Organization effectiveness

constituency (strategic) system resource - bargain internal process (adaptability, identity, perception) legitimacy
goal

Organizational goals (Perrow, 1961)

Official goals described in charters, public statement; serve as legitimating devices for the organization
Operative goals organizational ends pursued through

actual policies and decisions of the organization Operative goals may be in line with official goals The goals most often utilized to assess effectiveness of an org. are the operative ones

Healthy organization internal process

Healthy

good adaptability with environment strong identity ability to perceive the world and herself correctly Adaptability problem solving (internal integrity & external adaptation) Identity - goals are understood and accepted by members perceived by members Concepts of organizations (manifest formally displayed on
organizational chart, assumed members perceive as they way things work, extant revealed through systematic investigation, and requisite situation expected by members); healthy, when the four concepts are closely in line with each other

Adaptable learning organization

A learning organization is an organization skilled

at creating, acquiring, and transferring knowledge, and at modifying its behavior to reflect new knowledge and insights Learning organizations are skilled at five main activities: systematic problem solving, experimentation with new approaches, learning from their own experiences and past history, learning from the experiences and best practices of others, and transferring knowledge quickly and efficiently throughout the organization

organization
Consciously coordinated social unit, composed of two

or more people, that functions on a relatively continuous basis to achieve a common goal or set of goals A tool used by people to coordinate their action to obtain something they desire or value

To be cont.
Organizations increase value

create knowledge core competence competitive diversity efficiency innovation

To be cont.
Organizational stakeholders

those having interest, claim, stake in what the organization does and how well it performs inside (shareholder, manager, workforce) outside (customer, supplier, government, union, local communities, general public)

To be cont.
Ethics CSR

sources

societal ethics professional individual

family friends school religion organization

problem

self-interest outside pressure (e.g. Enron, Lapindo)

Visi, misi
Visi, misi titik awal renstra Pencapaian visi libatkan perubahan Visi, misi bukan hanya diformulasikan saja, tapi harus dikomunikasikan dan di shared program visioning VIA (cf. strategy in action) Visi menarik menantang dapat dipercaya memberikan inspirasi

 Visi mimpi seorang pemimpin berdasarkan

kenyataan (campuran antara kenyataan dan mimpi) Vision the right one is the toughest task and the truest test of great leadership (Nanus) Visi konotasi ideal image yg hidup standard excellence

Managing in a changing global environment

Cf. system theory open Organization strategic environment (fig.3-1, p. 57)

general specific Domain good, services, customers & other stakeholders protected & enlarged to increase values

system
Cf. Ludwig von Bertalanffy, Austrian biologists, 1969 General System theory Katz & Kahn open system (input-process-output) An entity that has interdependent parts and a purpose All systems have basic characteristics:

operate within an environment (things outside and important to the org. but largely beyond its control)

focus on the interrelatedness among systems

negative entropy feedback

dynamic homeostasis/balance
differentiation equifinality

Organizational environment
Demographic and cultural forces
customers International forces distributors Political forces

government

The organization

unions

suppliers

competitors

Environmental forces

Economic forces

Technological forces

To be cont.
Environment uncertain

complexity

dynamism

richness
Resource resource dependence theory Strategies for managing resource dependence

symbiotic vs competitive interdependencies

Strategies for managing symbiotic resource interdependencies

Developing a good reputation Co-optation political tool, by neutralizing problematic forces Strategic alliances sharing resources to develop joint new business opportunities networks long-term contract joint venture (jointly
establish & share ownership of a new business)

minority ownership (cf. The Fuyo Keiretsu)

Strategies for managing competitive resource interdependencies

collusion and cartels (-) (+)

third party linkage mechanism

strategic alliances merger and takeover

To be cont.
Transaction cost theory

minimize cost of managing exchanging resources in the environment and of managing exchanges inside the org. Case How Ford manages its environment (p.85)

