ORGANIZATIONAL BEHAVIOUR UNIT 3 Bharati Vidyapeeths Institute of

ORGANIZATIONAL BEHAVIOUR [UNIT 3] © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 1

Learning Objectives of Unit 3 • • Organizational Climate Culture and Managerial Ethos Organizational Structure & Design Managerial Communication © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 2

Organizational Climate • Forehand Gilmer have defined Organizational Climate as “a set of characteristics that describe an organization in the form that : 1. distinguishes one organization from another, 2. are relatively enduring over a period of time, and 3. influence the behavior of people in the organization. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 3

Organizational Climate Some More Definitions: ü Organizational climate is concerned with large units; it characterizes properties of an entire organization or major subunits. ü Organizational climate describes a unit of organization rather than evaluates it or indicates emotional reactions to it. ü Organizational climate arises from routine organizational practices that are important to the organization and its members. ü Organizational climate influences members’ behaviors and attitudes. ü Put simply, the set of internal characteristics that distinguish one organization from another and influence the behavior of members is the organizational climate of the school. ü Personality is to individual and climate is to organization. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 4

Organizational Climate [Introduction] • The concrete expression of organizational culture is organizational climate. • Climate may be thought of as the perception of the characteristics of an organization • It is Multi-dimensional in nature. • Fairness, Affiliation, Innovativeness, Attitude toward knowledge sharing, Anticipated reciprocal relationships, Subjective norm to share knowledge etc. are the pillars of organizational climate. • Climate has an important influence on performance and satisfaction of the employee. If the climate is favorable, there would be greater organizational effectiveness. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 5

Organizational Climate Managerial policies Organizational Structure Organizational Technology Employee’s characteristics, perceptions, learning, motivation, goals, ab ilities etc. Individual Outcomes, Satisfaction, Commitment. ORGANISATIONAL CLIMATE External & Internal Employment © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 6

Dimensions of Organizational Climate • • • Member’s Orientation Interpersonal Relationships Individual Freedom Degree of Control Type of Structure Management Orientation Reward System Communication Conflict Management Degree of Trust Risk Taking © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 7

Leadership and Climate Leadership style Nature Authoritarian Management directs. Threats and punishment are employed to enforce order. Downward communication. Paternalistic Basically authoritarian, but permits some two-way communication between superior-subordinate. Rewards and threats are employed to enforce orders. Consultative Participative Orders are issued and goals set after consultation with employee. Teamwork to some extent is encouraged. Employees are fully involved in setting goals and two-way communication is the norm. Effect of Climate Insecurity amongst employee is high. Morale is poor with high rates of absenteeism and turnover. Productivity better as compared with the authoritarian style but morale remains on the lower side. Absenteeism and turnover are high. Productivity is good and morale fair. Absenteeism and turnover are low. Productivity and morale are both very satisfactory. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 8

Organizational Culture and Climate Culture versus Climate • Culture is shared expressions. • norms, values, tacit Climate is perceptions of behavior § Climate is a “relatively enduring quality of the organizational environment that is experienced by participants, affects their behavior, and is based on their collective perceptions or behavior in organization”. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 9

Organizational Culture and Climate as Resources of the Firm Organizational Culture Organizational Climate Organizational Outcomes Organizational climate dimensions have been linked to productivity gains. (Patterson, Warr & West, 2004) © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 10

Improving Culture & Climate Some Change Strategies: • The Clinical Strategy • The Growth-Centered Strategy • Norm-Changing Strategy © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 11

Change Strategies The Clinical Strategy § § § Gaining knowledge of the organization Diagnosis Prognosis Prescription Evaluation © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 12

Change Strategy The Growth-Centered Strategy: Acceptance of the following set of assumptions: § Change is a property of healthy organizations. § Change has direction. § Change should imply progress. § Managers should have high potential for development and implementation of change. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak the U 3. 13

