Organizational

Dynamics

Summary
 Reasons of Organizational Failure
Failure to respond to external
elements
Inappropriate Strategy
Inappropriate Structure
Slow decision making
Negative use of power and politics
ethical lapses
outmoded corporate culture
Inability to manage internal
conflicts
Inability to change and innovate
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 OD vs IGD
Organizational
Dynamics Individual and Group Dynamics

Micro Behavior in
Macro Behavior organization
of organization
Individual and small
groups
Organizations
Employee productivity,
ability to learn, absenteeism, turnover,
adapt and job satisfaction
achieve its goals
3
What is Organizational Theory?

The study of how

organizations function and
how they affect and are
affected by the
environment in which they
operate
4
What is an Organization?
Social entities
Goal-directed
Designed as deliberately
structured and coordinated activity
systems
Linked to the external environment

5
Interacting Structural
Dimensions of Design and
Contingency Factors
 The Paradoxical
Twins: Acme and
Omega Electronics
Organic and Mechanistic Designs

8
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Mintzberg distinguished five components of an
organization:
The strategic apex:
The Middle Line:
ensuring that the
Form a chain joining
organization serve its
the strategic apex to
mission in an effective
the operating core by
way, and also that it
the use of delegated
serve the needs of
formal authority
those people who
controls.
The
The supporting
technostructure:
staff: Composed of
The analysts who
specialized units that
serve the organization
exist to provide
by affecting the work
support to the
of others. They may
organization outside
design it, plan it,
the operating work
change it, or train the
flow
people who do it, but
they do not do it
themselves.
The operational core: Those who perform the basic
work related directly to the production of products and 9
Historical Perspectives
Efficiency is Everything
Scientific Management: Pioneered by Frederick Winslow
Taylor
How to Get Organized
Administrative Principles
Contributed to Bureaucratic Organizations
What about People?
Hawthorne Studies
Can Bureaucracies Be Flexible?
Flexible and lean; focused on service, quality, and
engaged employees (1908s)
It All Depends: Key Contingencies
Contingency: there is no one best way
Structural Designs for
organizations
Organization Structure
Formal Reporting Relationships
Number of levels
Span of Control
Grouping of Individuals
Creation of Departments
Design of Systems
Communication, Coordination and
integration of efforts
Organizational Chart

Can be considered to be a representation of

an organizations internal structure
A diagram representing the connections
between the various departments within an
organization:

14
Functional Organization

15
Functional vs. Divisional
Structure
 Insert Figure 15.4 here

Note: only include part A

17
 Insert Figure 15.4 here

Note: only include part B

18
 Insert Figure 15.4 here

Note: only include part C

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Sample Matrix Organization
 Functional Divisional Matrix

Resource Excellent Poor Moderate

efficiency
Time Poor Good Moderate
efficiency
Type of Skill In-depth In depth Both functional and
Development functional skills product Product skill
knowledge development
Coordination Poor Good Good
s across
functions
Adaptability Poor Good Moderate

Environment Stable Heterogeneous Complex

for which best environment multiple
suited demand
Hybrid Structure
Sun Petrochemical Products
President

Functional Chief
Human Technology Financial
Resources Vice Services
Structure Counsel
Director President Vice Pres.

Product Fuels Lubricants Chemicals

Vice Vice Vice
Structure President President President

Sources: Based on Linda S. Ackerman, Transition Management:

An In-Depth Look at Managing Complex Change,
Organizational Dynamics (Summer 1982): 46-66;
and Frank Ostroff, The Horizontal Organization,
(New York: Oxford University Press, 1999), Fig. 2.1, 34.
The Relationship of Structure to Organizations
Need for Efficiency vs. Learning
Functional with
Functional cross-functional Divisional Matrix Modular
Structure teams, integrators Structure Structure Structure