Creating and managing organizational culture

Corporate culture relatively new focus in studying

organizations (cf. Pettigrew, 1979) he felt that culture was neglected in the field of organizations Early 1980s research in industrial sociology, psychology, and management science two major journals in organizational studies: ASQ (1983), and Organizational Dynamics (1983) Culture is fuzzy and difficult to define terms bearing a family resemblance notions of shared values, common understandings, patterns of beliefs and expectations, and behavioral norms

culture
Culture set of shared values and norms that controls organizational members interactions with each other and with people outside the organization Values terminal instrumental Layers of culture artifact patterns of behavior behavioral norms values fundamental assumptions

culture
System of shared symbols and meanings (Geertz, 1973) System of publicly and collectively accepted meanings

(Pettigrew, 1979) Values, beliefs, and expectations that members come to share (Van Maanen & Schein, 1979) The set of symbols, ceremonies, and myths that communicate the underlying values and beliefs of the organization to its employees (Ouchi, 1981) The way we do things around here (Uttal, 1983) The glue that holds together an organization through shared patterns of meaning (Martin & Siehl, 1983) Socially constructed realities that provide learned ways of coping with experiences (Thompson & Luthans, 1990)

Hofstedes dimensions of cultural values: Individualism vs collectivism Power distance Uncertainty avoidance Feminity vs masculinity Short-term vs long-term oriented (Chinese Value Survey)

Do the cultural frameworks really explain cultural differences? Do American theories apply abroad? Martin Gannon & associates, 1994 cultural metaphors:

country england germany italy japan nigeria russia turkey US

metaphor traditional british house symphony opera garden marketplace

ballet coffeehouse football

culture
How is it formed?
property right system characteristics culture of people in the org. org. structure

organizational ethics

How is an organizations culture transmitted to its members? Socialization

Role orientation

institutionalized individualized

how newcomers respond to a situation

Collective, formal Sequential, fixed Serial, diverstiture

Individual, informal Random, variable Disjunctive, investiture

 Stories, ceremonies, and organizational language

Rites
Type
Rite of passage

example
Induction & basic training
Office christmas party

purpose
Learn & internalize norms and values
Build common norms & values

Rite of integration

Rite of enhancement

Presentation of annual award

Motivate commitment to norms and values

Where does organizational culture come from?

Characteristics of people within the organization Organizational ethics Property rights (managers vs workforce) Organizational structure (cf. mechanistic vs. organic)

Tall, highly centralized, standardized

Flat, decentralized, Rely on mutual adjustment

To be cont.
Levels of culture (Rousseau, 1990 fundamental assumptions, values, behavioral norms, patterns of behavior, artifact/manifest culture Sathe, 1985 manifest culture, expressed values, basic assumptions cf. iceberg phenomenon manifest

Expressed values e Basic assumption

Water line iceberg

Culture to be cont.
Managing cultures? Social responsibility! Approaches defensive accomodative proactive
Case for analysis A tale of two cultures (p. 201)-

Southwest flat, informal, creative, cooperative -- Value Line efficiency, clean surfaces report, no culture of cooperation,etc

Culture-performance link
Culture long-term economic performance!
Kotter & Heskett: strong, strategically appropriate,

adaptive Iswanto: integrative, congruent with strategy, unique, employee-oriented, consistent, adaptable, missiondriven

Transformasi nilai (cf. Kasali, 2005)

Culture is what keeps the herd (of employees) moving

roughly west (Walton) Pada masa transisi setidaknya ada 7 budaya negatif yang mengontaminasi organisasi (Deal & Kennedy, 1998): culture of fear, of denial, of self-interest, of cynicism (mencela), of distrust, of anomie, and the rise of underground subculture (mengedepankan kelompok)

 Ketika ada tuntutan peran baru, muncul nilai-nilai ikutan yang tidak dikehendaki:

Tuntutan peran baru

Daya saing

Nilai ikutan yg tak dikehendaki

Manipulasi Perilaku kurang loyal Ketidakpercayaan Self-interest Korupsi Kedaerahan kekuasaan

