Organization Structure

Organization Structure
Organizations Structure
is the framework for
allocating tasks,
delegating authority,
coordinating activity
and channeling
communication
between individual and
groups in the
organization.
Mubashir Wasim (MSc. Economics, MBA

Marketing, MS-IT, MS HRD)
Types of Stakeholders
Stakeholders are any entity (person, group or possibly non-human entity)
that can affect or be affected by the achievements of an organization’s
objectives. It is a bi-directional relationship. Each stakeholder group has
different expectations about what it wants and different claims upon the
organization.
External
Internal
Stakeholders Connected Stakeholders
Lenders Stakeholders:- Shareholders
Suppliers
Non-executive Executive
Government
Customers
directors directors and senior
Local communities Employees managers
Key suppliers Other managers
General public,
Key customers and current
Interest groups
employees (Active).
and Pressure groups

Stakeholders Conflict:-
Stakeholders Conflict
Employees versus Job/wages versus bonus (Cost efficiency)
managers
Customers versus Product quality/service levels versus profits/dividends
shareholders
General Public versus Effect on the environment versus profit/ dividends
Shareholders
Managers versus Growth versus independence
shareholders
Mendelow’s Power and Interest Matrix

Interest
Low High
Low A-Minimal Effort B- Keep Informed
Power High C- Keep Satisfied D- Key Players
A plc has a large number of shareholders. The largest is H- a pension
company. H owns 35% of A’s share capital, while no other shareholders
own more than 10%. However, H has stated that it is satisfied with the
direction of A and has no plans to intervene in the company’s affairs
unless its dividends fall. If A prepare Mendelow’s matrix, which quadrant
would H fall into?

Sequence of 2nd Section of the Chapter 3
Topic Detail
Departmentalization Functional Structure
Divisional Structure
Geographic Structure
Matrix Structure
Span of Control Chain of Command
Narrow & Wide Span
Tall & Flat Structure
Work Specialization
Centralization Centralization vs. Decentralization
Behavioural Structure Virtual Organization
Mintzberg’s Organization.
Mechanistic vs. Organic
Bureaucracy vs. Informal
Emerging Concepts Contingency Theory of Organization
Outsourcing

Entrepreneurial
Structure
Manager – Owner
Early days of Small Business
Advantages
1. Fast Decision There is only one person making decisions- this
Making should lead to decision being made quickly
2. Good Control As soon as an element of the marketing alters, the
3. Close Bond to entrepreneur should recognize it and act quickly
Workforce A lack of chain of command and the small size of
the organization should mean that the entrepreneur
Disadvantages
has control over the workforce and all decisions
1. Capabilities of within the organization to better goal
Manager / Owner This type of structure is usually suited to small
2. Difficulties in companies where due to the size there is no career
Growth & path for the employees.
Diversified If the organization grows, one person will not be
able to cope with the increased volume of decisions
etc. Mubashir Wasim (MSc. Economics, MBA
Functional Organization
Transfer to Entrepreneur Structure to Functional Organization.
Few products, Similar Products
In a functional organization structure, decision-
Advantages:-
making authority is delegated in a formal
1. Economies of
arrangement,
Scale
2. Career
Responsibilities are divided between the
Opportunity
managers of different activities or functions.
3. Specialist not
feel isolated
Typically, functions in a manufacturing entity
include production (or operations), marketing and
sales, and finance and accounting. There might
Disadvantages:-
also be a human relations function, an IT function,
1. Empire Building
a research and development function, and so on.
2. Slow Response
to Change
Department are name with products/areas/customers
Three names:
Profit Canters:
Markets in different geographical areas (for example, the European and
the North American divisions).
Different products (for example the bus division and the rail division of
a transport company).
Different customers (for example, industrial products and consumer
products).
Board of Directors of Hitachi
Home Accessories Heavy Mechanical Industrial Products
Mkt. Fin. Pro. Mkt. Fin. Pro. Mkt. Fin. Pro.

oEach division has its own functional departments, such as marketing
and sales, operations (production), accounting and finance, and so on.
oAuthority is delegated from head office to the divisional management

(led perhaps by a divisional managing director)
oHead office retains overall control, provide , such as corporate strategy,

IT and research and development.

Advantages:- Disadvantages:-
1. Enable Growth 1. Potential Loss of
2. Clear Responsibilty for Control
Product/Customer/Region 2. Lack of Goal
3. Top Management Free to Concentrate Congruence
on Strategic Matters.Mubashir Wasim (MSc. Economics, MBA3. Lack of Economies of
Marketing, MS-IT, MS HRD) Scale
Matrix Organization
Combination of Functional & Divisions
Ideal for Medium Size Organization with Projects/ Products
Project managers were appointed with overall responsibility for
individual projects. Project managers had to organize the efforts of
individuals in all the different functions.
At the same time, functional managers such as management of
engineering, production and sales and marketing, retained their
decision-making authority.