Horizontal:
Coordination
Learning
Dominant Innovation
Structural Vertical: Flexibility
Control
Approach
Efficiency
Stability
Reliability
Application of Structural Design
Each structure meets different needs and is
a tool that can help managers be more
effective
Structural alignment aligns structure
with organizational goal
Symptoms of Structural Deficiency:
Decision making is delayed or lacking quality
Organization cannot meet changing needs
Employee performance declines, needs are not
meet
Too much conflict
Environmental Characteristics and
Organizational Actions

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Selecting Strategy and Design
A strategy is a plan for interacting with the
competitive environment
Managers must select specific strategy
design
Models exist to aid in formulating strategy:
Porters Five Forces
Miles and Snows Strategy Typology

26
Porters Competitive Strategies

27
 Miles and Snows
Strategy Typology
Managers should seek to formulate strategy that matches
the demands of the external environment
Prospector
Learning orientation; flexible, fluid, decentralized structure
Values creativity, risk-taking, and innovation
Defender
Efficiency orientation; centralized authority and tight cost control
Emphasis on production efficiency, low overhead
Analyzer
Balances efficiency and learning; tight cost control with flexibility
and adaptability
Emphasis on creativity, research, risk-taking for innovation
Reactor
No clear organizational approach; design characteristics may shift
abruptly depending on current needs
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Organiza
tion
Design
Outcome
s of
Strategy
Assessing Organizational
Effectiveness
Effectiveness takes into consideration a
range of variables at both the organizational
and departmental levels.
Efficiency relates to the working of the
organization and amount of resources used
to produce output.
Measuring Effectiveness:
The Goal Approach
The Resource-Based Approach
The Internal Process Approach

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Traditional Effectiveness Approach
Organisation
Resources Output
Resources&&
Inputs Internal Activities Products /
Inputs
& Processes Services

Resource Based Internal Process Goal Approach

Approach Approach
Organisation Effectiveness Indicators
Resource Based Internal Process Goal
Bargaining Culture & work Profitability
Position Climate Market share
Environment Operational Growth
Interpretation Efficiency Social
ability Communication responsibility
Ability to use efficiency:
tangible and Horizontal &
Intangible Vertical
resources for Employee Growth
An Integrated Effectiveness Model
Competing values model tries to
balance concern with various parts of the
organization

The human relations emphasis

incorporates the values of an internal focus
and flexible structure

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Four Approaches to Effectiveness Values

33
Balance Scorecard Approach
Decision-Making Processes
 Dan Ariely -Predictably Irrational: The Hidden
Forces That Shape Our Decisions

Purpose -
How systematic certain mistakes arehow we repeat them
again and again
Begin to learn how to avoid some of them
Corporate Culture
and Values
What is Culture?
Values, norms, guiding beliefs, and understandings that
are shared by members of an organization
Taught to new members as the correct way to think, feel, and
behave

Organizational culture exists at two levels

Observable symbols
Underlying values

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Observable Aspects of
Organizational Culture
Organizational Design
and Culture
Managers
want a
corporate
culture that
reinforces
the strategy
and
structural
design the
organization
needs to be
effective
within
 Using the CV framework

The framework serves as a basis for

diagnosing the predominant culture of an
organization
assessing whether it is responding
appropriately to the challenges and changes in
the environment
helping to diagnose and manage the
interrelationships, congruencies and
contradictions in the organization
Altogether, the framework helps leaders to
improve in a comprehensive way the
organizations performance and value
creation.
 Organizational
Conflicts, Power and
Politics
Sources of Conflict
Goal Incompatibility

Differentiation

Task Interdependence

Limited Resources
Interpersonal Approaches of approaching
the other party in conflict situation

