UNIT 4 Individual Project: Foundation of Organizational Design MGMT673

Foundation of Organization Design

(MGMT673)

Reading Material

What is an OD Practice?

There are many types of organization development (OD) practices. Some OD professionals practice solo, often from home or in a small office. Others work in small boutique firms specializing in one area of OD. Some work for large management consulting firms and are part of multidisciplinary consulting teams. Some work as internal consultants in large corporations or government agencies. Over a long career, an OD practitioner may work in all of these roles.

One well-known OD practitioner started in a general international consulting firm and then moved to a private practice, only to find it extremely lonely. He then went to work for a Fortune 100 corporation and after several years became very weary with the corporate politics. In the next stage of his career, he took an academic position in a university and taught consultants and managers about organization development. After a lengthy stint as an academic, he joined a small boutique firm. Finally, he retired from the business world and taught online classes as an adjunct professor.

Organization Development and the Organizational Setting

Unlike many psychologists and some management trainers, an OD practitioner practices in an organizational setting. Without an organization as a client, the OD practitioner is simply theorizing like a sociologist or anthropologist might do. Even the solo practitioner is working within various organizations. The practitioner may be doing team building, management coaching, succession planning, or organizational redesign, but the client is an organization and the work gets done within an organization. The OD practitioner must always have the organization or community as his or her major focus.

Ethical Considerations

There will be times when the OD practitioner is confronted with ethical issues. Consider the following example:

A practitioner has been hired by an organization to coach an individual manager. During the session it becomes evident that the employee does not even want to be a manager and wants to leave the organization. What should the practitioner do? The practitioner’s client is the organization.

When this happens, the practitioner could consult the OD code of ethics, other OD practitioners, and his or her own conscience. It will happen, and sometimes it means walking away from a client or a job.

From an Individual to an Entire Community

Organization development practitioners work the gamut from one-on-one coaching to working with communities, nations, or multinational groups such as the United Nations. A comprehensive skill set and political savvy are necessary for OD practitioners who work in a variety of roles. OD practitioners are found in virtually any kind of organization. The following are just a few examples of where an OD practitioner might work:

· Government organizations

· US State Department

· U.S. Post Office

· U.S. Military

· U.S. Forest Service

· Small local churches

· Charitable organizations

· Large metropolitan churches

· Large multinational corporations

· Small family businesses

Much of the selection of clients has to do with the personal background and interest of the particular practitioner or firm.

Working with an Intact System

People do not often think of an individual as an intact system, but that is generally because they do not observe the individual from an open-systems perspective. In the open-systems perspective, an individual is very much a part of a much larger system and exists in an environment. Just to survive, individuals must take in resources, knowledge, language, culture, and so forth. They must also eventually produce something such as work or social interaction—in other words, they must have outputs to the larger environment. By understanding the individual from an open-systems perspective, one is likely to have a better understanding of the person’s world and be more likely to be of help as a coach. Whether analyzing an individual or an organization, understanding it as an intact open system will lead to many more insights.

Applying Social Sciences to OD

Using Social Theory and Knowledge

Though organization development (OD) and its subarea, organizational redesign, are more of an art form or practice than a science, it is essential that the practitioner understand the science on which his or her practice and suggestions are built. Without knowledge from the social sciences, the practitioner’s advice and work may become highly politicized and instead of leading to positive results may only lead to frustration and failure. The famous pioneer of organization development, Kurt Lewin, is often quoted as saying, “There is nothing as useful as a good theory.” That has been one of the most helpful observations made to OD practitioners.  No OD practitioner will use all of the social science theories. Generally, the practitioner tends to specialize in one area and then with selected reading finds the theorist and scientist that are the most helpful in that area of practice. When specializing in organizational redesign, more emphasis will be on sociology and social psychology with some understanding of anthropology. Someone specializing in leadership will probably delve into psychology, and a person focusing on sales might want to become grounded in behavioral modification and the power of rewards for motivating behavior. Someone focusing on teams will want to study social psychology and, even more specifically, group dynamics.

Applying Social Science

Many OD practitioners who have a strong grounding in the social sciences refer to themselves as applied social scientists rather than OD practitioners. They want to communicate that they are not just operating from their experience, but are also applying their understanding of the social sciences to their practice. Organization development is a practice informed by the social sciences, just as medicine is a practice informed and supported by biology and chemistry.

Continual Learning about the Social Sciences

Unfortunately, OD practitioners are not required to be involved in continual learning like doctors, social workers, and certified public accountants (CPAs). Good practitioners, however, never stop studying and taking courses. It is important for OD practitioners to take the time to learn about the social sciences and to use them to inform their practice. It is one of the best ways to continually develop knowledge and expertise. Learning from experience is not enough. Another method of learning is to work with a seasoned coach who is knowledgeable in a particular area of specialization.

