for improvement), Process orientation (expected to be accurate and gives
attention to details), Achievement orientation (focus on outcome or results), Fairness
orientation (treat employee with dignity and respect), Collaboration orientation (positive
relationship with co-workers), Competitive orientation (outperforming competitors and being
aggressive), Stability Orientation (Rule oriented, consistent and predictable), Support (degree
of assistance required), Performance reward (reward for performance by adhering to culture).
ELEMENTS OF ORGANZIATIONAL CULTURE
The elements of culture are Values, Programmes, Heroes (member who personify values and
highlight its vision), Communication Network, (formal or informal channel reinforces
cultural messages) Norms (way of doing things), Assumptions (taken for granted and
invisible), Stories (it includes myths, histories, stories that embodies culture, heroes are role
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models, myths – no supported by facts), Organizational Climate (Supportive or Defensive

climate), Rites & Rituals (Celebrations), Beliefs (greater level of awareness), Language (Eg:
Motivation), Symbols and Artifacts (Physical artifacts, Eg: open door policy, they are visible
but often difficult to understand), Organizational Structure (mechanical or organic), Power
relationship (ability to influence or ability to manipulate) and Control system (how
organizational control people and operations).
VALUES: General criteria, standard, guiding principles that people used to determine which
type of behaviour, events are desirable or undesirable. How individual or group of an
organization organize their ethical or ideological values.
Types of Values:
i. Personal Values: Applied to one individual only.
ii. Communal System: Applied to Community or group.
iii. Terminal Values: Outcome
iv. Instrumental Values: Desired behaviour
v. Internally Consistent Value: NO Contradictions allowed.
vi. Externally Consistent Value: Contradicts with each other.
vii. Idealized values: Lacks Exception and it is absolute.
viii. Realized Values: Contains exception.
ix. Abstract Exception values: Ranking of values.
x. Situational Exception values: Based on specific situation.
Value System or features of values:
i. Conditioned (got practised)
ii. Clannish (living together)
iii. Cynical (tough, aggressive, tight control and supervision)
iv. Conventional (Classical)
v. Competitive (materialistic)
vi. Compassionate (friendly interpersonal relationship)
vii. Conscious (Willing)
TYPES OF CULTURE:
1. Work Hard, Play Hard Culture – Rapid Feedback and Low Risk, Eg: Food Industry.
2. Tough Guy Macho Culture – Rapid Feedback and High Risk, Eg: Medical surgery.
3. Process Culture – Slow Feedback and Low Risk, Eg: Insurance.
4. Bet the company Culture – Slow Feedback and High Risk.
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5. Power Culture – Power radiates from one or few central figure, Quick decision making.
6. Role Culture – Based on role
7. Task Culture – Appropriate behaviour for specific task.
8. Person Culture – Linking like-minded people.
9. Clan Culture – Culture followed by local community.
10. Adhocracy Culture – Focus on Creativity.
11. Market Culture – Based on Geographical location.
12. Hierarchy Culture – Based on Position.
13. Constructive Culture – Encourage to interact with people, Humanistic, Affiliate,
Encouraging.
14. Passive Culture - Without threatening own security, It seeks for approval, dependency and
conventional approach.
15. Aggressive Culture – Forceful approach, It works on power, perfectionism and oppositional.
16. Tribal Culture - Tradition exist in tribe.
17. Entrepreneurial Culture or Entrepreneurial Organizational Culture (EOC) – Deals with
problems of survival and prosperity, environmental uncertainty, competitors threats, value
creation through innovation and change, freedom to grow, emphasis on future.
18. Personal Culture - Based on personality, custom or practices by specific personality.
19. Normative Culture – Stress on Procedure.
20. Academy Culture – Focus on employees skills.
21. Collaborate Culture – People oriented, succeeded by working together.
22. Baseball Culture – Free Agent, Considerable amount of risk attached.
23. Club Culture – Stay for long time.
24. Fortress Culture – Massive Change.
25. Macho Culture – Big Reward.
26. Pragmatic Culture – Satisfying the wish of clients.
27. Control Culture – Succeeded by Control. It is company oriented.
28. Competence Culture – Succeeded by being the best. It is possibility and company oriented.
29. Cultivation Culture – Succeeded by group of people who fulfils vision. It is combination of
possibility and people oriented.
30. Dominant Culture – Majority.
31. Sub Culture – Minority.
32. Mechanistic Culture –
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33. Organic Culture –

34. Authoritarian Culture – Culture based on authority and power.
35. Participative Culture – Top to bottom and bottom to top communication.
36. Material Culture – Man made Eg; Clothes.
37. Non-Material Culture – Intangible – Ceremonies.
38. Network Culture – Based on trust and friendship.
39. Mercenary Culture – Sense of purpose and excitement.
40. Fragmented Culture – Work for Organization and not for friendship.
41. Communal Culture – Combination of Network and Mercenary.
42. Professional Culture – Also called as Horizontal Sub Culture – for specific professional
group.
43. Institutional Culture – Also called as Vertical Sub Culture – for specific Department.
44. Hard Culture – Task Oriented.
45. Soft Culture – Relationship Oriented.
46. Formal Culture –
47. Informal Culture –
48. Strong Culture
49. Weak Culture
STRONG CULTURE VS WEAK CULTURE
S.No STRONG CULTURE WEAK CULTURE
1 Better Alignment with Vision, Mission and Poor
Goals
2 High employee motivation Low
3 Consistent Varies
4 Values widely shared Lack of Sharing
5 Stable network Broken down
6 Implicit norms Formal rules
7 Stable Structure Feeble
8 High Employee Commitment Low
9 Sense of being special Sense of being ordinary
10 Pride in uniqueness Shame and blame past sins
11 Rapid growth Ceased growth
12 Heroism No signs
13 Sense of rebellion Sense of conformity
14 Secrecy is high Less
15 Product quality is high Low
16 Innovation is high Low
17 Shared feeling of success Blame others on failure
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18 Have stories about heroes NO such stories

19 Strong connection between values and behaviour Little Connection
20 Increase team cohesiveness Cohesiveness is missing
IMPORTANCE OF CULTURE
1. Unity: Culture unites employees of different background of employees with different
traditions and culture.
2. Loyalty: Sense of accomplishment.
3. Competition: Healthy environment.
4. Direction: It gives path for working.
5. Identity: Identity through developing uniqueness.
6. Interaction: Decides the way of interaction.
7. Policies: It helps to predefine policies.
8. Common platform:
CREATING AND SUSTAINING CULTURE
Winning Culture: Customer focused action, Translate into personality, Personality into
customer focused action.
Steps in Creating and Sustaining Culture:
1. Perform a culture audit and set new expectation: S W O T analysis of culture.
2. Align the team: Frank assessment of each member.
3. Focus on results and build accountability: Set targets.
4. Manage the drivers of culture: Drivers of culture are Organizational Structure, Decision
rights, Talent Management systems and Incentives.
5. Communication and Celebrate: Keep customer’s perception and suggestions. Requires
consistent, sustained communication of the end goal and behaviour necessary to achieve
objective.
Modes of Culture Creation: 3 Ways
1. Hire only who think the same way: Align with founders thought.
2. Indoctrinate thinking and feeling: Persuade, Convince and Socialize the way of thinking and
feeling.
3. Act as Role model: To internalize their beliefs, values and assumptions.
Modes of Sustaining Culture or Forces of Sustaining Culture: 3 Ways
1. Selection Practices. 2. Actions of Top Management. 3. Socialisation method