Advantages
1. Can Meet Dual Demand
/Specializations
2. Sharing of Resources Across
Projects
3. Encourage Teamwork
Disadvantages
1. Dual Command & Conflict
2. Time Consuming
3. Sharing of Resources Across
Projects

Past Paper Question- Last Day
Q. (a) Discuss the salient features of a functional organisational
structure and the main advantages that are associated with it.
(07)
(b) Present a chart of the functional organisational structure of a
company engaged in the business of manufacturing of superior
quality sanitary fittings. (03) [S16]
Past Paper Question- Today
Q:Explain what is a Matrix Structure. (04) [A09][Q3]
Q: Explain briefly the main features of a Matrix organization
structure. (05) [S15][Q1_b]

Q.3 (a) Explain what is a Matrix Structure. (Q3_M04_A07)
A Matrix Structure is an organizational structure which is

modified primarily for the purpose of completion of a
specialized project. Essentially, a matrix structure combines
two forms of departmentalization i.e. functional and product.
In a matrix structure, individuals from various functional
departments are assigned to a project while sharing the
specialized resources across products.
Matrix Structure breaks the unity-of-command concept as the
employees in a Matrix Structure report to two supervisors.

Scalar Chain
Define:
Strategic
Tactical
Operational

Narrow Span Span of Control: Define Wide Span
Strengths:- Strengths:-
1. Better Control:- 1. Delegation of Authority:-
2. Smaller Group Better Social 2. Initiative & Creativity:-
Needs:- 3. Less Administrative Costs:-
3. Supervisor can Spare More 4. Flexible Supervision Style:-
Time for Instructing
Subordinates:- Weaknesses:-
4. More Influence of Supervisor:- 1. Weak Control:-
2. Larger Group Weak Social
Weaknesses:- Grouping:-
1. Lack of Delegation of 3. Supervisor Spare Less Time,
Authority:- More Learning from
2. Lack of Initiative & Creativity:- Coworkers:-
3. More Administrative Costs:- 4. Weak Influence of Supervisor:-
4. Rigid Supervision:-
Narrow Span Span of Control: Wide Span
Contingency Theory:-
Discuss the bases on
which an
organisation decide
to follow a
particular span of
control
1. Nature of Work
2. Nature of Worker
3. Nature of Supervisor
4. Location of Personnel

Tall Flat
Organization Organization
A strong cultural
and procedural
emphasis on
formal roles, job
titles and job
descriptions.

Tall Base Flat
Formal Relationship b/w Informal / Friendship/
Close Supervision, formal Supervisor and flexible less emphasize of
roles, job titles and job Subordinates rigid roles, cooperation and
descriptions. mutual adjustment
More Layers Less
Narrow Span of Control Wide
Less Delegation of Very much common
Authority
Generally specialized role, Environment Team work, Multi-tasking,
Life time job Multi-skills
Slow vertical Communication rapid vertical
communication. -many communication - decision-
levels of management, it making. Information travels
can take a long time for quickly from top to bottom
information to get from of the organization
top to bottom -slow to structure and from bottom
react to change. to top. Wider

Q.8 (a) Describe briefly any five functions performed by senior
management in a typical large size business organisation. (05-S17)
(b) What do you understand by the term flat organisational structure?

Briefly describe any four factors which would be of critical importance for
the management of a commercial bank in the implementation of a flat
organisational structure. (05) [S17]
Dealing with different set of customer, business client may need

money in bulk while a consumer loan needs a thousand rupees.
Each area needs careful work not to over commit in term of funds
and time
Coordination is very much important. Loan section or approval,
recovery and customer services.
Customer is closer to the top management, have stronger say…
Authority is delegated to each team, because they are expert in their
job and can make decisions.
Centralization Vs.
Decentralization
In a centralized structure, In a decentralized structure,

the upper level the authority to take
organization’s hierarchy decisions is passed down to
retain the authority to units and people at lower
make decisions. levels.
The factors that will affect the amount

of decentralization are:
Management Style
Ability of managers
Location Spread
Size of Organization.
Centralization Vs.
Decentralization
Advantages of Centralization Advantages of Decentralization

Decisions likely to be taken with Junior (‘local’) managers have much
regard for the corporate objectives better knowledge leads to better
of the entity as a whole. Tactical and Operational decisions
Decisions are co-ordinated more Giving authority to lower level leads
effectively to motivation
In a crisis, it is easier to make Decisions can be taken more quickly
important decisions centrally. at a local level

