IO Psy unit VIII assessment 2 questions

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UNIT VIII STUDY GUIDE

Organizational Development

and Theory

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

1. Define and describe organizational development, and be familiar with the different methods for organizational development.

2. Define and describe management by objectives. 3. Evaluate the survey feedback approach to organizational development. 4. Understand bureaucracy theory and different elements involved. 5. Distinguish between Theory X and Theory Y. 6. Analyze open systems theory. 7. Describe the sociotechnical systems theory. 8. Compare and contrast the major organizational theories.

Unit Lesson Organizational Development and Theory In this unit, we will build on previous lessons to discuss specific approaches organizations use to develop as a whole. I/O psychologists and others in related fields recognize a variety of systems and theories for improving the effectiveness of organizations and for implementing change. We will discuss several approaches, including management by objectives, survey feedback, and team building. We will also discuss some of the leading theories that have influenced practice in this area, including bureaucracy theory, Theory X and Theory Y, open systems theory, and sociotechnical systems theory. Organizational Development Organizational development refers to, “a family of techniques designed to help organizations change for the better,” (Spector, 2012, p.353). I/O psychologists both study and apply these techniques, and there is a large body of research in this area. An issue with organizational development techniques is that each technique is very unique, and therefore it is difficult to gauge the effectiveness of these programs as a whole. Also, these approaches are often used in combination, making it difficult to pinpoint which intervention contributes most to improvements. Numerous studies do provide evidence to suggest that these interventions are effective, when applied in precise ways and with the support of management (Spector, 2012). The following examples are some of the most widely applied, and each is supported by empirical research suggesting that it is effective. Management by objectives Management by object is a well-established approach to organizational development that is based on a very simple concept: goal-setting. In previous units, we have discussed the notion of setting standards. For example, job analysis involves establishing standards of expectations for that job, while

Reading Assignment Chapter 14: Organizational Development and Theory

Suggested Reading Govindarajan, V., &

Gupta, A. K. (2001). Building an Effective Global Business Team. (cover story). MIT Sloan Management Review, 42(4), 63-71.

Learning Activities (Non-Graded) See information below.

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employee selection involves comparing a job candidate’s knowledge, skills, and abilities against a certain standard that is needed to perform the job. Management by objectives similarly involves setting goals at each level of the organization in order to have a standard by which to judge performance and improvements. Goal setting begins with the top management, and then subsequently each level of the organization creates goals reflecting those of the one above them. For example, a goal for top management may be to improve productivity by 15%, and managers within different departments may hold meetings with their employees to set goals to increase specific production activities relevant to their function in the organization. When all employees are committed to the objectives, then organizations can see high success rates using this approach (Spector, 2012). However, some argue that this approach to organizational development will soon be obsolete. One reason is that organizations must respond to a fast-changing environment, making it difficult to set goals that will be relevant for any significant amount of time. Another reason is because this approach typically focuses on individual employees and the extent to which they are helping to contribute to the success of organizational goals. However, in today’s workplace, work teams are becoming increasingly more common, making it difficult to use management by objective to assess performance. Third, employees can become so focused on meeting the objectives (goals) that they ignore important issues that arise when these are not related to the objectives. This can be detrimental to the organization’s success (Roth, 2009). Survey feedback This approach to organizational development involves gathering information from employees and using this information as a basis for setting goals to improve. With this technique a change agent helps to gather information using surveys. They administer surveys to gain insight into how employees perceive their job conditions, how they feel about their jobs, and what issues and problems they recognize in the workplace. Following this, the change agent analyzes the data and interprets the findings. They hold meetings with employees to discuss the results of the findings, and importantly, to identify strategies for resolving any issues that they identify through the survey. In general, research studies suggest that this is an effective technique (Spector, 2012). These surveys are often conducted by consultants outside of the organization. An example of an organization that uses I/O psychologists to conduct surveys to promote organizational development is Gallup (for an example, visit http://www.gallup.com/strategicconsulting/main.aspx). Team building This technique involves activities aimed at improving the cohesion and effectiveness of work teams. As we discussed in the previous unit, teams can provide many benefits to the organization, as they allow employees to pool their knowledge, skills, and abilities, while potentially benefitting from the social nature of work teams. While teams offer great potential, they can often lead to detriment when teams or members are ineffective. Team building initiatives help to address some of these issues, by targeting key areas, such as coordination and communication. Research suggests that team building can help to improve team functioning, and team building initiatives are also linked to higher employee job satisfaction (Spector, 2012). For example, recently, Klein et al. (2009) conducted a comprehensive meta- analysis analyzing the impact of team-building initiatives. They found that,

