Chapter 3: Organizational Context: Design and Culture Flashcards
The modern approach to organization theory and design consists of:
very flexible networks, and recognizes the interaction of information technology and people.
Historical Roots: Chester Barnard: The Functions of the Executive: definition of formal organization
- as a system of consciously coordinated activities of two or more persons
- People, not boxes on an organization chart, make up a formal organization
- especially dissatisfied with the classical bureaucratic view that authority should come from the top down
- He maintained that authority really should come from the bottom up, rather than the top-down bureaucratic approach
- It was Barnard’s contention that the existence of a cooperative system is contingent on the human participants’ ability to communicate and their willingness to serve and strive toward a common purpose
Modern Theoretical Foundation
- The first major development in organization theory was to view the organization as a system made up of interacting parts
- The next development in organization theory is the contingency approach.
The Contingency Approach
- there is no single best way to organize
- The organizational design must be fitted to the existing environmental conditions
- organizations change through internal transformation and adaptation
Natural selection—or Ecological approach
- challenges the contingency approach
- it is more a process of the “survival of the fittest”
- there is a process of organizational selection and replacement
Information processing and organizational learning
- recent approaches to organization theory
- based largely on systems theory and emphasize the importance of generative over adaptive learning in fast-changing external environments
Learning Organization
-represents contemporary organization theory and is
compatible with and is relevant to the new paradigm environment facing today’s organizations
- characterized by human-oriented cultural values:
1) everyone can be a source of useful ideas
2) promoting empowerment
3) learning flows up and down
4) new ideas are important and should be encouraged and rewarded
5) mistakes should be viewed as learning opportunities
Single-loop learning
- improving the organization’s capacity to achieve known objectives
- routine and behavioral learning
- is learning without significant change in its basic assumptions
Double-loop learning
- reevaluates the nature of the organization’s objectives and the values and beliefs surrounding them
- changing the organization’s culture
- the organization’s learning how to learn
Generative learning involves
- creativity and innovation
- going beyond just adapting to change to being ahead of and anticipating change
Creative Tension
- serves as a catalyst or motivational need to learn
- gap between vision and reality
- Questioning/inquiry
- Challenging the status quo
- critical reflection
Systems Thinking
- Shared vision
- Holistic thinking
- Openness
Culture facilitating learning
- Suggestions
- Teamwork
- Empowerment
- Empathy
Senge’s Summary of Traditional Versus Learning Organizations
1) Determination of overall direction
- Traditional: Vision is provided by top management
- Learning: There is a shared vision that can emerge from many places, but top management is responsible for ensuring that this vision exists and is nurtured
Senge’s Summary of Traditional Versus Learning Organizations
2) Formulation and implementation of ideas
- Traditional: Top management decides what is to be done, and the rest of the organization acts on these ideas.
- Learning: Formulation and implementation of ideas take place at all levels of the organization.
Senge’s Summary of Traditional Versus Learning Organizations
3) Nature of organizational thinking
- Traditional: Each person is responsible for his or her own job responsibilities, and the focus is on developing individual competence.
- Learning: Personnel understand their own jobs as well as the way in which their own work interrelates with and influences that of other personnel.
Senge’s Summary of Traditional Versus Learning Organizations
4) Conflict resolution
- Traditional: Conflicts are resolved through the use of power and hierarchical influence.
- Conflicts are resolved through the use of collaborative learning and the integration of diverse viewpoints of personnel throughout the organization
Senge’s Summary of Traditional Versus Learning Organizations
5) Leadership and motivation
- Traditional: The role of the leader is to establish the organization’s vision, provide rewards and punishments as appropriate, and maintain overall control of employee activities
- Learning: The role of the leader is to build a shared vision, empower the personnel, inspire commitment, and encourage effective decision making throughout the enterprise through the use of empowerment and charismatic leadership.
Horizontal Organization Guiding Principles
- Organization revolves around the process, not the task.
- The hierarchy is flattened
- Self-managed teams
- Customers drive performance
- Team performance is rewarded
- Supplier and customer contact is maximized
- All employees need to be fully informed and trained.
Hollow Organization
lies heavily on outsourcing, enabling it to maintain low staffing levels while capitalizing on the competences of partner organizations
Modular Organization
when just parts of the product or service are outsourced
Greenfield redesign
- break completely from the classical structure and
establishing a totally different design
Rediscovery redesign
- return to a previously successful design by eliminating unproductive structural additions and modifications
Network design
- the firm concentrates on where it can add the greatest value in the supply chain, and it outsources to upstream and/or downstream partners who can do a better job
- Another approach require internal units of the firm to interact at market prices—buy and sell to each other at prices equal to those that can be obtained by outsourcing partners.
Virtual Organization
- represents the new environment and the partnering, alliances, and outsourcing arrangements found in an increasing number of global companies. Key attributes:
1) Technology
2) Opportunism
3) No borders
4) Trust
5) Excellence
Edgar Schein’s definition of Organizational Culture
- a pattern of basic assumptions invented, discovered, or developed by a given group as it learns to cope with its problems of external adaptation and internal integration
- that has worked well enough to be considered valuable and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems
Organizational culture characteristics
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- Observed behavioral regularities (common language, terminology)
- Norms (guidelines on work ethic)
- Dominant values (major values that the organization advocates and expects the participants to share)
- Philosophy (policies on how customers & employees are treated)
- Rules (related to getting along in the organization)
- Organizational climate (overall “feeling”, the way people interact, how people conduct themselves with customers)
subculture
- a set of values shared by a minority, usually a small minority, of the organization’s members
- typically are a result of problems or experiences that are shared by members of a department or unit
How Organizational Cultures Start
- A single person (founder) has an idea for a new enterprise.
- The founder brings in one or more other key people and creates a core group that shares a common vision with the founder. That is, all in this core group believe that the idea is a good one, is workable, is worth running some risks for, and is worth the investment of time, money, and energy that will be required.
- The founding core group begins to act in concert to create an organization by raising funds, obtaining patents, incorporating, locating space, building, and so on.
- At this point, others are brought into the organization, and a common history begins to be built
Practices to maintain a culture
- careful selection of entry-level candidates
- placement on the job (training/hazing)
- job mastery (reinforced field experience)
- measuring and rewarding performance
- Adherence to important values
- Reinforcing the stories and folklore
- Recognition and promotion
Culture clash in M&A: Three areas
- Structure: the size, age, and history of the two firm
- Politics - power and managerial decision making
- Emotions - The personal feelings, the “cultural contract” that individuals have bought into to guide their day-to-day thoughts, habits, attitudes, commitment, and patterns of daily behavior.
Guidelines for Cultural Change
- Assess the current culture.
- Set realistic goals that impact the bottom line.
- Recruit outside personnel with industry experience, so that they are able to interact
well with the organizational personnel. - Make changes from the top down, so that a consistent message is delivered from all management team members.
- Include employees in the culture change process, especially when making changes in rules and processes.
- Take out all trappings that remind the personnel of the previous culture.
- Expect to have some problems and find people who would rather move than change with the culture and, if possible, take these losses early.
- Move quickly and decisively to build momentum and to defuse resistance to the new culture.
- Stay the course by being persistent
The Socialization Process
- consists of meticulous attention to measuring operational results and to rewarding individual performance.
- These systems are comprehensive and consistent, and they focus on those aspects of the business that are most crucial to competitive success and to corporate values