Mechanistic Organization Organic Organization
Bureaucratic Organization Informal Organization
Span of
Problem of Grape Vine
Control
Formal Organization
Informal
Formal
Informal Organization
Informal
Formal
Need more multi-skill staff

Mintzberg’s five Building Blocks
Strategic apex. This is the top management in the organization.
Operating core. This represents the basic work of the organization,
and the individuals who carry out this work.
Middle line. These are the managers and the management structure
between the strategic apex and the operating core.
Support staff. These are the people who provide support for the
operating core, such as secretarial staff, cleaning staff, repair and
maintenance staff and IT staff.
Techno-structure. These are staff without direct line management
responsibilities, but who seek to standardize the way the organization
works. They produce procedures and systems manuals that others are
expected to follow

Mintzberg’s five Building Blocks
Key Element Strategic- Middle-line Operational Support -staff Techno

apex -core structure
Feature Simple Divisional Professional Adhocracy Machine
Structure organization bureaucracy bureaucracy
Organization Entrepreneur Diverse Hospitals Matrix Mass-
ship- Multinational Professional structure- production
colleges project &
teamwork

Virtual Organization
The virtual company or virtual organization does not have an identifiable
physical existence, in the sense that it does not have a head office or
operational premises. It might not have any employees. A virtual
organization is operated by means of:
IT systems and communications networks – normally telephone and
e-mail
business contacts for outsourcing all operations
Independent research
& development
consulting firm
Factories in South Commission Sales

Korea Representatives

Network Organization:
A small core organization that outsource its major business functions
(e.g. manufacturing) in order to concentrate what it does best.
Modular Organization:
A manufacturing organization that user outside suppliers to provide
product components for its final assembly operations. IBM_Lenovo
Virtual
Factories in
South Korea
Advertising Independent research

& development
Agency consulting firm
Commission Sales
Representatives
Outsourcing
An entity does not need to carry out operations itself. Instead, it can
outsource work to a sub-contractor.
Outsourcing is very common
Entity’s fleet of motor vehicles,
Security services,
IT work
Some accountancy work (for example, payroll operations).
The reasons for outsourcing
Focus on core competencies,
Better focus on specialist area.
Further Specialization and more growth
Problems with outsourcing
The nature of the relationship with suppliers and communication.
Loss of control over the outsourced activities and they are not as
required.

Marketing, MS-IT, MS HRD) CFE College
Q6:20 Culture - basics What do you
Q7:21 Entrenched traits (a) Briefly
understand by the term organizational
explain the term organizational culture
culture? (03)
and its significance for an organization.
(03) ]
Definition:-
Culture
Culture isis expressed
the by Handy asofbeing:
collective programming
the mind which distinguishes the Organization Culture
members of one category of people from
another.
By this Handy means the sum total of the belief, knowledge, attitudes,
norms and customs that prevail in an organization.
Culture Difference in the Different Firms:-Distinguish one group from other:-

Every organization has its distinguish culture, one behavior which is acceptable
in one organization, may not be acceptable for another firm in the same field.
Develop Over Time:-
Culture is developed overtime but can be changed with a single event. Likewise
Death of company founder, or threat from new innovation from competitor.
Importance of Organization Culture
Leader need to understand culture he wants to influence on
subordinates, By understanding the group culture, they can try to
influence it and encourage positive attitudes to work.
A new employee need to understand culture to be the part of
organization
Encouraging the evolution of common goals, common language and
common procedures for solving problems.
Building Character and Behavior which needed, Army, Airforce by
Stories of related issues.
Culture is a power, Pilot never leave airplane in danger, not the law
but culture,
 Captain never leave ship in danger, last man to be rescued.
Q.5 (a) Briefly explain the term Organizational Culture and its
significance for an organization. (03-Sep-09)
Schein- Cultural Factors
Artifacts:- these are the aspects of culture

that can be easily seen, e.g. the way that
people dress.
Espoused Values:- these are the strategies

and goals of an organization, including
company slogans etc.
Basic Assumptions and Values:- Far granted