Communication Theory

What about communication theory? Though communication is not technically a social science and is generally considered a practice similar to OD, it is still a vital area of study for the OD practitioner. In reality, many OD practitioners are expected to be experts in communication and to be aware of that body of knowledge. Much of what is studied in communication programs is similar to what is studied in OD, but with a different twist and generally a different perspective.

Organization Development and Redesign

How Organization Development Differs From Other Approaches to Organizational Redesign 

Not all organizational design is based on organizational development (OD). Many organizations just evolve over time. Much redesign is done because the organization has grown in a haphazard manner. Sometimes a redesign is also done without much thinking about the organization’s strategy; the tasks that need to be accomplished; or the employees, customers, and other stakeholders. Organization development redesign needs to begin with an understanding of the purpose of the design. Not having a clear understanding of the design for a major redesign can lead to catastrophe.  

The redesign process is critical to the organization’s life. Organizational redesign is a macrointervention with big risks. If done poorly, it can cost millions of dollars because it can lead to loss of customers, employee alienation or rebellion, or the inability to implement because the technology will not allow the new design to work. The reason organizations initiate organization redesign is to improve performance and to adapt to technology or other environmental and business demands. A sloppy redesign effort can cost more than a career or two—it can destroy the very organization that it was intending to help. Organizational redesign requires a great deal of study and planning. 

People and Systems 

The importance of having a deep understanding of human behavior and of open-systems theory cannot be overemphasized. Far too often, organizations are designed without regard for the people who are going to work in them and without an understanding of even the most basic social science. So much is now known about human behavior; the best of this knowledge must be brought into the planning. It is the OD practitioner’s responsibility to help managers understand open-systems theory and how it applies to the organization. 

Sociotechnical Redesign 

Sociotechnical redesign is often used in industrial settings when new, expensive technology is being introduced into an organization. It puts a major focus on the technology and people. This can be done well or done poorly. An example is the comparison of two major car manufacturers that introduced robotics into their processes. One company involved the workers who were going to be running the new robotics. These workers were involved in the work and design processes. In this company, the change to robotics was not severely resisted and productivity increased almost immediately. 

Another manufacturer spent millions of dollars on technology and engineering expertise without the same involvement of the workers. In this company the reorganization was resisted both passively and actively. Initially, it cost millions of dollars with almost no improvement in productivity. Eventually, this company was able to cut costs and improve productivity.  

A third company learned from the mistakes made at the second company. This company moved more slowly with its conversion to robotics and utilized consultants who understood the importance of the human factor.  

Good OD practitioners never forget the importance of people, technology, and systems when initiating such large-scale interventions as a redesign. 

Summary 

The following are points to review and consider when planning the organization redesign process: 

· Role of the OD practitioner

· Skills and ability necessary for being an effective OD practitioner

· Importance of planned change

· Necessity of organizational assessment

· Understanding of the open-systems perspective

· Understanding of the basic organizational structures

· Need for a sound basis of social sciences

Skills Needed to Implement Change

Interventions are like interruptions in the current way of doing something and learning a new way. The intended outcome is the successful implementation of change strategy resulting in a new and improved way of doing business. But how exactly does intervention occur, at what junctures, and by whom? This unit examines specific intervention skills at different levels within organizations: process, organizational development, and interpersonal interventions.

Process Interventions Skills

Process intervention skills are used to help work groups become more effective and become aware of how the group operates. Tools are taught to the group that help the members solve the group’s own problems. Standard process interventions focus on five areas thought to be the most significant factors in normative group functioning: communication; member roles and functions in groups; group problem solving and decision making; group norms and growth; and leadership and authority. Process interventions focus on how the members of the group use and perform these skills, but never on the task charged to the group. Process interventions are varied, but should focus on only one behavior at a time and provide maximum impact with minimum interruption.

Organizational Development Intervention Strategies and Skills

Organizational change attempts to increase productivity and performance. Managing organizational change is an important and complex action. In attempting to increase organizational and individual effectiveness, managers must understand the nature of the changes needed and the possible effects of various alternative change strategies. Common approaches to organizational change are structural, technological, and behavioral. Let's look at each of these domains separately.

· Structural Strategies: Structural strategies deal with lines of authority and reporting order. This often requires flattening the organization and removing certain layers of management. Structural strategies include mergers, bankruptcies, and dissolutions, all of which require a change in hierarchy.

· Technological Strategies: Structural strategies implement new technologies, systems, and/or machinery. These strategies are often required to bring an organization up to the state of the art in machinery, methods, automation, and job design.