Change Strategies Norm-Changing Strategy: The key norms of an organization are usually related to such important areas as control, support, innovation, social relations, rewards, conflicts and standards of excellence. Five Steps to changing norms: 1. Surface norms: Identify existing norms. 2. Articulate new directions: Managers agreement on new directions. 3. Establish new norms: Identify new norms that will lead to improvement. 4. Identify culture gaps: Discrepancy between actual and desired norms. 5. Close the culture gaps: Replace old norms with new ones. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 14

CONCLUSION 1. Organizations have distinctive cultures, core values and beliefs which provide members with a sense of organizational mission and identity. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 15

CONCLUSION 5. A custodial culture of employee control impedes the socioemotional development of employee. 6. The organizational climate of an organization is the set of management perceptions of the dominant behaviors of organizational participants. 7. Openness of organizational climate is positively related to loyalty, trust and commitment of employees. 8. The health of organizational climate is positively related to openness in member’s interactions as well as organizational effectiveness. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 16

CONCLUSION 10. Changing the culture or climate of an organization is usually a difficult, continuous and long-term process. 11. Good Organizational Climate is instrumental to higher employee satisfaction, better human relations and higher productivity. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 17

CULTURE & MANAGERIAL ETHOS © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 18

What is Organizational Culture? Ø Organizational culture § The system of shared actions, values, and beliefs that develops within an organization and guides the behavior of its members. § Called corporate culture in the business setting. § No two organizational cultures are identical. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 19

What is Organizational Culture? Ø Organizational culture addresses two important survival issues. § External adaptation. ü What precisely needs to be accomplished, and how can it be done? § Internal integration. ü How do members resolve the daily problems associated with living and working together? © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 20

What is Organizational Culture? Ø External adaptation. § Involves reaching goals and dealing with outsiders. § Issues to be considered: ü Tasks to be accomplished. ü Methods to be used to achieve goals. ü Methods of coping with success and failure. ü Developing acceptable ways of telling outsiders how good they really are. ü Knowing when to admit defeat. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 21

What is Organizational Culture? Ø External adaptation involves answering important goal- related questions regarding coping with reality. § What is the real mission? § How do we contribute? § What are our goals? § How do we reach our goals? § What external forces are important? § How do we measure results? § What do we do if specific targets are not met? § How do we tell others how good we are? § When do we quit? © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 22

What is organizational culture? Ø Internal integration. § Involves the creation of a collective identity and with finding ways of matching methods of working and living together. § Issues to be considered: ü Deciding who is a member and who is not. ü Developing an understanding of acceptable unacceptable behavior. ü Separating friends from enemies. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak and U 3. 23

What is organizational culture? Ø Internal integration involves answering important questions associated with living together. § What is our unique identity? § How do we view the world? § Who is a member? § How do we allocate power, status, and authority? § How do we communicate? § What is the basis for friendship? © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 24

What is organizational culture? Ø Dominant culture, subcultures, and countercultures. § Subcultures. ü Groups of individuals with a unique pattern of values and philosophy that is consistent with the organization’s dominant values and philosophy. ü Strong subcultures are often found in high performance teams. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 25

What is organizational culture? Ø Dominant culture, subcultures, and countercultures — cont. § Countercultures. ü Groups of individuals with a pattern of values and philosophy that reject the surrounding culture. ü Mergers and acquisitions may produce countercultures in an organization. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 26

What is organizational culture? Ø Importing subcultures. § Large organizations import subcultures when hiring people. potentially important § Globalization and expansion through mergers and acquisitions produce challenges with subcultures and dealing with culture clash. importing § The relevance of subcultures to the entire organization can affect operations and the ability to change. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 27

What is organizational culture? Ø Valuing cultural diversity — the multicultural organization. § A firm that values diversity but systematically works to block the transfer of societally based subcultures into the fabric of the organization. § Taylor Cox provides a five step program for developing a multicultural organization. ü May not apply to organizations located in countries with relatively homogeneous populations. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 28