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Strategies for Sustaining Culture:

1. Socialisation: Right people for right job, 3 stages of socialisation (a. Pre arrival – outsider,
gather information, forming psychological contract, own idea, b. Encounter – Exposed to
reality and testing session, c. Metamorphosis – Change and fit, resolve conflict, change roles,
leads to productivity, commitment and less turnover).
Tactics of Socialisation: Collective (common) vs Individual (unique), Formal (separate
learning process)vs Informal (learn on the job), Sequential (explicit information on order) vs
Random (order depends on need), Fixed vs Variable, Serial (old members act as role model)
vs Disjunctive (develops own way of learning), Divestiture (Unlearning, negative social
support, ignored till they conform to norms) vs Investiture (immediate positive social support,
learning process).
2. Actions of founders and leaders – Cultural Imprints.
3. Culturally consistent rewards: Incentive, employee assistance programmes, medical insurance
and other benefits for well-being.
4. Managing the cultural network: Grapevine network.
5. Managing stable workforce.
CULTURE AND STRATEGY:
Science of formulating, implementing and evaluating cross functional decision that enable
organisation to achieve objective.
Behaviour and culture aligned with business strategies, In case of conflict give priorities to
strategy.
If Strategy focus on innovation: Reward innovation.
If Strategy focus on efficiency: Should define job roles clearly.
Handling misalignment: If there is misalignment there is a chance of non-achievement.
Role of leaders and HR in aligning culture
Leaders define the vision and direction of the organization.
It is leader’s responsibility to model and reinforce behaviours that delivers vision and
strategy.
HR works to integrate the business strategy with talent management and reward strategies
and programs.
HR advises and facilitates the incremental steps.
HR team also ensures that workers desired competencies skill align with these priorities.
Finally HR has to management gap.
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Leaders react in time of crisis.

Leaders allocate rewards.
Leaders hire and fire individuals.
When culture has purpose and abide strategy VISION
Relationship between Strategy and Culture: Relationship can be depicted through
difference
S.No STRATEGY CULTURE
1 Focus on direction Emotion
2 It is on paper How it is understood
3 Strategy is Rational Humane
4 Intent  things that organization plan to do Deals with execution
5 It lays down rules for playing games It gives spirit for playing games
6 Focus on Differentiation Delivers strategic advantage
7 Strategy is relatively permanent Culture gets eroded everyday
CULTURE IS SECURED, ENHANCED AND SUSTAINED BY SOUND STRATEGY

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PART A
1.Organizational Culture
2. Strong vs Weak culture
3. Types of culture
4. Determinants of perfect culture
5. Ways to sustain culture
6. Culture and strategy relevance
PART B
1.Organizational Cutlure – Importance and types
2. Strong vs Weak Culture
3. Creating and Sustaining Culture
4. Culture & Strategy
5. Culture for labour intensive firm

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UNIT 4 – ORGANIZATIONAL CHANGE

CHANGE ALONE IS ETERNAL, PERPETUAL AND IMMORTAL
Introduction:
Change is constant, Change is required to handle imbalance in the existing pattern or
situation, to handle dissatisfaction in better alternative manner.
HR is important factor in adjustment in managing dissatisfaction in old and belief in new.
Change occurs when: amount of dissatisfaction in current or availability of a desirable
alternative or existence of a plan for achieve a desirable alternative.
Change may leads to change in business condition, change in managerial personnel, and
deficiency in existing organizational patterns, technological and psychological reasons,
government policy and size of organization.
Definition:
Change is an intentional goal directed behaviour – Robbins.
Any alteration occurring in the work environment that affects the ways in which employees
must act. – Newstrom.
Organizational change: The process by which organization move from their present state to
some desired future state to increase their effectiveness.
It is the coping process of moving from the present state to the desired state that individuals,
groups and organization undertake in response to dynamic internal and external forces.
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Nature:
Whole organization is affected, Human as well as technical aspects, introduced through
people and they willing to accept responsibility and requirement, able to adapt not only
pattern and attitudes, seeks to establish an equilibrium, Needs to be proactive and reactive,
occurs at individual, departmental and organizational level.
Major organizational Changes in last two decade: globalisation, technological growth,
political alignment, changing customer preference, organizational restructuring, financial
loss, increase competition, work force diversity, growing consumerism and social trends.
FORMS OF CHANGE
a) Mission and Strategy
b) Organizational Structure
c) People
d) Culture
e) Knowledge
f) Policies and Agreements
g) Processess
h) Technology
i) Production
j) Marketing
k) CRM
l) Integration of two or more from above
FORCES OF CHANGE (Organizational environment)
External Forces
a) Nature of Workforce: Demographic characteristics – Age, Education, Gender, etc. Other
characteristics: Skill level, cultural diversity, attitude, professionalism etc.
b) Technological Advancement: Manufacturing automation, Office automation, TQM, BPR, E-
Business, Jobs become intellectual, Need for bio professionalism, multi professional
managers and change in structure of organization.
c) Market Change: Mergers and Acquisition, Domestic and International competition,
Recession, CRM.
d) Social Trend:
e) Political forces: Political Leadership, Political cycle.
f) Competitive forces:
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g) Economic forces:
h) Legal forces
i) Geographic forces
j) Ecological forces
k) Ethical forces
l) Global forces
m) Customer demand
n) Supplier demand
o) Governemnt and regulatory authorities
p) Strategic partners
Internal Forces
a) Behaviour of Management
b) Interpersonal conflict
c) Employee perception
d) HR Problems: Unmet needs, Job dissatisfaction, Absenteeism, Turnover, Productivity,
Participation and Suggestions.
e) Managerial Behaviour: Conflice, Leadership, Reward system, Structural reorganization.
f) Financial Capacity
g) Human Resource availability and skills
h) Research and Development
i) Physical resources
j) Corporate Image
Miscellaneous forces
a) Loss of Control
b) Loss of face
c) Loss of competency
d) Need for Security
e) Poor timing
f) Force of habit
RESISTANCE TO CHANGE: OPPOSING OR RETARDING FORCE
a) Economic Reasons: Fear of reduction in employment, Fear of Demotion, Fear of workload.
b) Personal Reasons: Need for Training, Boredom and Monotony, No participation in change.