· Behavioral Strategies: Behavioral strategies are those that emphasize human capital. In the past, companies would change the organization or merge to improve organizational performance. Little thought was given to the people aspect of this change. Success of any change is dependent on the people who have to implement the change. Recently, more attention has been directed on ways to increase employee morale, motivation, and organizational commitment as a means for simultaneously improving organizational performance on key outcomes variables.

Employee Empowerment and Interpersonal Intervention Skills

In a growing number of today's organizations, power is shifting out of the hands of managers and into the hands of lower level employees. The process of decentralization is also a process of employee empowerment. In other words, employees are given the power to make decisions about their work. Employee empowerment has become in many organizations a basic cornerstone of organization change and development programs, but organizations that embark upon programs to empower employees need to do so recognizing that empowerment is not a panacea for all the ills of the organization and is not often without the need for interpersonal intervention. Interpersonal interventions typically range from laboratory learning, use of the Johari Window, transaction analysis, life planning, and stress reduction programs. The organization development consultant and client need to examine multiple factors in determining an appropriate intervention. They must decide not only the depth of a desirable intervention but also the relative advantages and disadvantages of alternative strategies.

Continuous Improvement Process

Organizational development interventions have evolved to help organizations meet the uncertainties of the 21st century. These interventions often include structural changes and transformation as a means of increasing efficiency, improving the work life of employees, and meeting the challenges of an increasingly global market. Some of the more dramatic changes have been in organizations that implement continuous improvement processes, use self-managed work teams, create learning organizations, and transform themselves in meaningful ways.

Continuous Improvement Processes

Today’s managers are being challenged to provide leadership in new and changing conditions. One emergent approach to meeting these changing forces is total quality management or TQM. Organizations that practice TQM usually share several common principles such as: organizationally wide implementation, the visible support of the CEO and other top managers, the embedding of TQM as a value within the corporate culture, the encouragement of partnership with customers, a recognition that everyone within the organization has a customer, a focus on reducing cycle time and doing it right the first time, and an awareness that no single formula can or will work for everyone.

Self-Managed Work Teams

Another structural intervention commonly implemented is the introduction of self-managed work teams. A self-managed work team is an autonomous group whose members decide how to handle their task. Work teams are assigned a wide range of tasks from setting work schedules, budgeting, job assignments, performance goals, hiring and selecting team members, assessing performance, purchasing equipment to controlling quality. It is important that the team is properly prepared and trained to take on these responsibilities. Most companies that use self-managed work teams do so at specific sites and not throughout the company. Even so, for most organizations, self-managed work teams represent a substantial change in the way the company is both configured and managed, most often signaling the shift from a centralized organization to a flattened structure.

The Learning Organization

Managers looking for new methods for successfully adapting to a world of change have also examined the ways in which the organization itself can remain open, reflexive, and adaptive. In short, managers are seeking ways to allow the organization itself to evolve and learn. A learning organization may be defined as an organization that has developed a continuing capacity to adapt and change. In other words, learning in organizations means the continuous testing of experience and the transformation of that experience into knowledge. Some of the characteristics that indicate a learning organization are: (1) members of the organization are stretching and growing, (2) teams are used and expected to be creative and, (3) employees are encouraged to take risk.

Strategy Interventions

Finally, organizational excellence in a rapidly changing world requires an innovative and adaptive corporate culture. In fact, strategic change has become increasingly important in recent years, and often influences the very survival of an organization in a volatile environment. The corporate culture can be a force in reinforcing or resisting strategic changes. Therefore, when the culture is resistant to innovations, organizational development techniques and strategies may be used to enhance successful strategic changes.

In short, leadership in today’s fast-changing world involves developing an innovative corporate culture: a culture that recognizes employees’ needs, the firm’s history, the marketplace, and the company’s products and services.

Empowerment

Several years ago, industries in the United States found they were lagging far behind their Japanese counterparts. Because of this, they wanted to learn how their Japanese competitors were able to do what they were unable to achieve. The CEOs of some of the largest U.S. firms, most notably the auto companies, visited Japan to learn about their industrial success.

The U.S. managers came back with many ideas from an operational and technical perspective. More importantly, they found differences in the basic company culture in Japan. The corporate culture phenomenon they observed was called a quality circle, which has become more broadly referred to as employee empowerment.

In Japan, quality circles were a major force in continuous improvement. Remarkable levels of productivity and teamwork in Japanese factories came from numerous teams of employees, both departmentally and cross-functionally, working together on problem-solving activities. This was true on the factory floor as well as in the office environment in departments like engineering and marketing. For years, Japanese companies had been tapping into the brainpower of their employees, not just their physical labors.

Empowerment means to give more responsibilities to employees to manage their own work areas, set production schedules, make and implement suggestions for improvement, and make necessary adjustments to routine plans without involving their supervisor.