What is organizational culture? Ø Levels of organizational culture. § Level 1: Observable culture. ü The way things are done in the organization. § Level 2: Shared values. ü All members have been exposed to the value and recognize their importance. § Level 3: Common assumptions. ü The taken-for-granted truths that members share as a result of their joint experience. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 29

What are the observable aspects of organizational culture? Ø Stories, rituals, and symbols. § Organizations are rich with stories about the organization’s culture and operations. § Sagas. ü Heroic accounts of organizational accomplishments. § Rites. ü Standardized and recurring activities that are used at special times to influence organizational members. § Rituals. ü Systems of rites. § Cultural symbols. ü Any object, act, or event that serves to transmit cultural meaning. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 30

What are the observable aspects of organizational culture? Ø Culture often specifies rules and roles. § Rules. ü The various types of actions that are appropriate. § Roles. ü Where individual members stand in the social system. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 31

What are the observable aspects of organizational culture? Ø The evolution of shared meaning from observable culture. § Outside observers may not see the same cultural aspects as organizational members do. § This is because outside observers do not have the same shared set of meanings and perceptions. Ø Shared common values lie at the heart of culture. Ø Shared values help: § Turn routine activities into valuable, important actions. § Tie the company to the important values of society. § Provide a distinctive source of competitive advantage. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 32

How do values and assumptions influence organizational culture? Ø Some successful organizations have strong cultures. § A strong culture reflects a broadly and deeply shared value system. § A strong culture can reinforce a singular view or the organization and its environment. üNeeded dramatic change may be prevented. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 33

How do values and assumptions influence organizational culture? Ø National culture influences. § Widely held common assumptions may be traced to the larger culture of the host society. § National cultural values may become embedded in expectations of organization members. § Managers need to be sensitive to national cultural differences and their impact on organizational culture. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 34

How can organizational culture be “managed, ” “nurtured, ” and “guided”? Ø Management philosophy. § Reflects the management subculture. § Links key goal-related strategic issues with key collaboration issues and comes up with a series of general ways by which the firm will manage its affairs. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 35

How can organizational culture be “managed, ” “nurtured, ” and “guided”? Ø A well-developed management philosophy: § Establishes generally understood boundaries on on all members of the firm. § Provides a consistent way for approaching new and novel situations. § Helps hold individuals together by showing them a known path to success. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 36

How can organizational culture be “managed, ” “nurtured, ” and “guided”? Ø Strategies for managing — or building, reinforcing, and changing — organizational culture. § Directly modifying observable culture, shared values, and common assumptions. § Using organization development techniques to modify specific elements of the culture. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 37

How can organizational culture be “managed, ” “nurtured, ” and “guided”? Ø Continuous cultural development. § Organization development (OD) is the application of behavioral science knowledge in a long-range effort to improve an organization’s ability to cope with change in its external environment and to increase its internal problem-solving capabilities. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 38

How can the process of organization development enhance organizational culture? Ø Organizational development. § Provides well-proven methods for developing and changing external adaptation and internal integration. § Helps organization members become more active and confident in maintaining the culture and pursuing effectiveness. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 39

How can the process of organization development enhance organizational culture? Ø Underlying assumptions of OD. § Individual level. ü Respect for people and their capabilities. § Group level. ü Belief that groups can be good for both people and organizations. § Organizational level. ü Respect for the complexity of an organization as a system of interdependent parts. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 40

How can the process of organization development enhance organizational culture? Ø Organization development goals. § Outcome goals. ü Mainly deal with issues of external adaptation. ü Achieving improvements in task performance by improving external adaptation capabilities. § Process goals. ü Mainly deal with issues of internal integration. üAchieving improvements in communication, interaction, and decision making among organization’s members. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 41

How can the process of organization development enhance organizational culture? Ø In pursuing outcome and process goals, OD helps by: § Creating an open problem solving climate. § Supplementing formal authority with knowledge and § § competence. Moving decision making where relevant information is available. Building trust and maximizing collaboration. Increasing the sense of organizational ownership. Allowing people to exercise self-direction and selfcontrol. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 42