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c) Social Reasons: Need for new social adjustment, Taking change as imposed from outside,
benefit for organization not for employee
d) Individual Reasons: Habit, Security, Economic factros, Fear of unknown, selective
information processing.
e) Organizational Reasons: Structural inertia, Limited focus of change, group interia, threat to
expertise, threat to established power relationship, threat to established resource allocation.
f) Lack of context or direction
g) Emotional reasons
h) Trust resistance
i) Personality conflict
j) Perceptual blocks
k) Emotional blocks
l) Cultural blocks
m) Environmental blocks
n) Cognitive blocks
o) People focused resistance
p) System focused
q) Organizational focused
r) Politics focused
s) Attitude, percpetion or values related
t) Without training
u) Organizational structure, culture or technological related
v) Power related
w) Logical and rational
x) Psychological and emotional
y) Socio-logical relationship
z) Miscellaneous Reasons
i) Individual predisposition to change
ii) Climate of mistrust
iii) Fear of failure
iv) Loss of Security or status
v) Peer pressure
vi) Distruption of cultural traditions or group relationship
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vii) Lack of tact

viii) Poor timing
ix) Non reinforcing reward system
x) Inconvenience
xi) Insecurity
xii) New control
xiii) Violation of extablsihed or expected norms
xiv) Lack of prior consultations
xv) Trade union attitude
MANAGING RESISTANCE
i) Education and Communication: Through education and communication, internal and external
agents of change can provide organizational members with information about the change and
how it will affect them. Change agents can communicate this information is formal group
meeting, by memo in one on one meetings and increasingly through electronic means suca as
email and video conferencing.
ii) Participation and Empowerment: Inviting workers to participate in the change process is
becoming a popular method of reducing resistance to change. Participation complements
empowerment, increases workers involvement in decision making, and gives them greater
autonomy to change work procedures to improve organizational performance. In addition to
encouarge workers to share their skills and talents, organizational are opening up their books
to inform workers about the organizational financial condition. Some organizations use
ESOP’s to motivate and rewards employees and to harness their commitmentn to change.
iii) Facilitation and Support: Both managers and workers find change stressful because
established task and role relationships alter as it takes place. There are several ways in which
organizations can help their members to manage stress, provididng them with training to help
them learn how to performa new tasks, providing them with time off from work to recuperate
from the stressful effects of change or even giving senior members sabbaticals to allow them
to recuperate and plan their future work activities. Many company employ psychologists and
consultants who specialize in helping employees to handle the stress associated with cahnge.
During organizational restructuring when large layoffs are common, many organizations
employe consultants to help laid off workers deal with the stress and uncertainty of being laid
off and having to find new jobs.
iv) Manipuation and Co-operation
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v) Bargaining and Negotiation: They are important tools that help managers manage conflict.
Because change causes conflict, bargaining is an important tool in overcoming resistance to
change.. By using action researcn, amnagers can anticipate the effects of change on
interpersonal and intergroup relationships. Managers can use this knowledge to help different
people and groups negotiate their future tasks and roles and reach compromises that will lead
them ti accept change. Negotiation also helps individuals and groups understand how change
will affect others so the organization as a whole can develop a common perspective on why
change is taking place and why it is important.
vi) Coercion: The ultimate way to eliminate resistance to change is to coerce the key players into
accepting change and threaten dire consequences I fthey choose to resist. Workers and
managers at all levels can be threatened with reassignment,, demotion ro even termination if
they resist or threaten the change process. Top managers attempt to use the legitimate power
at their disposal to quash resistance to change and to elimniate it. The advantage of coercion
can be the speed at which change takes place. The disadvantage is that it can leave pople
angry and disenchanted and can make the refreeezing process difficult. Managers should not
underestimate the level of resistance to change. Organizationa work because they reduce
uncertainty by means of predictable rules and routines that people can use to accomplish their
tasks. Change wipes out the predictability of rules and routines and perhaps spells the end of
the status and repstige that accompany some position. It is not surprising that people resist
change and that organizations themselves as collectiions of people are so difficult to change.
vii) Shape political dynamics
viii) Reward constructive
ix) Planning for change
x) Protecting employee interest
xi) Group dynamics
xii) Caution and slow introduction
xiii) Positive motion
xiv) Sharing the benefits of employee
xv) Training and Development
xvi) Career Planning and development
xvii) Organizational development
xviii) Ownership of idea
xix) Bring minor change that works well
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xx) Installing system for reward: Appraisal

xxi) Installing system for control: Budget
xxii) Installing system for communication system: Formal and Informal
xxiii) Installing system for Developmental system: Training
xxiv) Installing system for Physical system: Location
xxv) Offers solution
xxvi) Provide what is to happen and why to happen
xxvii) Eliminate doubt
xxviii) Listen Listen Listen Listen ……
xxix) Invite suggestion
xxx) Bargain with trade union
xxxi) Decide need and urgency
STEPS TO OVERCOME RESISTANCE TO CHANGE – by CHANG – 5 STEPS
1. Explain the change and why it is required: make people to understand
2. Encourage two way communication: Know objections and clarify, Suggestions
3. Gather suggestions to help the change into actions: Build sense of control and
involvement, Eliminate fears.
4. Agree on an action plan: Coordinate with change agent, Establish commitment and
accountability, Facilitate with required resources.
5. Evaluate Progress and reinforce success: Recognise support and acknowledge success,
make adjustments.
TYPES OF CHANGE:
1. Continuous change: Equilibrium in fluctuations.
2. Discontinuous change: external change that requires internal adaptation, abrupt and non
linear
3. Intrinsic change: Internal environment
4. Extrinsic change: External environment
5. Patterend and Predictable change: Identifiable cause and effect
6. Complex and Unpredictable change:
7. Duality or Bipolarity change: any combo of 1 & 2, 3&4, 5&6.
8. Micro change: Personal lives
9. Macro change: Collapse or affect universe
10. Organizational change: Institutional
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11. Happened change: Due to external factors

12. Reactive change: Response to series of event
13. Proactive change: Cautioned
14. Anticipatory change: Expectation of event
15. Planned change: Improve current stage
16. Incremental change: sub units to units
17. Operational change: Improve quality of its product or services
18. Strategic change: Organization as a whole
19. Directional change: Due to severe competition
20. Fundamental change: Purpose or mission
21. Total change: Link between strategy, employees and business
22. Transformational change: Change in organizational part as greater continuous learn and
adapt
23. Evolutionary change:
24. Revolutionary change:
25. Recreational change:
26. Structural change:
27. Technological change:
28. Participative change:
29. Unplanned change:
30. Episodic change: Intentional, Frequent and radical
31. Developmental change: Increase existing
32. Transistional change: Episodic and planned
Evolutionary change: Change that is gradual incremental and specifically focused.
Instruements for evolutionary change: Socio technical system theory, TQM by QC,
Creation fo empowered work group.
Socio technical system theory: Theory that proposes change in role due to task relationship.
TQM: It is a technique developed by W Edwards Deming to continuously improve the
effectiveness of flexible work teams. It improves the quality of both goods and services. It
leads to continuous, incremental change and all functions are expected to cooperate with each
other to improve quality. Quality council: Group discuss the way in which work is
performed and finds new way to increase efficiency in performance. Group of workers who