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overall, these initiatives have a moderate, positive impact on relevant outcomes, including performance. Those are a few of the major approaches to organizational development. As the environment continues to change, new interventions will likely emerge, as well as new focuses. For example, today’s work environment is often characterized as being stressful. Therefore, researchers are exploring organizational development interventions that have a key focus on reducing the effects of stress and managing this through the role of organizational leaders (Darling & Heller, 2011). In the section that follows, we will discuss several frameworks that guide our understanding of organizational effectiveness. Organizational theory Organizations are complex systems, and much research focuses on understanding the various elements involved, such as people, technology, and structure. This has resulted in a multitude of theories, some which explain the different aspects of organizations and some that give insight into how organizations should operate. Of these, we will discuss four, including bureaucracy theory, Theory X and Theory Y, open systems theory, and sociotechnical systems theory. Bureaucracy theory Max Weber established the bureaucracy theory in order to identify best practices for improving the organization. The theory focuses on ways in which the organization’s structure can improve its effectiveness. For example, this theory is concerned with ways in which the work is divided amongst employees. If there is a division of labor, in which certain employees perform only parts of the task (e.g., one person washes the vegetables, another cuts the vegetables, another seasons the vegetables, another cooks the vegetables), then each employee specializes in some areas. This means that employees require fewer skills than they would if they were responsible for completing the full task. Different structural arrangements and characteristics of the organization have implications for the resources needed and performance-related outcomes. Other examples of areas that are important features of an organization include the degree to which delegation of authority occurs, the span of control that leaders have, and the presence of support staff in an organization. The bureaucracy theory is useful for describing the different characteristics of an organization, and for anticipating the implications of different changes to the organization’s structure to improve effectiveness and efficiency (Spector, 2012). Theory X and Theory Y This approach classifies managers by how they perceive the role of managers and employees. Managers can be classified as having a Theory X orientation when they take a conventional view, seeing managers as responsible for organizing and directing the activities of employees. They see employees as essentially unmotivated and lazy by nature, requiring a manager who can coerce them into performing their job effectively. To the contrary, a manager who has a Theory Y orientation is more likely to view employees positively, as individuals who are willing to perform well, but who need to be motivated and assisted by the manager. According to this perspective, managers should work with employees to ensure that they are able to accomplish organizational goals, as well as their own career goals, in alignment with the needs of the organization. Theory Y managers recognize that they have a responsibility to create the conditions needed for employees to be successful (Spector, 2012).

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Open systems theory This theory suggests that organizations are like open systems, and it attempts to explain how organizations use and transform resources in order to deliver goods and services, as well as how they avoid essentially “dying.” This theory provides a framework of 10 characteristics by which to analyze organizations. These include analyzing how the organization imports energy, transforms energy, outputs products, has cycles of events, escapes entropy, inputs information, achieves homeostasis, specializes, coordinates and integrates, and achieves success through a variety of means (equifinality). This theory accounts for the fact that organizations tend to follow the same pattern of activities and states that allow it to survive. For example, as they grow, organizations tend to create more specialization of jobs and divisions within the organization to keep up with the workload. Another example is that all organizations tend to have activities that facilitate achieving a balanced state (homeostasis), such as balancing the budget. This theory provides tools for understanding the organization (Spector, 2012). However, it can also help to explain why some organizations succeed and others fail. For example, researchers argue that organizations must interact with their environment in order to succeed, and that those who isolate themselves tend to create a closed system, which often fails. Organizations can interact with elements of their legal, social, cultural, political, and technological environment in strategic ways. They can build alliances, and by partnering with others in their environment, they can also influence their environment, making them more likely to succeed (Starnes, 2000). Summary In summary, organizations and I/O psychologists apply a variety of techniques and theories to understand and to address organizational issues, as well as to improve organizational performance. Research suggests that, in general, these methods for intervening are effective, when applied appropriately. Organizational theories provide useful frameworks that help to characterize organization, and some even provide guidance on how to improve organizational functioning through changing the structure and other characteristics of the organization. The theories and methods discussed in this unit are founded in research, and unlike the approaches discussed in previous units, these seek to address the organization as a whole.

References Darling, J. R., & Heller, V. L. (2011). The key for effective stress management:

Importance of responsive leadership in organizational development. Organization Development Journal, 29(1), 9-26.

Klein, C., DiazGranados, D., Salas, E., Huy, L., Burke, C., Lyons, R., &

Goodwin, G. F. (2009). Does team building work? Small Group Research, 40(2), 181-222.

Roth, W. F. (2009). Is management by objectives obsolete?. Global Business &

Organizational Excellence, 28(4), 36-43. Spector, P. E. (2012). Industrial and organizational behavior: Research and

practice (6th ed.). Hoboken, NJ: John Wiley & Sons, Inc.

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Starnes, B. J. (2000). Achieving competitive advantage through the application of open systems theory and the development of strategic alliances: A guide for managers of nonprofit organizations. Journal Of Nonprofit & Public Sector Marketing, 8(2), 15.

Learning Activities (Non-Graded) Explore organizational development from an international perspective. Browse professional societies in different parts of the world to get a sense of the commonalties and differences in approaches used across cultures: http://iodanet.org/ Non-Graded Learning Activities are provided to aid students in their course of study. You do not have to submit them. If you have questions contact your instructor for further guidance and information.