How can the process of organization development enhance organizational culture? Ø Group and intergroup OD interventions. § Team building. ü Activities to improve the functioning of a group. § Process consultation. ü Activities to improve the functioning of key team processes. § Intergroup team building. ü Activities to improve the functioning or two or more groups. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 43

Organization Structure & Design © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 44

Defining Organizational Structure § The formal arrangement of jobs within an organization. Organizational Design § A process involving decisions about six key elements: ü Work specialization ü Departmentalization ü Chain of command ü Span of control ü Centralization and decentralization ü Formalization © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 45

Purposes of Organizing • Divides work to be done into specific jobs and departments. • Assigns tasks and responsibilities associated with individual jobs. • Coordinates diverse organizational tasks. • Clusters jobs into units. • Establishes relationships among individuals, groups, and departments. • Establishes formal lines of authority. • Allocates and deploys organizational resources. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 46

Organizational Structure Work Specialization § The degree to which tasks in the organization are divided into separate jobs with each step completed by a different person. § Overspecialization can result in human diseconomies from boredom, fatigue, stress, poor quality, increased absenteeism, and higher turnover. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 47

Departmentalization by Type Functional § Grouping jobs by functions performed Product § Grouping jobs by product line Geographical § Grouping jobs on the basis of territory or geography Process § Grouping jobs on the basis of product or customer flow Customer § Grouping jobs by type of customer and needs © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 48

Functional Departmentalization • Advantages • Efficiencies from putting together similar specialties and people with common skills, knowledge, and orientations • Coordination within functional area • In-depth specialization • Disadvantages • Poor communication across functional areas • Limited view of organizational goals © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 49

Geographical Departmentalization • Advantages • More effective and efficient handling of specific regional issues that arise • Serve needs of unique geographic markets better • Disadvantages • Duplication of functions • Can feel isolated from other organizational areas © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 50

Product Departmentalization + + + – – Allows specialization in particular products and services Managers can become experts in their industry Closer to customers Duplication of functions Limited view of organizational goals © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 51

Process Departmentalization + More efficient flow of work activities – Can only be used with certain types of products © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 52

Customer Departmentalization + Customers’ needs and problems can be met by specialists - Duplication of functions - Limited view of organizational goals © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 53

Organization Structure (cont’d) Chain of Command § The continuous line of authority that extends from upper levels of an organization to the lowest levels of the organization and clarifies who reports to who. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 54

Organization Structure (cont’d) Authority § The rights inherent in a managerial position to tell people what to do and to expect them to do it. Responsibility § The obligation or expectation to perform. Unity of Command § The concept that a person should have one boss and should report only to that person. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 55

Organization Structure (cont’d) Span of Control § The number of employees who can be effectively and efficiently supervised by a manager. § Width of span is affected by: ü Skills and abilities of the manager ü Employee characteristics ü Characteristics of the work being done ü Similarity of tasks ü Complexity of tasks ü Physical proximity of subordinates ü Standardization of tasks © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 56

Contrasting Spans of Control © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 57

Organization Structure (cont’d) Centralization § The degree to which decision-making is concentrated at a single point in the organizations. ü Organizations in which top managers make all the decisions and lower-level employees simply carry out those orders. Decentralization § Organizations in which decision-making is pushed down to the managers who are closest to the action. Employee Empowerment § Increasing the decision-making authority (power) of employees. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 58

Factors that Influence the Amount of Centralization • More Centralization Ø Environment is stable. Ø Lower-level managers are not as capable or experienced at making decisions as upper-level managers. Ø Lower-level managers do not want to have a say in decisions. Ø Decisions are relatively minor. Ø Organization is facing a crisis or the risk of company failure. Ø Company is large. Ø Effective implementation of company strategies depends on managers retaining say over what happens. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 59