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met regularly to discuss the way work is performed in order to find new ways to increase
performance.
Flexible work team: Responsibility to perform task and all operations. Group of workers
who assume responsibility for performing all the ooperations necessary for completing a
specified stage in the manufacturing process. Flexible work team is self-managed
Advantage: Will become part of the culture, Change fits the organization, leads to more
thoughtful solution
Disadvantage: Very risky, Haphazard, Can be design by committee where a sense of central
direction is losst, hard to find people who are good at make change
Revolutionary change: Sudden, drastic and organization focused.
Three instruments: Re-engineering, Restructuring and Innovation
Business process re-engineering: Cut functional boundaries to have Quick functional
delivery
Restructuring: Change task, authority relationshiop and structure, downsizing: Streamline
organizational hierarchy. It is a process by which managers change task and authority
relationshiops and redesign organizational structure and culture to improve organizational
effectiveness. Downsizing: The process by which managers streamline the organziational
hierarchy and lay off managers and workers to reduce bureaucratic costs.
Innovation: Skills and resources into new product or process in new methods. They respond
to needs of customers in better way. The process by which organizationas use their skills and
resources to develop new goods and services or to develop new production and operating
systems so they can better respond to the needs of their customers.
Advantage: Low risk of change failing, change will occur quickly, political cover, look good
on annual reports, feels planned.
Disadvantage: change may not become part of the culture before focus shifts, loss of
political captial, job security for topo, opportunity cost, not necessarily good fit, treat people
like robots.
CHANGE PROCESS
NILAKANT AND RAMANARAYAN has given crucial components fo change process
called as change levers. They are as follows: Foundation component, Contextual components
and Content components.
Leadership is foundation component

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Strategy, Structure, People and Management are Contextual component – Not known to
customers, they facilitate change in Content areas.
Technology, Marketing, Quality and Cost are Content Component – Visible to suppliers,
competitors and customers.
All the three dimensions are not separate they are integrated.
RICHARD Y CHANGin his book “Mastering Change Management” – 6 Step change
process
1. Clarify your need: Identify need, determine potentiality for change and gauge emotional
reaction of team members.
2. Define your results:determine desired outcome and determine who will be affected.
3. Produce your plan:decide tast, assign roles and develop appropriate action plan.
4. Implement your plan:put it in motion and deice how to monitor.
5. Stabilize yout outcome:communicate desired outcome is in place and recognise supporters
6. Assess the process:evaluate change and establsih way to encourage innovation.
SHERLEKAR Systematic approaches to Organizational change
1. Intervention
2. Diagonsis
3. Prescription
4. Action
5. Follow-up
KURT LEWIN – Unfreeze or Refreeze Model
Simplest model, by Social Psychologist, It describle how to Initiate, Manage and Stabilize.
His analogy deals with changing shape of block of ice.
Assumptions:
 Change is process of learning something new at the same time discontinuing the present
attitudes, behaviours or certain organziational practices.
 Motivation is required to bring about change. It is not always true.
 Change in terms of structure, group, process, rewards system, job design, requires employees
and changing themselves.
 Even highly desirabel change are also likely to invite resistance.
 Effectiveness of change requires, reinforcing new behaviour attitudes and organizational
practices.
Stages: Unfreezing, Changing and Refreezing.
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1. Unfreezing: Creation of Need.

Make system receptive to change, know where it hurts, create motivation, employees are
encouraged to replace past behaviour and attitudes with those desired by management.
Disconfirm usefulness and apprpiateness of current practice to create dissatisfied with old.
Minimum resistance
Bencha marking technique
Establsih good relationship
Reduce barriers.
2. Changing: Implement, Learning is needed, Change agent or manager should provide
employees with new information/new behavioural model/new methods.
To facilitate change use: Training, Role models, Bench marking results, Mentors, Experts
Conduct feedback.
3. Refreezing: Stabilize
Changes already brought are stabilised by integrating changed behaviour/attitude into normal
way of doing.
Create acceptance
Give chance to exhibit new behaviour
Provide positive reinforcement
Additional modeling and training are used to reinforce.
In Organization often refreezing is missed.

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GREINER’S MODEL FOR CHANGE

1972, it take into account: Size of organization – Small or Large, Age of organization –
Young or Mature, Stages of development – Evolution or Revolution Stage.
Phase I: Initial Creative: Led by founder
Phase II: Direction: Strong Manager
Phase III: Delegation: Greater responsibility
Phase IV: Co ordination: Strong central service.
Phase V: Collaboration: focus on problem solving and performance, inter disciplinary team
– matrix structure.
TRANSFORMATIONAL MODEL – KOTTER’S 8 STEPS MODEL
1. Establish a sense of urgency: Whole company really wants reason for change, Initial
motivation, threats and opportunities, Open a convincing dialogue, request support.
2. Creating the guiding coalition: Convince people, Cross functional and cross level groups,
Strong leadership, Find change leader, Develop coalition and emotional commitment
3. Develop a vision and strategy: Select clear vision from ideas to guide change process,
values and strategies.
4. Communicate the changed vision: Frequently and powerfully, don’t arrange meeting alone,
use every change, walk and address anxiety.
5. Empower broad based action: Identify rewards, eliminate barriers to change, take action,
Encourage risk taking.
6. Generate short term wins: Motivate for short term wins, Recognise and reward people who
win
7. Consolidate gains and produce more change: Set goals, Additional people into change
process, Kaizen - CI
8. Anchor new approaches: Reinforce by highlighting, connection between new behaviours
and processes and organizational success. Part of core process – CI is a core process.
ORGANIZATIONAL DEVELOPMENT
Strategy by Problem and diagnosis by external consultant for improving Organizational
efficiency by right behaviour
It is defined as a strategy for increase organizing efficiency by means of behavioural
approaches, involving the application of diagnostic and problem solving skills by external
consultant in collaboration with the organization management.
Features:
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 It aims at well-being of organization and members.

 Organization wide process
 Intervention of external third party
 Aims at OE and managerial development
 Involves profound change – Long term improvement
 Value loaded – Human values and work values
 Diagnosis/Prescription cycle
 Process oriented
 Research oriented
HR function in OD:
 Change management
 Strategic HRP
 Talent Management
 Merger/Acquisition
 Integration and rationalization
 Global team development
 Strategic diversity
 General business opportunities
KEY ROLE OF HR – 4 ROLES
SCOUT – Explore
 Explore to gain information about landscape and internal business environment to identify
opportunities, threats, challenges, weakness and strength.
 Identify potential threats, assess capabilities to address and overcome threats.
 Evaluate strength and weakness fo the organization related to people, process, structure and
technology.
 Identify future talent needs required to support the business strategy and takes action to
recruit or acquire.
 Identify opportunities to improve behaviour.
 Re-engineer business operations.
CHESS MASTER – Evaluation
 Constant Evaluation of all players
 Determine how best to influence, coach and leverage change champions
 Identify and coaches key players and change champions
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 Seek to understand and influence the opinion, ideas, concerns and goals of executive manager
and employees within client organization.
 Define develop and communicate key messages to support change champions in leading
change initiatives.
 Evaluate the position of key stakeholders in the organization and develop strategies for
managing stakeholders concerns.
 Participate in both strategic and tactical human resource deployment decisions in order to
influence the outcome of change efforts.
CARTOGRAPHER – Roadmap
 Roadmap of change
 Encompasses all the critical elements of successful change initiative.
 Roadmap should contain the necessary tools and techniques to navigate successfully through
re-engineering efforts, mergers, acquisition, divestitures etc.
 Assess the potential challenges, barriers and risk to the change initiatives and define
strategies for addressing them.
 Recommend and helps to establish the appropriate governance infrastructure to effectively
manage change.
 Develop communication forms and media to facilitate two way communication with
employees about change efforts.
 Educate leaders on change tools and techniques
 Establishes issue resolution processes to ensure that any road blocks to change are managed
quickly and effectively.
ARCHITECT - Design
 Rethink the design of systems and processes for managing human performance – both
individual and team.
 Design or re-design job or job classification to empower employees with greater
responsibilities and authority.
 Design or re-design organizational structure to increase operational efficiency and
effectiveness.
 Design or re-design compensation and incentive systems to formally reward desirable
behaviour and improvements in business performance.
 Implement informal recognition systems