Assumptions: these are difficult to identify as
they are unseen, and exist mainly at the
unconscious level.
Now employee find the last level of culture
the most difficult to understand, and lack of
understanding of the basic values is one of
the main contributors to failure when trying
to implement change.
Q7: Schein and culture (a) (i) What are the three levels of culture
identified by Schein? (ii) Which of these levels of culture is the most
difficult to interpret and understand? (iii) Which of these levels of
culture is the most difficult to change? (04)
(b) A music publishing company operates from a single office building.
Everyone in the company calls each other by their first name or familiar
name. All meetings between employees or with clients and customers
are held in a cafeteria on the second floor of the building, and there are
no meeting rooms or other meeting spaces. Which of the three levels of
culture, as identified by Schein, do these features of the company
represent? (03)
Charles Handy Cultural Types
Q.8 (a) What do you understand by the term Organisational Culture? (02)
(b) Explain the salient features of the following: (i) Power culture (ii)
Role culture (iii) Task culture (A16-06)
Power Culture:- Zeus
There is one major source of power and influence. This is most
likely to be the owners of the organization, who strive to maintain
absolute control over subordinates. There are few procedures and
rules of a formal kind.
Quick to response the change.
Role Culture:- Apollo
In the role culture, people describe their job by its duties, not by
its purpose. It is a bureaucratic organization, where the structure
determines the authority and responsibility of individual and
there is a strong emphasizes on hierarchy ands status.
Ideal for the large size of organizations. Old and traditional
organization also prefer it.
Task Culture:-Athena
The task culture is best seen in teams established to achieve specific
takes, e.g. Project teams. People describe their positions in terms of the
results they are achieving. Nothing is allowed to get in the way to of task
accomplishment. If individuals do not have the skills or technical
knowledge to perform a task they are retrained or replaced.
Power and respect come from individual knowledge rather than rank or
position.
Although a structure existed but it is flexible and capable of being formed
and reformed depending upon the takes in hand. Structurally this culture
is often associated with the matrix structure.
Person Culture:-Dionysius
The person culture is characterized by the fact it sexists to satisfy the
requirements of the particular individuals involved in the organization.
The person culture is to be found in a small, highly participatory
organization where individuals undertake all the duties themselves, for
example, a barrister in chambers.
Q2: Q.8: (a) What do you understand by the term Organizational
Culture? (02)
(b) Explain the salient features of the following:
(i) Power culture
(ii) Role culture
(iii) Task culture (A16-06m)
Hofstede
Hofstede research finds out the national differences between over 100,000 of
IBM’s employees in different parts of the world. In an attempt to find aspects
of culture that might influence business behaviour.
He found five traits or cultural dimensions:
Individualism vs. Collectivism:-
Looks at the extent to which people are integrated into groups. Some cultures
are more cohesive than others. E.g. Anglo Saxon cultures are generally more
individualistic than the collectivist cultures of South American.
Uncertainty Avoidance Index:-
Deals with a society’s tolerance for uncertainty and
ambiguity e.g. France and Japan use bureaucracy to
reduce uncertainty because they dislike it.
Low uncertainty avoidance indicates a society that is
not rule-oriented and has greater tolerance for a
variety of ideas, thoughts and beliefs.
Power Distance Index:-
the extent to which the less powerful
members of organization and institutions
accept and except that power is distributed
unequally e;g. in South American society
differences s in poser were tolerated more
than in North European cultures.
Masculinity vs. Feminity:-
A masculine role in one where the distinction
between the role so the genders are large and
males focus on work, power and success.
(toughness and the desire for material wealth and
possessions) Like in Japan while nothing like this
in Finland.
Other society care for social value, relationship
and no discrimination between male and female
(value personal relationships, belonging and the
quality of life).
Long-term orientation versus short-term orientation.
In some countries, there is a greater focus on short-term goals and
short-term results, whereas in other countries there is a greater
willingness to consider the longer term. Short-termism is a feature of
organization culture in the US and much of Western Europe.
Q11: Hofstede and culture Hofstede identified ways or ‘dimensions’ in which the culture
in organisations differs between countries. In each of the following four cases, which of
the dimensions identified by Hofstede would explain the differences in culture between
the two countries?
(a) In country A, it is usual for the senior management of stock market companies to
defer major expenditures in order to improve the reported current year profits. In
country B, it is common for the annual report of major stock market companies to
explain at length the company’s strategies and commitment to plans for capital
expenditure.
(b) In country C, it is usual for investment banks to pay large annual cash bonuses to
individual bankers on the basis of their performance in the year. In country D, it is usual
for similar banks to determine annual cash bonuses on the basis of performance by
groups or teams within the bank.
(c) In country E, a much-praised quality of office workers such as accountants is an ability
to turn up for work on time every day, regardless of difficulties with transport or weather.
In country F, late arrival at work due to transport problems is accepted as a normal fact
of life, and poor time-keeping does not matter as long as the work gets done.
(d) In country G, it is normal practice for decisions to be taken collectively and by
consensus of management and employees. In country H, it is the usual business culture
for decisions to be taken by the boss without consultation with anyone else. (08)
Hofstede and culture (a) The differences between business culture in
country A and country B can be explained by short-term orientation (in
country A) versus long-term orientation (in country B).
(b) The differences between business culture in country C and country D
can be explained by individualism (country C) versus collectivism
(country D).
(c) The differences between business culture in country E and country F
can be explained by uncertainty avoidance. When the desire to avoid
uncertainty is high, work habits such as punctuality and predictability are
given high praise (as in country E).
(d) The culture in country H where decisions are taken by a boss without
consultation is an example of masculine culture. The culture in country G
of collective decision-making and consensus is more feminine. (In
addition, it could also be argued that the differences in culture are
explained by the powerdistance dimension.)
The Cultural Web by Johnson & Scholes