Factors that Influence the Amount of Centralization • More Decentralization Ø Environment is complex, uncertain. Ø Lower-level managers are capable and experienced at making decisions. Ø Lower-level managers want a voice in decisions. Ø Decisions are significant. Ø Corporate culture is open to allowing managers to have a say in what happens. Ø Company is geographically dispersed. Ø Effective implementation of company strategies depends on managers having involvement and flexibility to make decisions. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 60

Organization Structure (cont’d) Formalization § The degree to which jobs within the organization are standardized and the extent to which employee behavior is guided by rules and procedures. ü Highly formalized jobs offer little discretion over what is to be done. ü Low formalization means fewer constraints on how employees do their work. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 61

Organizational Design Decisions Mechanistic Organization § A rigid and tightly controlled structure Organic Organization § Highly flexible and adaptable structure ü High specialization ü Non-standardized jobs ü Rigid departmentalization ü Narrow spans of control ü Fluid structure ü High formalization ü Little direct supervision ü Limited information network (downward) ü Minimal formal rules ü Low decision participation team-based ü Open communication network ü Empowered employees © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 62

Contingency Factors Structural decisions are influenced by: § Overall strategy of the organization ü Organizational structure follows strategy. § Size of the organization ü Firms change from organic to mechanistic organizations as they grow in size. § Technology use by the organization ü Firms adapt their structure to the technology they use. § Degree of environmental uncertainty ü Dynamic environments require organic structures; mechanistic structures need stable environments. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 63

Contingency Factors (cont’d) Strategy Frameworks: § Innovation ü Pursuing competitive advantage through meaningful and unique innovations favors an organic structuring. § Cost minimization ü Focusing on tightly controlling costs requires a mechanistic structure for the organization. § Imitation ü Minimizing risks and maximizing profitability by copying market leaders requires both organic and mechanistic elements in the organization’s structure. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 64

Contingency Factors (cont’d) Strategy and Structure § Achievement of strategic goals is facilitated by changes in organizational structure that accommodate and support change. Size and Structure § As an organization grows larger, its structure tends to change from organic to mechanistic with increased specialization, departmentalization, centralization, and rules and regulations. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 65

Organizational Designs (cont’d) Contemporary Organizational Designs § Team structures ü The entire organization is made up of work groups or selfmanaged teams of empowered employees. § Matrix and project structures ü Specialists from different functional departments are assigned to work on projects led by project managers. ü Matrix and project participants have two managers. ü In project structures, employees work continuously on projects; moving on to another project as each project is completed. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 66

An Example of a Matrix Organization © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 67

TQM © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 68

TQM Total - made up of the whole Quality - degree of excellence a product or service provides Management - act, art or manner of planning, controlling, directing, …. Therefore, TQM is the art of managing the whole to achieve excellence. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 69

TQM Total Quality Management TQM is a philosophy which applies equally to all parts of the organization. TQM can be viewed as an extension of the traditional approach to quality. TQM places the customer at the forefront of quality decision making. Greater emphasis on the roles and responsibilities of every member of staff within an organization to influence quality. All staff are empowered. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 70

TQM “Do the right things right the first time, every time. ” TQM is all managers leading and facilitating all contributors in everyone’s two main objectives: (1) Total client satisfaction through quality products and services; and (2) Continuous improvements to processes, systems, people, suppliers, partners, products, and services. Total Quality Management © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 71

The TQM System Continuous Improvement Objective Principles Elements Customer Focus Process Improvement Total Involvement Leadership Education and Training Supportive structure Communications Reward and recognition Measurement © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 72

The TQM System © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 73

Benchmarking • Benchmarking is the process of comparing the cost, cycle time, productivity, or quality of a specific process or method to another that is widely considered to be an industry standard or best practice. Essentially, benchmarking provides a snapshot of the performance of your business and helps you understand where you are in relation to a particular standard. The result is often a business case for making changes in order to make improvements. The term benchmarking was first used by cobblers to measure ones feet for shoes. They would place the foot on a "bench" and mark to make the pattern for the shoes. Benchmarking is most used to measure performance using a specific indicator (cost per unit of measure, productivity per unit of measure, cycle time of x per unit of measure or defects per unit of measure) resulting in a metric of performance that is then compared to others. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 74