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 Provide training and develop program for executive and manager on how to create a high
performance work culture.
STRATEGIC CHANGE MANAGEMENT
PROCESS
1. Understand the background to organizational strategic change.
Models of strategic change – Kotter’s 8 steps, Mckinsey 7 s – Strategy, Structure, System,
Shared values, Skills, Style and Staffs.
Evaluate relevance.
Assess value of strategic techniques – team building game play contingency theory, proactive
and reactive.
2. Understand issues relating to strategic change in an organization
Examine the need for strategic change – change in global market, TQM
Assess the factors that are driving the need for strategic change – Economic, Political,
Environmental, financial.
Assess resource implications of the organization – Restructuring, interviewing, hiring,
training, physical resources.
3. Be able to lead stakeholders in developing a strategy for change:
Develop systems to involve stakeholders in the planning of change – Stakeholder analysis,
Functional and divisional structure
Develop a change management strategy with stakeholders.
Evaluate the system used to involve stakeholders in the planning of change – Identify,
prioritise, map their profiles, develop an engagement strategy and optimise support monitors
Create a strategy for managing resistance to change – minor vs major, individual vs
collective, direct vs indirect, behavioural vs attitude
4. Be able to plan to implement models for ensuring ongoing range:
Develop appropriate models for change – ADKAR – aware, desire, knowledge, ability and
reinforcement.
Plan to implement a model for change – BPR, Kaizen, Push and pull strategies
Develop appropriate measures to monitor progress – QC, Progress review,
Goal based evaluation, outcome based evaluation and process based evaluation
Skills required for Change management:Political skills, Analytical skills, People skills,
System skills – Hard skills and Soft skills, Business skills.
Principles of change management:
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1. Address the human side systematically, 2. Start at the top, 3. Involve every layer, 4. Make the
formal case, 5. Create ownership, 6. Communicate the message, 7. Assess the cultural
landscape, 8. Address culture explicitly, 9. Prepare for the unexpected, 10. Speak to the
individual
Change Management strategy:
1. Empirical – Rational: Communication of information
2. Normative – Re-educative: Redefining existing norms and values
3. Power – Coercive: Exercise of authority
4. Environmental – Adaptive: Old to new
5. Force Coercion Strategy: Reward and punishment, Involves bargaining
6. Rational Persuasion strategies: Moderate compliance and process, Unfreeze and refreeze. It
tends to result in longer lasting and internalized change.
7. Shared power Strategies: Participative, based on empowerment, long term internalization,
slow process.
PART A
1. Evolutionary vs Revolutionary change
2. Strategic change management
3. Types of Change
4. Resistance to change
5. Organizational Development
6. Individual reaction to organizational change
7. Change Process
8. Forces for change
PART B
1. Forces of change, resistance and how to overcome
2. Types of change
3. Evolutionary vs Revolutionary
4. Change Process
5. Role of HR in Organizational Development
6. Strategic Change management

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UNIT 5 – ORGANIZATION EVOLUTION & SUSTENANCE

ORGANIZATIONAL LIFE CYCLE
A sequence of stages of growth and development through which organization may pass.
4 stages: a) Organizational Birth, b) Organizational Growth, c) Organizational Decline and
Organizational Death
Organization may pass through these stages at different rates and some may skip some stages.
If organization don’t attract customers, directly they go to death from birth. Some may spend
long time in growth.
Organization responds to change decides whether it will prosper/fail.
A) Organizational Birth
Introduction: Founding of organization, entrepreneur, dangerous life cycle stage with
greatest chance of failure, failure due to newness (first in that), since it is new no way to
predict, bears uncertainty, mistake may leads to death, new unit is fragile, trail & error
method, roles, structures rules and SOP’s emerges gradually and implemented, structure is
flexible, environment is hostile. Develop business plan (identify opportunity, basic idea,
SWOT analysis, feasibility check, detailed plan)
i)Population Ecology Model or Population Ecology theory: explain the factors that affect
the rate at which new organization born & die. This model comprises of 3 components:
i) Population of Organization: Set of organization competes for same set of resources.
ii) Environmental Niche: Set of resources or skills.
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iii) Number of births determined by availability of resources and population density. Number of
birth is initially rapid at first and then tapers off. Birth is rapid due to i) new company
becomes role model and ii) increase in knowledge. Tapers off due to i) resource diminishes
and ii) difficulty to compete.
ii) Survival Strategies:

In organizational birth stage Survival Strategy are as follows: 2 sets of strategies: i) r-strategy
& k-strategy and ii) specialist strategy & generalist strategy. In total 4 strategies.
i) r-strategy vs k-strategy: they are based on entry time
r-strategist are early entrants and obtain first movers advantage. Organization grows rapidly,
develop skills & procedure to increase chances of prospering.
k-strategist are late entrants, wait to enter a new environment until uncertainty is reduced and
competing way is identified.
ii) Specialist strategy vs General strategy: they operate based environmental niche i,e: set of
resources or skills.
Specialist strategist they concentrate on narrow range of resources, develop core
competencies that allows them to outperform general strategist.
General strategist they compete for a broad range or resources, outperform specialist when
resources are changing. They can survive in uncertain environment as they have broaden their
operations.

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There is no best strategy in general, both specialist strategy and general strategy co-exist in
many environment. The process that ensure the survival of the organization that have skills
and abilities that best fit the environment. This driving force behind is NATURAL
SELECTION. It is purely competitive process.
B) Organizational Growth
This is the life cycle stage in which organization develop value creation and competencies
that allow them to acquire additional resources, increase division of labour and specialisation,
develops competitive advantage. Growth is determine by ability to develop core
competencies and accessing scarce resources.
i) Institutional theory: This theory studies how organization can increase their ability to grow
and survive in a competitive environment and becoming legitimate (legitimate here means
accepted as reliable and accountable in the eyes of stakeholders).
It also shows how organization increases operational efficiency through developing skills and
competency.
Institutional environment is a set of values and norms that govern the behaviour of
population.
ii) Organizational Isomorphism: As organization grow they copy one another’s strategies,
structures, culture, behaviour etc. to increase their chances of survival. Thus Isomorphism
exist and creates similarity among population.