The Cultural Web by Johnson & Scholes
The interrelated elements which are unique to a typical large business
entity and are manifested in its cultural web comprise of the following
elements:
(i) Organisational structure –
• The organisation culture establishes relationships between the
different work groups
• It is a picture of the importance/dominance of particular
divisions/departments in achieving the overall objectives of the
corporation.
• Organization culture is influenced by organization structure.
(ii) Power structure –
• Individuals who are in a position of power influence ,
• Power is normally obtained form management position,
• Can also come form personal influence, experience and
expertise.
The Cultural Web
(iii) Stories and myths –

• Used to describe the history of an organization
• Used to suggest importance of certain individual or events
• Passed by word of mouth
• Help to create an impression of
• How the organisation got to where it is
• It can be difficult to challenge established myths.
(iv) Routines and rituals –
• Routines are ‘the ways things are done around here’
• Individual get used to the established ways of doing things
• Rituals are special events in the ‘life’ of the organisation, which
are an expression of what is considered important.
The Cultural Web
(iv)Symbols – Symbols can become a representation of organisation.

• Might be a car or helicopter
• An office building
• A logo or style of language printed
• A style of language or words used by member of an organisation.
(v) Control systems - In terms of achievement what is important (Critical
Success Factors) and what is not so important in terms of
• Performance measurement
• Reward measurement
• Key Performance Indicator (KPI)
Q.11 According to Johnson and Scholes, corporate entities have ‘cultural
webs’ which are unique to their particular working styles. Employees at
various tiers of the organisational hierarchy imbibe the prevailing
organisational culture which comprises of a set of beliefs, values and norms
for day-to-day working and achievement of long-term goals.
Identify and explain briefly any five inter-related elements which are
unique and can be readily observed in the cultural web of a typical large
corporate entity. (10) [S15]
Q1: Q.2 According to Johnson and Scholes, there is a cultural web within
every organisation. The cultural web consists of six elements of culture.
Link each of the scenarios presented below with any one of the cultural
elements suggested by Johnson and Scholes:
(i) The company logo is affixed on the entrance wall of the office building.
Inside the office, plates are displayed on the walls displaying company’s
products and other motivational quotes.
(ii) Company celebrates personal milestones e.g. birthday parties,
retirement celebrations, last day parties, etc.
(iii) CEO’s personal assistant is influential enough to assign tasks to staff of
all departments.
(iv) It is a general belief in the company that the father of existing
managing director has played the most vital role in the turnaround of the
company.
(v) Electronic attendance terminals are placed at the entrance and all the
employees are required to mark time-in and time-out on daily basis.
(vi) The entity is controlled and regulated by bureaucracy and the
emphasis is on control through regulation. (06)
Ans.2
(i) Symbols
(ii) Routine and rituals
(iii) Power structure
(iv) Stories and myths
(v) Control systems
(vi) Organisation structure
Managing Change
Chapter#4 / Gride : B
Types of Changes
Acc. Planning Nature of Change
Planned / Proactive Unplanned / Reactive Transformational Incremental

Triggers for change
A trigger for change might come from either outside or inside the entity.
External triggers for change
Political reasons for change
Unexpected political crisis – such as a civil war or major civil unrest
Economic reasons for change
Foreign sales or expansion into foreign markets, inflation, GDP Growth.
Social, Demographic and cultural reasons for change
Changing public attitudes about food, food market need to develop new
products.
Change in fashion, designs and arts
Change in age of population compel to change the retirement age.
Technological reasons for change
IT & Communication revolution,
LED technology,
Aerodynamics and aeronautics,
Containerization and huge ships development
Factors Triggers
Change
External
Internal
Political Change of senior management.