Types of Benchmarking Types of benchmarking 1) Process benchmarking The initiating firm focuses its observation and investigation of business processes with a goal of identifying and observing the best practices from one or more benchmark firms. Activity analysis will be required where the objective is to benchmark cost and efficiency; increasingly applied to back-office processes where outsourcing may be a consideration. 2) Financial benchmarking Performing a financial analysis and comparing the results in an effort to assess your overall competitiveness. 3)Performance benchmarking Allows the initiator firm to assess their competitive position by comparing products and services with those of target firms. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 75

4) Product benchmarking The process of designing new products or upgrades to current ones. This process can sometimes involve reverse engineering which is taking apart competitors products to find strengths and weaknesses. 5)Strategic benchmarking Involves observing how others compete. This type is usually not industry specific meaning it is best to look at other industries. 6)Functional benchmarking A company will focus its benchmarking on a single function in order to improve the operation of that particular function. Complex functions such as Human Resources, Finance and Accounting and Information and Communication Technology are unlikely to be directly comparable in cost and efficiency terms and may need to be disaggregated into processes to make valid comparison. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 76

© Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 77

© Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 78

• In a business enterprise, downsizing is reducing the number of employees on the operating payroll. Some users distinguish downsizing from a layoff , with downsizing intended to be a permanent downscaling and a layoff intended to be a temporary downscaling in which employees may later be rehired. Businesses use several techniques in downsizing, including providing incentives to take early retirement and transfer to subsidiary companies, but the most common technique is to simply terminate the employment of a certain number of people. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 79

Downsizing Here are many reasons a company may decide to downsize its workforce or resources. One major reason is a decline in profits, sales, or a macro-economic shift leading to falling business. In order to survive on a long-term basis, a company may have to downsize in order to remain afloat in a diminished market. Merging with another company may also result in downsizing, as both businesses may have redundant jobs and even departments that will require layoffs and reductions in the new corporate makeup. Sometimes, a company will also embark on a program of organizational downsizing as part of a restructuring plan to increase efficiency, decrease costs, and commit to a new organizational strategy. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 80

Downsizing Organizational downsizing may also involve the reduction of workplace resources, as well as people. This may mean cutting down on amenities and employee programs, such as gym memberships, company cars, and cafeteria services. Employee services, such as health clinics, workshops, and educational assistance, may also be cut. Economizing throughout the business can help reduce waste, while at the same time potentially allowing the preservation of more jobs. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 81

Controlling: Process and Techniques © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 82

Features of Control 1. 2. 3. 4. 5. 6. 7. 8. 9. Managerial Function Pervasive Function Review of past events / Feedback information Forward Looking Continuous Process Dynamic Process Action Oriented / Corrective Action Control does not restrict the right of individual. It serves as the guide for the worker about permissible deviations from the standard. Control is based on facts and © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 83

Elements of Control According to Henry Fayol, “Control consists in verifying whether everything occurs in agreement with the plan adopted, the instruction issued and principles established. ” 1. 2. 3. 4. 5. Establishment of Standards [Planning]. Operations [Organizing, Staffing & Directing]. Measurement of Performance. Comparing Performance with standards. Taking Corrective actions. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 84

The Organizational Control Process Controlling as a management function involves following steps: 1. Establishment of standards- Measurable or tangible They can be in form of cost, output, expenditure, time, profit, etc. Non-measurable or intangible-performance of a manager, deviation of workers, their attitudes towards a concern. 2. Measurement of performance 3. Comparison of actual and standard performance 4. Taking remedial actions- © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 85

The Organizational Control Process © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 86

Kinds of Control 1. Historical Control: It measures results after the happening of an event. It tell management to what extent objectives are actually achieved. Example: Budgetary & Financial Control. 2. Predictive Control: It attempts to anticipate problems before they actually occur, i. e. ; Prevention is better than Cure policy applied. Example: Anticipation of shortage of cash or a particular raw material needed for production can be arranged well in advance. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 87