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Organizational Isomorphism: Making use of already existing organizational forms. The

process by which organization become more alike or similar. Three processes that explain
why organization becomes more are given under types of isomorphism
Types of Isomorphism: a) Coercive Isomorphism (Due to pressure of government, culture
etc. and coercive forces impose standardization), b) Mimetic Isomorphism (Organizational
models that intentionally imitates and copy, increase chances of survival and success and c)
Normative Isomorphism (workforce and management indirectly they adopts, eg: recruiting
manager from same industry).
Disadvantages of isomorphism: a) that particular may become out dated, b) pressure to
imitate than to create own, c) low level of innovation.
iii) Greiner’s model of organizational growth:
Griener proposes that an organization passes through 5 sequential sub stages in growth.
Each greiner’s model stage has specific organizational problem that must be solved to be able
to advance to next.
Growth Stage 1: Growth through Creativity
Develop skills and create new product for market, great dealing of learning occurs,
innovation is important, in this stage behaviour is control by norms & values rather than
structure & hierarchy, after some time series of internal forces begins to change.
Crisis of leadership: Lack of organizational skills to develop strategy and structure.
Growth Stage 2: Growth through Direction
Crisis of leadership is managed by recruiting strong top management and this leads to
organizational growth through direction.
New top management takes responsibilities of directing a company and giving functional
responsibilities to lower level manager.
Functional or divisional structure is established to allow the organization to regain control of
its activities.
Decision making is centralised, adoption of formal standardised procedure & rules.
Crisis of Autonomy: People become frustrated by their lack of control over new rigid
structure and bureaucracy. It not only reduce ability to innovate but also internal entrepreneur
to leaves the organization.
Growth Stage 3: Growth through Delegation:
To solve the crisis of autonomy, delegation is done. It strikes the balance between recruiting
experienced people to increase internal entrepreneurship and to give room for innovation.
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Crisis of Control: When managers of different level or different functional areas starts
competing, crisis of control occurs.
Growth Stage 4: Growth through Coordination:
To solve the crisis of control, organization must find the right balance between centralized
control from top and decentralized control at functional/divisional levels.
Top management must coordinate and motivate.
Crisis of Red Tape: If coordination is managed effectively it leads to success or else leads to
crisis of red tape. Crisis of red tape means excessive rules and regulations.
Growth Stage 4: Growth through Collaboration
If crisis of red tape is resolved, social control and self-discipline take over from formal
control. Spontaneity in management action through teams and skilful confrontation of
interpersonal differences. Collaboration makes organization more organic.
Crisis of ??????????????
C) Organizational Decline and D) Organizational Death

The life cycle stage that an organization enters when it fails to anticipate, recognize, avoid,
neutralize or adapt to external or internal pressures that threaten its long term survival.
It occurs when organization can’t solve particular crisis.
Declining company may not be able to attract finance, customers or human resources.
Weitzel & Jonsson’s Model of Organizational Decline: 5 stages of decline
Occurs by different degrees.
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Stage 1: Blinded
Unable to recognize the internal/external forces.
Unable to recognize problems that threaten their long term survival.
Organization don’t have monitoring information system or not in place.
Not properly handling organizational inertia, organizational inertia are resistance to change,
risk aversion, desire for maximum immediate reward and overly bureaucratic.
Excessive number of personnel
Slow-down in decision making.
Rise in conflict between functional and divisional structure
Profit falls
Remedial actions: Gain access to good information and effective top management should
react quickly to put right strategies at right place at right time. Right structure too.
Manager must be able to monitor internal and external factors continuously to take timely
corrective action.
Stage 2: Inaction
If organization doesn’t realise it is in trouble, it advances to inaction from blind stage.
Sale decline and so profits.
Remedial actions: Downsizing and laying off employees, reducing the scope of operation.
Stage 3: Faulty action
If manager fails to halt decline at the inaction stage, they move into faulty inaction stage.
Problems continue to multiply despite or lack of corrective action.
Managers may be overly committed and fear to change their present strategy and structure.
Stage 4: Crisis
Radical top down change – stops rapid decline and increase chances of survival.
Desperately needs new idea to adapt
Stage 5: Dissolution
Organization can’t recover and it is irreversible.
Lost support of stakeholders.
NO choice than to divest
Final bankruptcy proceeding.

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MODELS OF ORGANIZATIONAL TRANSFORMATION

Organizational Transformation: It is one time, discontinuous shift in an organizational
financial performance, industry benchmark and organizational climate.
It is the process of profound and radical change that orients an organization in a new direction
and takes it entirely to a different level of effectiveness.
Variables in Transformation: a) Strategy, b) Culture, c) Core processes, d) Leadership, e)
System, f) Structure, g) Environment and h) results.
KOTTER’S 8 STEPS MODEL
1. Establish a sense of urgency: Whole company really wants reason for change, Initial
motivation, threats and opportunities, Open a convincing dialogue, request support.
2. Creating the guiding coalition: Convince people, Cross functional and cross level groups,
Strong leadership, Find change leader, Develop coalition and emotional commitment
3. Develop a vision and strategy: Select clear vision from ideas to guide change process,
values and strategies.
4. Communicate the changed vision: Frequently and powerfully, don’t arrange meeting alone,
use every change, walk and address anxiety.
5. Empower broad based action: Identify rewards, eliminate barriers to change, take action,
Encourage risk taking.
6. Generate short term wins: Motivate for short term wins, Recognise and reward people who
win
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7. Consolidate gains and produce more change: Set goals, Additional people into change
process, Kaizen - CI
8. Anchor new approaches: Reinforce by highlighting, connection between new behaviours
and processes and organizational success. Part of core process – CI is a core process.
ORGANZIATIONAL DECISION MAKING
Organizational Decision Making: The process of responding to a problem by searching for
and selecting a solution or course of action that will create value for organizational
stakeholders.
Types of Decisions:
1. Programmed decisions – repetitive, easy
2. Non Programmed decision – Novel and unstructured
3. Routine decision
4. Strategic decision
5. Organizational decision
6. Minor decision
7. Major decision
8. Operative decision
9. Individual decision
10. Crisis decision
11. Non-economic decision
12. Group decision
13. Certain decision
14. Uncertain decision
15. Departmental decision
16. Research decision
17. Problem decision
18. Opportunity decision
19. Adaptive decision
20. Innovative decision
Models of Decision making
1. Rational Model: It is also called as alternative course of action, Set of possible consequences
which are quantifiable, Rank consequences and choose an alternative. Goal directed, guided