Economic Acquisitions and mergers.
Social Demergers and divestments
Technological Re-organisation,
Ecological
legal

Attitudes to Change
Some employees might welcome change and support the changes.
More often, however, employees fear change and resist change. Two
factors act as blockages to change.
i. Attitudes
ii. Culture
Reasons related to job:
Employees think about their job and themselves
Job at risk, and make them redundant.
Technological change- their skills may not required
Working condition becomes worse.
Attitudes to Change
Personal reasons and fears:

Employees think
Less important to their employer
Bear criticism the way they have been working.
Their work will be less interesting.
Reluctant to learn new ways of working.
Fear to be unknown
Social reasons
Employees might resist change
It will break up their workgroup,
Separate them from the people they enjoy working with.
They will be forced to work more,
There will be less interaction with colleagues.
Expect bad relationship with manager implementing change
Dislike the way in which change is implemented
There will no industrial democracy, they don’t have any say
Reaction to Change
Entrenchment where employees refuse to change. Leads to
disciplinary proceedings and potentially dismissal.
Willing and enthusiastic acceptance. This positive approach is more
likely to end in win-win whereby the organisation achieves its change
employee may embrace the opportunity to learn new skills and
experience different working practices.
Begrudging acceptance where employees do not support the change
but not resisted against. this lack of support during the change may play
against them in the future, may not be promoted.
Strike action: Strikes bring negative publicity to an organisation and can
harm the levels of service provided to customers..
Guidelines for Change
(i) Objective of change: where we are and where want to be

(ii) Communicate & get acceptance
(iii)Reward systems
(iv)Critical success factors
(v) Support
(vi)Training
(vii)Paradigm Change

Q.1 In the rapidly changing business environment, dynamic
organizations have to continuously anticipate the impact of these
changes on their business and introduce modifications in their
organizational structures to enable them to improve and further
consolidate their competitive advantages.
(a) Identify and describe the factors which make it necessary for
businesses to introduce changes in their organizational structures.
(06)
(b) Briefly explain the strategies which are usually adopted to
overcome the resistance to change in an organization. (06) [S10]
Q.11 Any major change in internal business environment is bound

to face stiff resistance. What types of organizational strategies are
required to introduce changes successfully and reduce the level of
resistance from the employees? (05)[A06]
6 (b) Zen Courier Co (ZCC) is a mid-sized courier company and in the past
was reconciled with its market-follower status as three companies
dominated the business. Recently, ZCC has negotiated an agreement
with Global Couriers, a leading international courier company. Global
Couriers would make equity investment in ZCC and also provide technical
expertise to ZCC to enable it to be an important player in the courier
business in the country. This significant expansion in the scale and scope
of ZCC’s business would require major changes in the organizational
structure and involve redundancy of several employees, besides
induction of new employees with relevant skills.
Required: Explain briefly the factors which ZCC would need to
consider for successful change implementation. (06)
ZCC should keep the following factors in perspective for successful
change implementation:
(i) The management of ZCC should have a clear understanding of the
precise need for change and the objectives to be achieved by the
change.
(ii) The need for change should be communicated to all those
individuals who would be affected by the change. This should entail
candid two-way communication between management of ZCC and
the affected employees.
(iii) Reward systems may need revision so that rewards to managers and
other employees are based on the new set of performance targets.
(iv) Critical success factors and key performance indicators may be
revised to make them compatible with the changes in ZCC’s business
objectives.
(v) Those employees who would be retained in the organisation may
need training to meet the operational requirements due to change in
the scope and objectives of the business.
Examiner Comments
More focus on points not implementation.
Confuse not understand what to right
Most students written down irrelevant answers
Models of Change Management: Force Field Analysis by Kurt Lewin
The theory describe the forces that came into conflict over planned
changes. There are two opposing forces:
The driving forces that support the need for change, and
The restraining forces that oppose and resist the change. Any of the
following factors might be a driving force or a restraining force:
Models of Change Management: Force Field Analysis by Kurt Lewin
Driving Forces Factors Restraining Forces

Prefer organization the people involved in the What they want for
objective, there is link change, themselves, own interest
between organizational is preferred over
objective and individual organizational interest.
objective
Involve in new activities the habits and customs of Fallow tradition,