The traditional Theory X management style views employees as only physical laborers, leaving all decision making to supervisors and managers. Compared to Theory X, empowerment has numerous benefits that include the following:

· Employees take more ownership and are usually more motivated to perform when they have more control over their job.

· Employees usually know their job best and can make individual recommendations for improvement. They can then implement those improvements they feel will work without having to go through bureaucracy, paperwork, and management approvals.

· Employees assume greater responsibility and effectively relieve supervisors and managers from making small operational decisions, which allows supervisors to do higher level tasks. 

Even though empowerment offers these types of advantages, it has still not been adopted by many U.S. industries.

One reason empowerment has not been adopted in the United States is that the implementation requires senior management to recognize that a change is needed in the overall company culture to be supportive of this kind of activity. For example, a Theory X management style does not support employee empowerment because it assumes that employees cannot and do not want to contribute ideas toward company success. It assumes that only management personnel have the ability to make the kinds of decisions that empowerment will let employees make.

On the other hand, a Theory Y management style is precisely the kind of culture that fits into the empowerment concept. It assumes employees want to and can exercise good judgment to make decisions about their own job and work area. It assumes that people will be self-motivated toward company success.

Another reason more companies have not adopted employee empowerment to a greater degree is the impact it has on supervisors and managers. The power of managers and supervisors is dramatically reduced in this new culture of employee involvement in decision making.

In many cases, when senior management wants to adopt this new kind of company culture, they find it necessary to replace supervisors and managers who subscribe to the Theory X style of management. Although attempts can be made to train them in these new skills, it is usually difficult for them to make the transition to performance criteria. Instead of being graded on how much they get their department to produce, they may now be measured on how much employee involvement they are able to achieve, how many employee ideas get implemented, and how many employees are now able to do higher level tasks.

Leaders and Motivational Leadership

Leadership Theories and Best Practices

Leadership theories generally describe relationships between leaders and tasks. For example, some theories suggest that leadership is a charismatic quality or set of traits that certain people possess. Others suggest that effective leadership depends on the relationship to the issues or culture of the organization. Many of these relationships will be examined in detail throughout this unit.

Autocratic Leaders

The autocratic leader focuses on observable behaviors. There are clearly defined rules that everyone is expected to follow. The message is clear: Do as I say. In this environment, people mainly follow directives; creative thinking is not encouraged. While this leadership style has been criticized in recent years, it often produces the desired results in crisis situations when critical decisions have to be made in a short period of time.

Motivational (Charismatic) Leadership

Charismatic leaders seem to know just the right words to say. These leaders inspire followers to take action and keep followers motivated by their charismatic personalities. They help people realize their full potential by focusing on emulating their leader. This style works best in small, closely knit organizations that share values that are clearly defined and commonly agreed upon.

Transactional Leaders

Transactional leaders use a clearly defined structure and division of roles between leaders and those they lead (Changing Minds, 2009). This may be a formal, written agreement, such as an employment contract, but more often, it is an informal set of expectations or company policy. Whenever there is a disagreement, the two parties use the contract as a basis for resolution. The leader may also use rewards or punishment as extrinsic motivators. Subordinates work at the pleasure of the leadership and are expected to do as told. While this may stifle the creative person, others find it comforting to follow a clear set of rules.

Participative Leaders

Leaders who take a team approach and encourage collaboration may develop a stronger social bond within the organization. Leaders may create an inviting atmosphere that, in many cases, extends beyond the walls of the organization. Meetings may be held in a variety of locations and settings; however, there is a broad range to what may be called participation—anything from describing a plan, asking for assent to describing an issue, and making the group fully responsible for creating and implementing the plan.

Transformational Leaders

While charismatic leaders typically make themselves the focus, transformational leaders are focused on the change itself. The atmosphere is not "who am I" but "what have I done." As change agents, they intend to bridge an identified performance gap or to find an opportunity to make a good organization excellent. Transformational leadership requires salesmanship, being the first to communicate the vision, and then being the one to motivate others to follow. Along the way, there is considerable cheerleading to overcome the natural flow of energy as the vision is implemented. Bass and Steidlmeier (1998) discuss in their essay some of the implications and dangers of organizational transformation. "When the focus is on change, it creates powerful and lasting results; when the focus is on the charismatic person, it may create a cult-like following and loss of personal freedom and identity" (Bass & Steidlmeier, 1998).

References

Bass, B. M., & Steidlmeier, P. (1998). Ethics, character, and authentic transformational leadership. Retrieved from the Center for Leadership Studies at Binghamton University Web site: http://cls.binghamton.edu/BassSteid.html

Changing Minds. (2009). Leadership theories. Retrieved from http://changingminds.org/disciplines/leadership/theories/leadership_theories.htm