76
by rules, routines, information on alternatives, maximum outcome. Centralised power,

harmony and consistency of goals and objective are fully informed to members.
2. Carnegie Model: Limited information is available, decision making is costly, goes by
preferences, Limited alternatives, Compromise, bargaining and accommodation. Satisfactory
solution.
3. Incrementalist Model: Not on single issue but on many intra organizational problems that
reflect their personal goals. Decision results from bargaining, Decentralised power and
reduced chance of mistake.
4. Unstructured Model: recognise uncertainty, rethink alternative, sequential process
5. Garbage Can Model: Solution based on ready-made based on their competencies. Problem
solution and people are mixed.
6. Administrative Model or Satisficing Model: Decision makers as people with varying degree
of motivation, Little time for decision making, seek shortcuts to acceptable solution, leads to
reduce decision quality but save time and effort. What is feasible is good enough solution
(Satisficing), Decisions based on SOPs.
7. Process Model: Goal directed, multiple option and alternative solution.
8. Bounded Rationality Model: Minimum criteria, not willing to invest much time, not
maximum outcome.
9. Intuitive Model: Goals are unclear, time pressure, experience with problems.
10. Creative Model: New solution to be generated.
11. Political Model: Conflicting goals and interest, certainty about outcome.
12. Anarchy Model: Goals are ambiguous and process unclear.
ORGANIZATIONAL LEARNING
Continuous process, ability to accept both internal and external change.
The process through which manager seeks to increase organizational member’s desire and
ability to understand and manage the organization and its environment
Creates an ability to respond effectively to the changing business environment – Adaptable
organization.
Organization able to sense change from environment signals and adapt accordingly.
Learning Organization: Actively creates, captures, transfers and mobilized knowledge to
enable it to adapt to a changing environment. Learning organization aims at learning for all
its members to cherish CI, whereas Organizational learning aims at increase performance and
to become adaptive organization.
77
Elements of Organizational Learning – 4 elements

1. Supportive Leaders: Committed leaders, Clear vision and goals. Act as champions and role
models.
2. Continuous improvements: Aligned values and beliefs, reinforcing incentives, Commitment
to measurement of results.
3. Defined learning structure: Define roles and responsibilities for capturing, distilling,
applying and sharing knowledge, Network for coordination.
4. Intuitive knowledge processes: Technological platform and defined processes.
Types of Organization Learning:
1. Exploration learning: Organizational members search for and experiment with new kinds or
forms of organizational activities and procedures.
2. Exploitation learning: Organizational members learn ways to refine and increase existing
organizational activities and procedures.
3. Experiential learning: From direct experience.
4. Single and double loop learning: Single loop learning is repeated attempts at same
problems and Double loop learning at different occasion and different problem.
5. Informal learning:
6. Triple or deutero loop learning: Combination of single and double loop learning.
Levels of Organizational learning
1. Individual level learning: Individual increase their own personal skills and abilities.
2. Group level learning: Share or pool their skills and abilities.
3. Organizational level learning: Create organizational structure and culture for learning.
4. Inter Organizational level learning: Increase effectiveness by coping and imitating each
other distinctive competencies.
Factors affecting Organizational learning:
1. Cognitive Structure: System of inter related beliefs, preferences, expectations and values
that predetermine responses to situation and interpretations of situation.
2. Cognitive Biases: Systematically biased. Cognitive structures to cause misperception and
misinterpretation of information thereby affective organizational learning and decision
making.
It is caused by: Ego defensiveness, Escalation of commitment, Lack of representativeness,
Illusion of control, Excessive mental stress and discomfort.
Improving Decision making and Learning:
78
1. Adopting strategies for organizational learning: Experimentation, Listening to dissenters,

converting events into learning opportunities
2. Game theory: Competitive Games
3. Nature of the top management team: Wheel type (CEO at centre and surrounded by others)
and Circle Type: Semi-circular or Oval shaped.
4. Devil’s advocate: listen to person who is responsible le for critiquing ongoing organizational
learning and overcome cognitive biases. Problem Identified Solution Suggested 
Solution Challenged  Solution selected.
5. Dialectical inquiry: team of decision makers generate and evaluate alternative scenarios and
provide recommendations. Problem Identified Solution Suggested (from different
sources) Solution Challenged  Solution selected.
6. Rational approach: Problem Identified Solution Suggested  Solution Selected.
7. Collateral Organization Structure: Similar to formal organization structure
INNOVATION: Implementation of creative ideas.
The process by which organization uses their skills and resources to develop new goods and
services or to develop new production and operating systems so that they can better respond
to the needs of their customers.
Components of Innovation: Motivation to Innovate, Resources to Innovate and Innovative
Management.
Types of Innovation:
1. Quantum Innovation: New product or operating systems that incorporate quantum
technological improvement.
Quantum Technological change: A fundamental shift in technology that revolutionizes
product or the way they are produced.
2. Incremental Innovation: Product or operating systems that incorporate refinements of some
base technology.
Incremental Technology change: Technological change that represents a refinement of
some base technology.
Protecting Innovation through Property Rights: Ownership over creation of mind
Intellectual Property Rights or Intellectual Property Management
IPR – Ownership and right over creation, Stimulus to innovate, technological transfer,
attraction for financing, can’t avail result may be due to ingenuity.
Patent, Copyright and Trademark.
79
Organizational Innovation Process:

Stage 1: Setting the agenda: Mission statement, motivate, committed top management,
initiate.
Stage 2: Setting the Stage: Broad to specific, Assess environment.
Stage 3:Producing the ideas: Individual and team
Stage 4: Testing and Implementing ideas: Input from many functional areas.
Stage 5: Assessing the outcome: Success accept the result and failure reject the idea.
CREATIVITY
Creativity is the ability to come up with novel ideas. It is the process by which individuals or
teams produce novel or useful ideas. Ideas going beyond the current boundaries, whether
those boundaries are based on technology, knowledge, social norms or beliefs.
Steps in creative problem solving: Problem definitionPreparationIdea
productionIdea developmentEvaluationAdoption.
Climate for creativity: Necessary freedom & opportunity, Necessary facilities, highly
creative engineers, avoid resisting new ideas, conduct seminars, assign problems to individual
engineer based on interest, recognise by status and financial rewards, keep originates
informed about related decision.
Barriers to creativity: Environmental barriers – Spoon feeding, Cultural barriers – Imposed
by society, Perceptual barriers – Mind tendency, Emotional barriers – fear of security,
freedom etc.
Techniques to improve creativity: Reading, Experience, Games, Writing, Hobbies, Creative
exercises, Fine arts.
Innovation, Intrapreneurship and Creativity: Intrapreneurs are entrepreneurs inside an
organization who are responsible for the success or failure of a project.
Managing Innovation Process: PERT, CPM, Gantt’s chart
PERT: emphasis on time, event oriented, control device, probabilistic, activity time not
known.
CPM: emphasis on cost, activity oriented, planning device, deterministic, time known.
Gantt’s Chart: Start and end time for elements, shows both critical path and slack time.
Stage Gate Development Funnel:
One of the mistakes that top manager often make as they carry out innovation process is to
fund too many developmental project simultaneously. Thus limited human resources,
financial resources are bound to share over to many different projects.
80
Solution to this problem is STAGE GATE DEVELOPMENT FUNNEL

It has 3 gates;
Gate 1: Initially wide mouth for creating supportive climate for innovative ideas, each
proposal is reviewed, proposal meets criteria enters Gate 2, rest rejected.
Gate 2: Prospective entrants should draft a new product detailed plan. Reviewed by senior
management.
Gate 3: Development ranges from 6 months to 10 years.
Successful innovation depends: Co-ordination of R&D, Manufacturing, Materials

Management, Process Engineering, Product Engineering and Marketing Engineering.
Cross functional team and Product team structures are created with above departments. Team
leadership is vital for success: Team leadership are Light weight team leader and Heavy
weight team leader.
Light weight team leader: Mid-level functional manager who has lower status than the head
of functional department. No control over resources. Limited cross functional coordination.

