ORGANIZATIONAL DESIGN, THEORY AND CHANGE

MBA 6001, Organizational Research and Theory 1

Course Learning Outcomes for Unit II Upon completion of this unit, students should be able to:

4. Examine the relationship between reward systems and organizational goals and productivity. 4.1 Identify the constructs of reward systems, organizational goals, and

productivity. 4.2 Identify the relationship among the constructs of reward systems,

organizational goals, and productivity. 4.3 Evaluate the ethical implications of decision making that occur within

the organization.

Unit Lesson Jones (2013) outlines organizational stakeholders, managers, and ethics as interconnected constructs that are of critical importance to the organizational outcomes. Stakeholders provide inducements (or awards) and contributions (skills, knowledge, and expertise) to organizations that allow them to survive and also dictate what is required during all task performances. Managers should be aware of stakeholder interests and concerns in every aspect of the organizational structure. Without stakeholder buy-in and total support, the organizational mission can fluctuate or even fail. A quick look at the fate of corrupt leadership, such as with the failure at Enron, demonstrates how unethical behavior can be perpetrated by top managers who work to protect themselves or are motivated by greed. Jones (2013) points out how mutual fund companies, a peanut company, and a major oil company have incurred legal actions due to unethical product processes or organizational investigations and bad public relations due to safety processes. Knowing the internal and external stakeholders’ values and contributions as we evaluate and improve organizational processes is vital to organizational survival. Internal stakeholders include shareholders (the owners), managers (employees who ensure goals are met), and the workforce (all employees whose skills and motivation often dictate outcomes). Consider the best company for which you ever worked. What made the employees strive to do their work? Think about the awards or treatment of employees. What were the rewards and incentives? What drove the motivation of employees? Think about the morale and the monetary gains over time. Were the employees satisfied with the gains? External stakeholders include customers, suppliers, the government, trade unions, and local communities. Consider a preschool in a suburban town. Clients are parents. Suppliers might be local grocery stores. The government regulates health and safety.

Reading Assignment Chapter 2: Stakeholders, Managers, and Ethics Internet Reading: See information below.

UNIT II STUDY GUIDE

Stakeholders and Ethics

MBA 6001, Organizational Research and Theory 2

Trade unions protect the teachers’ rights. The local community surrounds the preschool as a small culture of change. How does the preschool adapt, evolve, and improve in such a small eco-culture? Is it easier for a global company, such as E*TRADE or Raytheon, to evolve and improve in a more global eco-culture? Organizational effectiveness is measured and controlled by the goals and interests of different groups of stakeholders. Consider project management professionals. There are metrics to weigh out and predict the outcomes of particular stakeholder interests and project goals to see if they align in a way that benefits the organization. Rudimentary to all aspects of project management professional training is full consideration of stakeholder interests. There are competing goals among stakeholders and managers. Competing goals might lead to a manager choosing goals that vary from maximizing stakeholder wealth. Taking risks by investing in new areas in order to maximize wealth might be avoided by a cautious manager who idealizes the status quo. Personal values and ethics influence a manager’s views and decisions along the way. The development of a professional might correlate with a person’s ethical development; conversely, a person might develop a more narcissistic point of view and become greedier over time. Human motivation has long been a point of discussion from Socrates to Abraham Maslow. Personality has always been part of the discussion. Allocating rewards within an organization is a choice that needs to be made carefully. Stakeholders might be awarded a dividend of profits quarterly; they may or may not be guaranteed a check based on the performance of the organization. Employees might be promised bonuses based on year end profits, or the sales department might be granted a higher commission based on a successful quarter. Allocation of rewards can be an issue in a variety of ways. A large corporation that makes a public profit each year and does not fairly allocate rewards to employees, particularly after promising such rewards, might experience disgruntled employees overtime. Consider a situation in a school or in a hospital where the teacher or doctor becomes part owner. Will there be shortcuts in quality in order to cash in a greater profit? The relationship between reward systems and organizational goals and productivity are complex, but the causal connections are certain. If hard work and dedication are met with unethical or inappropriate treatment in any company regardless of size, productivity will decrease. Conversely, when hard work and dedication are met with rewards, productivity will be maintained or will increase. Reward systems need not be monetary; often employers’ written or verbal words of praise or validation can be motivational to employees. Corporate trophies and certificates are a multi-million dollar industry because for a fraction of the cost of an employee bonus, a trophy has been known to motivate and recognize an employee with equal results. Constructs of reward systems have a ripple effect. When correspondent with organizational goals, reward systems can have a direct impact on the rate and frequency of productivity. If each team in the sales department of a financial planning company is given a challenge to sell the most of a particular financial software product in the upcoming quarter, each team is motivated in a parallel direction at the same time to sell the same product. Such a strategy would align a corporate goal with employee behavior. In this case, the reward system is aligned with the organization’s goal and directly influences the productivity of the sales department. In the Chapter 2 reading assignment and the essay assignment in this unit, you will further identify the relationship among the constructs and also among the reward systems, goals, and productivity.

MBA 6001, Organizational Research and Theory 3

Reference

Jones, G. R. (2013). Organizational theory, design, and change (7th ed.). Upper Saddle River, NJ: Prentice Hall.

Internet Reading In order to access the resource below, you must first log into the myCSU Student Portal and access the Academic OneFile database within the CSU Online Library. If you have any questions, the librarians’ contact information can be found on the right side of the library page. Bukovinsky, D. (2013). Are pay-for-performance systems missing the mark?

Overcoming design, implementation, and operational challenges. The CPA Journal, 83(10), 60.