Efisiensi Pelayanan Keterbukaan Kewirausahaan

Budya korporat
Cf. Konosuke Matsushita misi sebuah industri

membebaskan masyarakat dari kemiskinan dan kesulitan-kesulitan hidup, menjadi sebuah kemakmuran yang sejahtera (1932) Dia yakin bahwa perubahan harus dimulai dengan figur, kerja keras, dan filosofi Ketika masa sulit, dia bersama kepala pab rik turun ke toko-toko, dan memberikan contoh pelayanan

Lapisan budaya korporat

Visible artifacts: Simbol kasat mata (logo, merek) Seremoni Slogan Ritual, perilaku dsb

Nilai dasar & keyakinan Asumsi Kepercayaan Sikap Perasaan Sejarah korporat

Karakteristik budaya korporat

Dibentuk oleh keyakinan individu korporat Mencerminkan aspirasi anggota Memiliki sosiodinamika Memiliki konsekuensi Sulit dipahami Membentuk identitas, memperkuat image, positioning, dan pencapaian tujuan Menuntut keseimbangan antara nilai-nilai belajar Adalah pola Membentuk hubungan sinergi Terdiri atas subkultur

Hubungan antara lingkungan dan strategi manajemen terhadap budaya

ekstern

Budaya adaptasi

Budaya misi

Fokus adatasi
intern Budaya partisipatif Budaya konsisten

labil

stabil

Keadaan lingkungan

Memperkuat budaya baru

Budaya disiplin utk meraih keunggulan bersaing

(Collins, 2001 all companies have a culture; some companies have discipline; but few companies have a culture of discipline): rekrut yg terbaik berikan pengertian yg terbaik letakkan pada kursi yg tepat keluarkan yg di bawah standar

Organizational design and strategy in a global environment

Organizations vie/exist, grow, create values competitive advantage

core competence strategy (decisions & actions) skill, abilities efficiency, quality, innovation, etc

Design & strategy

Core competence strategy create values competitive adv. Sources functional organizational coordination ability global expansion

transferring core competence abroad: global network, access to global resources & skills, global learning

Strategy -- levels
Functional-level functional resources organizational resources coordination ability Business-level combining functional core competences top-management team Corporate-level protect, enlarge, and expand into new domains Global expansion

strategy
Strategic goal core competence competitive adv.
Lower costs

differentiate products Design? structure! (cf. fig.8-3, p. 236) culture level!

Design -- strategy
Strategy

plan of action to create value

organizations at all levels (functional, business, corporate, global) develop value-creation skills and abilities
Managers manage strategy, structure, and culture

to protect its domain , to create value to satisfy stakeholders (cf. p. 259 Analyze case Levi Strauss goes global

Organizational change
Hiraclituss penta rei
(planned) change to find new/improved ways of using resources and capabilities in order to increase an organizations ability to create values and improve returns to its stakeholders Levels of change

human resources functional resources technological capabilities organizational capabilities

levels of change
Human resources

training & dev. organizational culture diversity promotion & reward system organizational learning & decision
structure culture technology

Functional resources

To be cont.
Technological capabilities redesign of

organizational activities Organizational capabilities through design of structure & culture

The four levels are interdependent! Human resource change new functional

resource/new technological capabilities, etc

Forces for change

Competitive forces
Economic, political, and global forces (cf. Nafta, Afta,

Apec, EU, ACFTA, etc) Demographic and social forces (diverse work force, cf. learning to live together) Ethical forces (!?) Nike, adidas, etc.