the individuals
Creative and Innovative their attitudes Idle, avoiding and rigid
Friendship for completion the relationships between Conflicts
of mission the people involved
Can flexible and organisation structures Unchangeable and cannot
accommodative within the entity cope up with change.
Available the resources to make the Shortfall
change
Happening Event No Significant Event
Lewin also argued that:
Change will not occur if the forces resisting the change are stronger
than the driving forces for change.
Change is only possible when the driving forces for change are
stronger than the restraining forces against change.
Strengthen the driving forces for change It might seem that the best
answer is to strengthen the driving forces for change.
Reduce Restraining Forces
The best approach is therefore to try to reduce the restraining forces
against change. Management should therefore: consider ways of
reducing their strength, for example by discussing the issues and
difficulties with the individuals concerned, or by trying to win the
support of key individuals who currently oppose the change.
Q: Model Central Hospital (MCH) is currently experiencing
serious problems resulting in overall poor performance of the hospital.
These problems are attributable to the indifferent attitude and lack of
commitment of a group of doctors and ancillary (secondary) staff in the
hospital.
The board of trustees of MCH is concerned with the gravity of the
problems and has appointed Dr Mushtaq, a hospital management
specialist, with far-reaching powers to implement change measures for
improvement in the affairs of the hospital.
(a) Analyse the above situation in the context of Lewin’s force field
analysis model of change. (03)
(b) Discuss the measures that Dr Mushtaq should take in terms of Lewin’s
force field analysis model of change stating the actions to be taken at
different stages of the change process. (06) [S17][10 March 2017 ]
Lewin: unfreeze, change, re-freeze
The change process then needs to go through three stages:
• unfreeze
• movement (change)
• re-freeze
Unfreeze
Individuals will not want to change anything if they think that the
current situation is acceptable. Recognize what is wrong with the
current system or current situation
 Encourage employees to feel dissatisfaction with mention activity.
 Clear vision about what changes they want to make,
 They should encourage employees to want these changes to
happen.
Lewin: unfreeze, change, re-freeze
.
Movement (change)
The changes should then be made.
 The support for change must be strong enough to overcome the
opposition.
 Management should be given sufficient resources to implement the
changes
 Get employees to participate in making the changes
 Their participation can reduce resistance.
Re-freeze
The process of getting employees to carry on with the new system is
called refreezing.
 There is risk that employees again use old ways
 Employees should be encouraged to carry on with the new way of
doing things.
 Reward employees for performance based on the desired
behaviour and results.
Q.4 The Linguist (TL), a learning language institute, has been offering
customized programs to the students. TL had gained recognition for its
services in terms of highly qualified teachers and competitive pricing.
However, in the past two years, student intake of TL has reduced
significantly as more students have enrolled with a competitor who is
offering online programs. To achieve cost efficiencies and to compete
effectively, the management of TL is considering to discontinue the
classroom teaching and to start offering online programs by connecting
students and teachers through video conferencing.
Required:
(a) List any four reasons because of which TL’s employees may resist the
above change. (02)
(b) Suggest how management of TL can implement the above change in
accordance with the change process suggested by Kurt Lewin. (06) [S18]
Solution
The management of TL can implement the change in accordance with the
change process presented by Kurt Lewin as follows:
(i) Unfreeze In the first stage, management of TL would have to
persuade employees that change is imminent. They should be
encouraged to feel dissatisfied with the current system i.e. ‘unfrozen’
out of their acceptance of the current situation. Further, the
management should also offer employees an attractive alternative for
the future that can be reached by changing the current situation.
(ii) Movement (change) In this stage, actual change is to be made.
Management of TL should make sufficient resources available to
implement the change. It should encourage employees affected by the
change, to participate throughout the change process it would help in
reducing the resistance to change.
(iii)Re-freeze This is the stage where change has been implemented. At
this stage, management should ensure that employees continue to
carry on with the new ways by rewarding them for performance based
on the desired behavior and results.
McKinsey 7S Model
The 7S Framework was first published in 1981 and was subsequently
adopted by the consultancy firm McKinsey.
McKinsey 7S Model
Hard Factors
Soft Factors
Strategy
Goals and objectives of the entity,
Plan for optimal use of resource
Structure
Allocate task & authority
Ensure coordination and Communication.
Systems
System that can best use of resources
Generate outstanding value
McKinsey 7S Model
Staff: Attribute associated with people work in organisation-

 numbers,
 motivation,
 loyalty,
 pay rates,
 working conditions,
 career advancement
Skills: These are the
 Skills of key personnel.
 What can they do well
 What do they do badly
Style: Culture aspects
 Style
 Norms
Shared values:
 Customer Support
 Generating Profit
 Deliver to Community
Q.4 (a) Briefly discuss three key attributes of highly change-adept
organization. (03)
(b) Human resource function of Shayan Limited (SL) has been outsourced
to Talent Hunt Limited (THL) for past many years. However, the
management of SL is not pleased with some of the newly hired personnel
recruited on the recommendation of THL. Further, contract with THL is
expiring in two months and THL has demanded 25% increase in fee on
renewal of contract.
The management of SL is considering not to renew the contract with THL
and intends to establish an in-house human resource function.
Required:
Identify and briefly discuss the seven factors mentioned in the 7S model
presented by McKinsey, that SL may consider while implementing the
above change. (08) [A18]
&
SL should take into account the following factors mentioned in 7S model:
Hard factors:
(i) Strategy Goals, objectives and a plan for allocation of resources for
in-house human resource function.
(ii) Structure Assigning of responsibilities, lines of reporting and
coordination among human resource function staff.
(iii) Systems Specific processes, procedures and information systems
for human resource function.
Soft factors:
(iv) Staff Number of people needed for the human resource function
and related factors such as rewards, training, motivation, loyalty, working
conditions, etc. (v) Skills Capabilities and competences that staff
must possess to perform the human resource activities
(v) Style Leadership style and organization culture expected to be
followed at human resource function.
(vii) Shared values Sharing of norms and standards by human resource
function that reflect the purpose of SL.
Gemini 4Rs Model
Introduced by Gemini Consultants.
Re-frame Create Re-structure Examine