Each approach can be placed in a

two dimensional grid

Cooperativeness:
Cooperativeness:
Attempting
Attemptingto
tosatisfy
satisfythe
theother
otherpartys
partys
concerns.
concerns.
Assertiveness:
Assertiveness:
Attempting
Attemptingto
tosatisfy
satisfyones
onesown
ownconcerns.
concerns.
 Competing Collaborating
My way or the highway Two heads are better than one
Useful for: Useful for:
Quick action when peer conflict is involved
Unpopular decisions when trying to gain commitment
Vital issues through consensus building
when fostering intimate or Compromising Integrating solutions
Learning
supportive relationships is not
critical
Lets make a deal Merging perspectives
Useful for:
When to Use Moderate importance
Time constraints
Temporary solutions
Useful for: Equal power Useful for:
Issues of low importance Creating good will
Keeping the peace
Reducing tensions
when maintaining the relationship
Buying time
outweighs other considerations
Low power
Ill think about it tomorrow It would be my pleasure
Avoiding Accommodating
Power and Organizations
Power is the potential ability of one person to influence
other people
Individual versus Organizational Power
Legitimate Power
Reward Power
Coercive Power
Expert Power
Referent Power

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Vertical Sources of Power
Formal Position legitimate power
accrued to top positions
Resources resources can be used as a
tool for power
Control of Information information is a
primary business source
Network Centrality being centrally
located in the organization and having
access
People loyal executives/managers

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Strategic Contingencies That Influence Horizontal Power among
Departments
 Political Processes in Organizations
Politics is the use of power to influence decisions toward
goals
Organizational Politics - activities to acquire, develop,
and use power to influence others and obtain the preferred
outcome where is uncertainty or disagreement about the
choices
Domains of political activity:
Structural Change
Management Succession
Resource Allocation
Power and Political Tactics in
Organizations
What is Creativity?
Creativity is the production of novel and useful ideas in any
domain
Traditional wisdom
Person centric approach -Creativity is something done by creative
people

Contemporary Approach
All humans with normal capacities are able to produce at least
moderately creative work in some domain

Social environment can influence both the level and frequency of

creative behavior
Component Model of Creativity
Expertise
knowledge technical, procedural
Creativity Skills
how flexibly and imaginatively people
approach the problem
Task Motivation
inner passion to solve the problem
Assess New Hires for Creativity
Oct 11, 2016: Management Tip of the Day
from Harvard Business Review

To build a team of creative thinkers,

hire people who are
Open to new experiences
Resilience
Emotional stability
Flexibility
Empathy
Adapted fromA Data-Driven Approach to Group Creativity,by Bastian
Bergmann and Joe Schaeppi

Creative Process
(Leonard & Swap, 1999)
Preparation
Selecting group members
Problem Opportunity
clearly identifying the problem requiring creativity
Divergent Thinking-
Breaking away from familiar or established way of doing things
Generate a wide range of options
Convergent Thinking
selection of the best option
Obstacles to team creativity: Thompson (2003)

Social loafing

Conformity

Production blocking: decrease in good

ideas
Team members have a hard time
concentrating, or getting their ideas
heard in the group interchange.
 Teams Operating Norms
Show respect for each other
Active listening
Right to disagree and an obligation to challenge others
assumptions
Opportunity to speak
Conflicting views important source of learning
Attack ideas and assumptions but not individuals
Calculated risk is good
Failures should be acknowledged and examined
Welcome Play attitudes
Celebrate success as a group
Forces Driving the Need for Major
Organizational Change
Strategic Types of Change
Technology Change
To be both an organic and mechanistic,
managers implement an ambidextrous
approach
Structures and management processes that
push innovation
Horizontal Coordination for
Innovation
Dual-Core Approach to
Organization Change
Lewins Three Phases of Planned Change
Dealing with Resistance to
Change
 Changing and Succeeding Under Any Conditions
By John Kotter & Holger Rathgeber

1. Create a sense of urgency.

2. Pull together the guiding team.

3. Develop the change vision and strategy.

4. Communicate for understanding and buy-in.

5. Empower others to act.

6. Produce short-term wins.

7. Dont let up.

8. . Create a new culture