Resistances to change
Organization-level

power & conflict differences in functional orientation mechanistic structure organizational culture

Group-level groupthink (Janis, 1972) members of highly cohesive group

unable to evaluate each others inputs critically:

Illusions of invulnerability Illusions of unanimity Illusions of group morality Stereotyping of the enemy as weak, evil or stupid Self-censorship by members Mind-guarding Direct pressure

To be cont.
Groupthink develops under these conditions:
There are highly cohesive individuals

The group closes itself from outside information/opinion

Group members seldom systematically evaluate

alternatives to come to appropriate conclusion The group is under pressure to reach a decision The group is dominated by a strong figure

To be cont.
Individual-level uncertain, insecure, habit, perceptual process

selective

Managing change
Approaches

leadership top-down change fails (lower level employees know best what requires change) no agreement what and how to change OD applying social sciences research and theories to create more rational organization Improve efficiency & effectiveness Organizational health building capacity to change

To be cont.
Lewins planned model of change (modified)

diagnosis unfreezing movement refreezing (institutionalization of change) renewal

To be cont.
Cf. fig. 10-2, p. 309

forces for change and resistance to change are equal no change!

To change managers must increase forces for

change, or reduce resistance to change, or do both

change
Evolutionary (cf. incremental, operasional) sociotechnical system theory total quality management creation of empowered, flexible work group
Revolutionary (strategis, radikal) reengineering restructuring innovation

OD-dealing with resistance to change

Education & communication
Participation & empowerment Facilitation Bargaining & negotiation Manipulation Coercion

OD to promote change
The more revolutionary, the more likely the org. to use

OD techniques at three levels individual, group, organization Changing attitudes & behavior counseling sensitivity training process consultation Case Sears changes again and again, p. 334

Organizational transformations: birth, growth, decline, and death

Organizations may survive, prosper, fail or die

ability to manage strategies, structures, cultures to gain access to environmental resources life cycle: birth, growth, decline, death at different rates

Organizational birth
Entrepreneurs recognize and take advantage of

opportunities to use skills and competence to create values Risky stage new experience, uncertainty Lacks formal structure flexible written! Environment may be hostile! Develop a business plan! goods/services, customers/market SWOT analysis! FS detailed business plan (mission, vision, strategy, resources, schedule)

To be cont.
Population ecology model explaining factors that affect the rate at which new organizations are born in a population of existing organizations

birth can be rapid or decrease! strategies r vs k-strategy specialist vs generalist

Organizational growth
Develop value-creation skill and competences, allowing to acquire additional resources Institutional theory studies how organizations can increase ability to grow and survive in a competitive environment by becoming legitimate in the eyes of stakeholders Adopting institutional environment (values, norms, goals, structures, cultures etc) Organizational isomorphism: coercive, mimetic, normative

Implications for managers

Analyze the resources in the environment to determine a niche Then, how you compete Develop the competence/strategy to attract resources Analyze the institutional environment to learn values, norms, benchmark Anticipate/prepare for problems, management team Manage crisis

To be cont.
Greiners model
grow through creativity crisis of leadership grow through direction crisis of autonomy grow through delegation crisis of control grow through coordination crisis of red tape grow through collaboration crisis of ?

Organizational decline and death

Decline fail to anticipate, recognize, avoid, neutralize, or

adapt to external or internal pressures that threaten longterm survival Decline grow too much organizational inertia (forces resistant to change) risk aversion desire to maximize rewards overly bureaucratic culture changes in the environment

Organizational decline
Weitzel and Johnsons model five stages

blinded unable to recognize

internal & external problem inaction little action to correct problem faulty action wrong decision, conflict crisis radical changes! dissolution cannot recover, death!

Implications for manager

To prevent decline, continually analyze the organization to identify inertia Analyze the environment, niche, to identify changes in resources When facing difficulties to pinpoint problems, call on other managers, outside consultants for help You have concern for stakeholders satisfaction. So, be prepared to step aside if new leadership is required case analysis: The Body Shop reaches middle age (p. 364)

Managing conflict, power, and politics

Organization consists of different groups of stakeholders, each contributing to the org. in return for rewards To grow, change, and survive, an organization must manage cooperation and competition among stakeholders Each stakeholder group has its own goals and interests, which overlap somewhat with those of other groups Stakeholders goals and interests are not identical conflict arises goals, preferences, interests differ

conflict
Pondys model of conflict process of five sequential

stages latent - potential perceived - escalates felt respond emotionally manifest open aggression conflict aftermath resolved (combative or cooperative)