81
Heavy weight team leader: Has higher status within the organization. Have primary control
over human, technological and financial resources and duration of the project too. They solve
problems as they occur in a smooth manner and resolve disputes between team members.
PART A
1. Orgaanizational transformation models.
2. Organizational learning and its importance.
3. Intrepreneurship
4. Innovation and creativity
5. Organizational life cycle
6. Learning Organization
PART B
1. Organizational Life Cycle
2. Organizational Learning
3. Models of Organizational Transformation
4. Models of Organizational Decision making
5. Innovation and Creativity

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1

BA 5018 – ORGANIZATIONAL THEORY, DESIGN AND DEVELOPMENT –

BA 5018 – ORGANIZATIONAL THEORY DESIGN AND DEVELOPMENT

DR K S USMAN MOHIDEEN, B.Com, M.B.A, M.Com, M.H.R.M, M.Sc (Psychology), Ph.D

DR K S USMAN MOHIDEEN, B.Com, M.B.A, M.Com, M.H.R.M, M.Sc (Psychology), Ph.D

Drivers of value creation are Technology, Innovation, IPR, Management Capabilities,

a) Company Value: Decrease business risk, Enhanced Opportunities, Gaining license to

DR K S USMAN MOHIDEEN, B.Com, M.B.A, M.Com, M.H.R.M, M.Sc (Psychology), Ph.D

Organizational Effectiveness Criteria: By Fortune Magazine. a) Innovativeness, b)

a) Goal Accomplishment/Rational goal approach/Goal Attainment approach:Concern

DR K S USMAN MOHIDEEN, B.Com, M.B.A, M.Com, M.H.R.M, M.Sc (Psychology), Ph.D

DR K S USMAN MOHIDEEN, B.Com, M.B.A, M.Com, M.H.R.M, M.Sc (Psychology), Ph.D

8. Streamline communication with customers.

Advantages: Promote specialisation and Suitable for small organization only.

DR K S USMAN MOHIDEEN, B.Com, M.B.A, M.Com, M.H.R.M, M.Sc (Psychology), Ph.D

E) Process Structure: Multidisciplinary team around core process. It eliminates many

g) Enhances operating efficiency where tasks are routine and repetitive

DR K S USMAN MOHIDEEN, B.Com, M.B.A, M.Com, M.H.R.M, M.Sc (Psychology), Ph.D

2. Team-based designs are considered unstable, so the functional structure attempts to

DR K S USMAN MOHIDEEN, B.Com, M.B.A, M.Com, M.H.R.M, M.Sc (Psychology), Ph.D

UNIT II – ORGANIZATIONAL DESIGN

B) Contextual Determinants: a) Internal and b) External.

DR K S USMAN MOHIDEEN, B.Com, M.B.A, M.Com, M.H.R.M, M.Sc (Psychology), Ph.D

B) Chain of Command: Line of authority, upper to lower, Authority (Rights), Responsibility

vii) Using of Standard

DR K S USMAN MOHIDEEN, B.Com, M.B.A, M.Com, M.H.R.M, M.Sc (Psychology), Ph.D

DR K S USMAN MOHIDEEN, B.Com, M.B.A, M.Com, M.H.R.M, M.Sc (Psychology), Ph.D

vii) Horizontal structure focuses on product/project co-ordination on vertical functional structure.

DR K S USMAN MOHIDEEN, B.Com, M.B.A, M.Com, M.H.R.M, M.Sc (Psychology), Ph.D

Types of Network Structure: i) Internal Market Network: Single Organization, Stable

b) Amoeba: Spin off into another business

efficiency of an organization conversion process), c) Maintenance function (to keep

DR K S USMAN MOHIDEEN, B.Com, M.B.A, M.Com, M.H.R.M, M.Sc (Psychology), Ph.D

situation (Simple or Complex), Rate of Change (Increase or Decrease), k) Environmental

H Standardization Mutual Adjustment

DR K S USMAN MOHIDEEN, B.Com, M.B.A, M.Com, M.H.R.M, M.Sc (Psychology), Ph.D

Progression in computers and technological enhancement increases efficiency. New

logistical advantages (such as minimizing costs from warehousing, fuel, negative

authority), Company culture, Foundation of operation, guidance and clarity, grouping of

1. Not knowing what you are trying to achieve

DR K S USMAN MOHIDEEN, B.Com, M.B.A, M.Com, M.H.R.M, M.Sc (Psychology), Ph.D

4. Making decisions and/or having sidebar agreements outside of the agreed-upon

3. Mechanistic and Organic Structure.

UNIT 3 – ORGANIZATIONAL CULTURE

DR K S USMAN MOHIDEEN, B.Com, M.B.A, M.Com, M.H.R.M, M.Sc (Psychology), Ph.D

models, myths – no supported by facts), Organizational Climate (Supportive or Defensive

33. Organic Culture –

18 Have stories about heroes NO such stories

DR K S USMAN MOHIDEEN, B.Com, M.B.A, M.Com, M.H.R.M, M.Sc (Psychology), Ph.D

Strategies for Sustaining Culture:

Leaders react in time of crisis.

CULTURE IS SECURED, ENHANCED AND SUSTAINED BY SOUND STRATEGY

DR K S USMAN MOHIDEEN, B.Com, M.B.A, M.Com, M.H.R.M, M.Sc (Psychology), Ph.D

DR K S USMAN MOHIDEEN, B.Com, M.B.A, M.Com, M.H.R.M, M.Sc (Psychology), Ph.D

UNIT 4 – ORGANIZATIONAL CHANGE

DR K S USMAN MOHIDEEN, B.Com, M.B.A, M.Com, M.H.R.M, M.Sc (Psychology), Ph.D

vii) Lack of tact

xx) Installing system for reward: Appraisal

11. Happened change: Due to external factors

DR K S USMAN MOHIDEEN, B.Com, M.B.A, M.Com, M.H.R.M, M.Sc (Psychology), Ph.D

DR K S USMAN MOHIDEEN, B.Com, M.B.A, M.Com, M.H.R.M, M.Sc (Psychology), Ph.D

1. Unfreezing: Creation of Need.

DR K S USMAN MOHIDEEN, B.Com, M.B.A, M.Com, M.H.R.M, M.Sc (Psychology), Ph.D