Kinds of Control 3. Concurrent Control: It is concerned with the adjustment of performance before any major damage is done like navigator of a ship adjusts his movement continuously in the right direction of the destination. Example: Immediate corrective action taken before something controversial has been published. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 88

Advantages of Control 1. 2. 3. 4. 5. Control brings order in the organization. Absence of control means Disorder. It helps in improving the performance of the subordinates. It ensures better utilization of all types of resources that contributes to the progress of business. Control points out the shortcomings of planning as well as other function of management such as organizing, staffing and directing. Preventive steps will reduce the chances of mistakes being repeated in future. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 89

Limitations of Control 1. 2. 3. 4. 5. An enterprise can not control the external factor such as government policy, technological changes, fashion changes etc. Control may block the initiatives of subordinates or reduce their spirit. The effectiveness of controls mainly depends on their acceptance by the subordinates. Control is an expensive process that consumes lots of money, time and effort. Measurable standards or Standard are essential to control but many aspects of business like goodwill, reputation, employee morale or public relations cannot be measured in quantitative terms. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 90

Requirements of Effective Control 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Emphasis on objectives. Efficiency of control techniques. Direct Control. Flexibility. Corrective actions. Control by Exceptions. Strategic Point Control. Self Control. Forward Looking Control. Consideration of Human factors. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 91

Control by Exception An important aspect of management. It concentrate only on key areas of activity on which the entire organization’s performance depends. Only significant deviations (i. e. exceptions) from standards of performance should be brought to the management attentions. An attempt to go through all deviations tend to increase unnecessary work and decrease attention on important problems. Example: Increasing transportation cost or raw material cost affect the price of final goods more than the paper or postal cost increment. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 92

CONCLUSION Planning without Control is Meaningless and Control without Planning is Blind. Planning identifies the goals and determines the way of achieving them. It is control which ensures attainment of goals and determines the ways of achieving them. A battery of various control techniques is employed to ensure better measurement of organizational performance. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 93

Organizational Change and Development © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 94

Organizational change • Organizational change is the movement of an organization away from its present state and toward some desired future state to increase its effectiveness • Any alterations in the people, structure, or technology of an organization • Businesses are now operating in a rapidly changing markets and conditions. • Pressure from competitors and various external changes is forcing businesses to respond to change and make changes to their existing operations. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 95

Three Categories of Change © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 96

Types of Change Structural § Changing an organization’s structural components or its structural design Technological § Adopting new equipment, tools, or operating methods that displace old skills and require new ones ü Automation: replacing certain tasks done by people with machines ü Computerization People § Changing attitudes, expectations, perceptions, and behaviors of the workforce Organizationaldevelopment (OD) § Techniques or programs to change people and the nature and quality of interpersonal work relationships. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 97

Some External Forces for Change Information Technology Globalization & Competition Courtesy National Board of Antiquities, Finland Demography © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 98

Organizational change © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 99

Changing People: Some Basic Steps Step 3: Refreezing Incorporating the changes, creating and maintaining a new organizational system Step 2: Changing Attempting to create a new state of affairs Step 1: Unfreezing Recognizing the need for change t n e rr e w Ne t a t S te a t S Cu © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 100

Basic stages of implementing change • Unfreezing stage Breaking from the old ways of doing things, unfreezing the old organizational culture by communication • Moving stage Instituting or establishing the change, establishing a vision for change direction, and directing people to the change • Refreezing stage Reinforcing and supporting the new ways, strengthening and supporting the change by providing new control and rewarding systems © Photo. Disc © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 101

Managing Resistance to Change Why People Resist (oppose, refuse to accept) Change? § The ambiguity and uncertainty that change introduces § The comfort of old habits § A concern over personal loss of status, money, authority, friendships, and personal convenience § The perception that change is incompatible with the goals and interest of the organization © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 102