Sources of conflict
Interdependence
Differences in goals and priorities Bureaucratic factors Incompatible performance criteria Competition for resources

Pandangan mengenai konflik

Tradisional (1930-1940-an) negatif, merugikan, jelek, bikin kelompok kacau dihindari
Hubungan manusiawi (1940-1970-an) lumrah, alami, tidak bisa dihindari, malah bisa merupakan daya positif yang meningkatkan kinerja kelompok Interaksionis (1970- sekarang) tidak hanya bisa positif, tetapi justru diperlukan, bahkan mutlak perlu, agar kelompok bisa efektif

Conflict resolution
If conflict escalates, it may sour organizational culture

manage! Method? depending on the source of the problem

level of structure level of attitude & indiv. Good conflict aftermath! cooperative attitudes can be maintained over time

 Teknik resolusi konflik Problem solving face-to-face meeting Superordinate goals creating a shared goal Expansion of resources Avoidance Smoothing Compromise Authoritative command Altering human variable training Altering structural variable

power
All organizations control their participants, esp. formal ones Essence of organizational control power Power ability to get others to do what one wants them to do Authority has a narrower scope than power Webers def: probability that (certain specific) commands from a given source will be obeyed by a given group of persons Types of authority: charismatic (non rational, affective or emotional), traditional, legal

To be cont.
Sexual harassment isnt about sex but Power described as the last dirty word (cf. money) Power concerns dependency A has the capacity to influence the behavior of B; so B acts in accordance with As wishes Cf. leaders achieve goals; power is a means of facilitating the achievement Sources/bases of power (French & Raven, 1959): coercive, reward, legitimate, expert, referent

To be cont.
Mintzbergs typology of power: power stems from control over a

resource, a technical skill, or a body of knowledge, legal prerogatives, those who have access to power holders Etzioni concept of power and subordinates response to power compliance; three types of power: coercive, remunerative, normative Reactions to power from subordinates: commitment intense positive involvement alienation intense negative involvement calculation mild positive or mild negative involvement Dependency postulate: the greater Bs dependence on A, the greater the power A over B; dependence is inversely proportional to the alternative source of supply (cf. intelligence, monopoly, expertise etc) What creates dependency? importance scarcity nonsubstitutability

To be cont.
Power tactics how power bases are translated into actions reason friendliness coalition bargaining assertiveness (defending ) higher authority sanctions

Politics power in action

Usage of power tactics
when managers influence superiors most popular reason coalition friendliness bargaining assertiveness higher authority managerssubordinates reason assertiveness friendliness coalition bargaining higher authority sanctions

less popular

Sources of organizational power

Authority Control over resources Control over information Nonsubstitutability Centrality Control over uncertainty Controlling the premises of decision making/unobtrusive power

Authority (cf. Dessler, 1998)

the right to take action, to make decisions, and to direct the work of others Essential part of organizing Derives from several sources: persons position/rank, personal traits (intelligence, charisma), expertise (cf. bases of power) must come from the bottom up and be based on subordinatess acceptance of supervisors orders (!) Cf. workers empowerment and team-building!

Politics (cf. organization is a political arena!?)

Politics acquisition and use of power Integral part of decision making To benefit, an organization must establish a balance of power in which alternative views and solutions can be offered/ considered by all parties Power should flow to those who can be of most help to organization Prevent a political manager/group from pursuing their interest at the expense of organizational interest

Authority, power, influence

The words are often used interchangeably
Influence effect of Power cf. Webers Authority notion of legitimacy or ethical

sanctification; power does not have to be legitimate

Winning at office politics

Control vital information (cf. expert power)
Hook your career to a star Minimize power vacuums Open communication channels Cases: The power of the Subordinates

(Robbins, 1998); The Shake-up in the GMs hierarchy (Jones, 2004)