the desire and the organisation
vision for change. structure, and create
an economic model
Create a shows use of
measurement resources and how
system to measure much value is created
performance. (Cost & Benefits)
Revitalise
Commitment for
Re-design the future. Find new
products and new
processes which markets and invent
create more value. new businesses.
Change the rule of
game.
The ‘change agent’
When a transformational change is implemented, there has to be a
‘change agent’ who drives the change and is responsible for its
successful implementation. Often the change agent is an outside
consultant. This individual must have certain skills.
He must explain the reasons for the change, and provide employees
with reliable information. This will help to reduce the risk of false
rumours spreading.
As far as possible, he should involve the individuals affected, and get
them to participate in making the changes. As a result they will not
resist.
He should maintain communications with employees at all time,
monitoring the progress of the change and providing information to
others about the progress.
Where appropriate, he should provide training to the employees
affected.
He should emphasise the benefits of the change to the individuals
affected. Not on the drawback
The ‘change agent’
A consultant is often used because:

An outside consultant is perceived to be independent and fair.
The consultant will have experience in managing the change process.
Can give better suggestion.
Large-scale changes are cost and disastrous if go wrong. Get advice if
available.

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Organization Structure

Mubashir Wasim (MSc. Economics, MBA

Mubashir Wasim (MSc. Economics, MBA

Mendelow’s Power and Interest Matrix

Mubashir Wasim (MSc. Economics, MBA

Mubashir Wasim (MSc. Economics, MBA

Board of Directors of Hitachi

Home Accessories Heavy Mechanical Industrial Products

Mkt. Fin. Pro. Mkt. Fin. Pro. Mkt. Fin. Pro.

Mubashir Wasim (MSc. Economics, MBA

oAuthority is delegated from head office to the divisional management

oHead office retains overall control, provide , such as corporate strategy,

Mubashir Wasim (MSc. Economics, MBA

Mubashir Wasim (MSc. Economics, MBA

Mubashir Wasim (MSc. Economics, MBA

Mubashir Wasim (MSc. Economics, MBA

A Matrix Structure is an organizational structure which is

Mubashir Wasim (MSc. Economics, MBA

Mubashir Wasim (MSc. Economics, MBA

Mubashir Wasim (MSc. Economics, MBA

Mubashir Wasim (MSc. Economics, MBA

Mubashir Wasim (MSc. Economics, MBA

(b) What do you understand by the term flat organisational structure?

Dealing with different set of customer, business client may need

In a centralized structure, In a decentralized structure,

The factors that will affect the amount

Advantages of Centralization Advantages of Decentralization

Mubashir Wasim (MSc. Economics, MBA

Bureaucratic Organization Informal Organization

Need more multi-skill staff

Mubashir Wasim (MSc. Economics, MBA

Mubashir Wasim (MSc. Economics, MBA

Key Element Strategic- Middle-line Operational Support -staff Techno

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Factories in South Commission Sales

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Advertising Independent research

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Culture Difference in the Different Firms:-Distinguish one group from other:-

Artifacts:- these are the aspects of culture

Espoused Values:- these are the strategies

Basic Assumptions and Values:- Far granted

Mubashir Wasim (MSc. Economics, MBA

(iii) Stories and myths –

(iv)Symbols – Symbols can become a representation of organisation.

Acc. Planning Nature of Change

Planned / Proactive Unplanned / Reactive Transformational Incremental

Political Change of senior management.

Mubashir Wasim (MSc. Economics, MBA

Personal reasons and fears:

(i) Objective of change: where we are and where want to be

Mubashir Wasim (MSc. Economics, MBA

Q.11 Any major change in internal business environment is bound

Driving Forces Factors Restraining Forces

Involve in new activities the habits and customs of Fallow tradition,

Staff: Attribute associated with people work in organisation-

Re-frame Create Re-structure Examine

A consultant is often used because:

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