Resistance To Change Individual resistance Organizational resistance • Habit • Structural inactivity • Security • Limited focus of • Economic factors change • Fear of the unknown • Group inactivity • Selective information processing • Threat or risk or danger to expertise • Threat to established power relationships • Threat to established resource allocations © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 103

Managing Resistance to Change Overcoming resistance to change • Education and communication • Participation • Facilitation and support • Negotiation © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 104

Strategies for Managing Cultural Change • Set the tone through management behavior; top managers, particularly, need to be positive role models. • Create new stories, symbols, and habits to replace those currently in use. • Select, promote, and support employees who adopt the new values. • To encourage acceptance of the new values, change the reward system. • Replace unwritten expectations. norms with clearly specified • Work to get agreement through employee participation and creating a climate with a high level of trust. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 105

Characteristics of Change-Capable Organizations • Link the present and the future. • Make learning a way of life. • Actively support and encourage day-to-day improvements and changes. • Integrate technology. • Build and expand trust. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 106

Summary • Just as every individual has a personality that makes him/her unique, each organization has an organizational climate, culture and ethos that clearly distinguishes its personality from other organization. • It is very complex job and continuous process that needs the help of organizational structure design to achieve organizational goals. • Communication helps in achieving meaningful interaction in organization. Barriers to effective communication generate confusion, conflict and misunderstanding in the organization by creating bottlenecks, delays and distortion of information. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 107

Review Questions [Objective Types] 1. What does the term organization climate suggest? 2. How do organizational values and norms influence the organizational climate? 3. What is the role of organizational culture? 4. What are organizational values and norm? 5. Is productivity affected by managerial ethos? 6. Explain the term span of control. 7. What purpose is served by organization chart? 8. Give any three feature of matrix organization. 9. What is a virtual organization? 10. What are the disadvantages of grapevine? © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 108

Review Questions [Short Answer Types] 1. What are the factors that influence the climate of an organization? 2. Differentiate mechanistic and organic culture in organization. 3. Discuss the methods to measure organizational climate and culture. 4. Explain Graicuna’s theory of span of control with suitable examples. 5. What is the importance of organization structure? 6. How is matrix organization an improvement over project structure? Explain with the help of a diagram. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 109

Review Questions [Short Answer Types] 7. When is geographical structure more suitable? 8. What are communication networks? 9. How formal channels of communication provide vertical, horizontal and lateral flow? 10. Explain briefly the types of skills required for effective communication in the organization. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 110

Review Questions [Long Answer Types] 1. With the help of diagram, differentiate the concept of geographical and customer based structure of organization. 2. “Moral and productivity move together like the east and west sides of elevator”. Comment. 3. Discuss the basic considerations to be kept in view while designing an organization structure. 4. Explain the term span of control. What are the factors influencing span of control? 5. Define project organization and explain its merits and demerits. 6. Explain the concept of ‘Network Structure’ with the help of a diagram. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 111

Review Questions [Long Answer Types] 7. Explain types of network with diagrams formal and informal communication. 8. How directions of flow of communication help in achieving effective communication in the organization? 9. What is informal communication? How can grapevine be used by the management for efficient management? 10. What are the barriers to communication? How can they be overcome? Explain with the help of suitable examples. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 112

Recommended Books © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 113

Recommended Books 5. Stoner, et. al. , “Management”, 8 th Edition, PHI, 2008. 6. Joseph W. Weiss, “Organisational Behaviour & Change, Managing Diversity, Cross-Cultural Dynamics & Ethics”, 5 th Edition, Vikas Publishing House, 2009. 7. Richard Pettinger, “Introduction to Management”, 5 th Edition, Palgrave Mc. Millan, 2008. 8. Udai Pareek, “Understanding Organisational Behaviour”, 3 rd Edition, Oxford University Press, 2008. © Bharati Vidyapeeth’s Institute of Computer Applications and Management, New Delhi-63, by Dr. Nitish Pathak U 3. 114