Organiza(onal  Analysis  

Sessions  11-­‐20  

For  Internal  Circula(on  Only.    Not  to  be  posted  on  the  internet.  

How Does an Organization Create Value?

•  Value creation takes place at three stages: input, conversion, and output – Inputs: include human resources,

information and knowledge, raw materials, money and capital

– Conversion: the way the organization uses human resources and technology to transform inputs into outputs

– Output: finished products and services that the organization releases to its environment

2 2

Uncertainty  –  open  system  –  survival  Certainty  –  closed  system  –  goal  achievement    

Technology   Environment  

Role  of  a  Manager  

•  Ensuring  buffering  of  core  ac(vi(es  to  control  the  transforma(on  process  

Measuring Effectiveness

•  What parameters should be used?

5

Ways to Organizational Effectiveness

Goal Accomplishment

Resource Acquisition

Strategic Constituencies

Satisfaction

Internal Processes

Structure-­‐Context  Alignment  

STRUCTURE  

CHARACTERISTICS  Age  &  Size  Culture  

Growth/  decline  

ENVIRONMENT  Compe((ve  Dynamics  

TASK  Technology  processes  

STRATEGY  Key  success  factors  

PEOPLE  Iden(ty  

Personali(es    

Technology  

•  Combina(on  of  skills,  knowledge,  abili(es,  techniques,  materials,  machines,  computers,  tools,  and  other  equipment  that  people  use  to  convert  or  change  raw  materials  (material,  informa(on  or  people)  into  valuable  goods  and  services  

Technical  Complexity  

•  Technical  complexity:  the  extent  to  which  a  produc(on  process  can  be  programmed  so  that  it  can  be  controlled  and  made  predictable  –  High  technical  complexity:  exists  when  conversion  

processes  can  be  programmed  in  advance  and  fully  automated  

–  Low  technical  complexity:  exists  when  conversion  processes  depend  primarily  on  people  and  their  skills  and  knowledge  and  not  on  machines  

9

Classification of Technology

•  Woodward – Unit – small batch manufacturing technology – Mass – large-batch manufacturing – Process production – continuous-production

process •  Perrow

– Task variability – number  of  excep(ons,  problems  or  novel  events  that  occur  in  the  department's  work

– Task analyzability - extent  to  which  the  work  is  mechanical,  clear  cut,  and  follows  an  objec(ve,  computa(onal  procedure  

Technology  Classifica(on  An

alyzability  

Variability  

CRAFT   NONROUTINE

ROUTINE ENGINEERING  

Classification of Technology  

•  Thompson  – Long  linked  technology  (sequen(al  interdependence)  

– Media(ng  technology  (pooled  interdependence)  –  Intensive  technology  (reciprocal  interdependence)  

Technology  Analysis  

•  Technical  complexity  •  Rou(neness  of  work  •  Standardiza(on  of  inputs/  outputs  •  Standardiza(on  of  transforma(on  processes  •  Task  variability  •  Task  analyzability      To  maximize  the  informa(on  available  and  reduce  uncertainty  

The  Organiza(onal  Environment  

14

Environment

•  Task Environment – the elements of an organization’s environment that are related to its goal attainment

•  Environmental Uncertainty – the amount and rate of change in the organization’s environment

15

Sources  of  Uncertainty  in  the  Environment  

•  Environmental  complexity:  the  strength,  number,  and  interconnectedness  of  the  specific  and  general  forces  that  an  organiza(on  has  to  manage,  the  heterogeneity/  range  of  ac(vi(es  an  organiza(on  has  to  manage  

•  Environmental  dynamism:  stability-­‐instability,  absence  of  pa`ern,  unpredictability  in  the  environment  

•  Environmental  richness/  munificence/  capacity:  Extent  to  which  environment  can  support  sustained  growth  

 16

Size  

•   Measured  in  number  of  employees  •   Formaliza(on,  specializa(on  and  standardiza(on  greater  in  larger  organiza(ons  

•   As  size  increases,  complexity  increases  

Strategy  and  the  Environment  

•  Organiza;onal  strategy:  pa`ern  of  decisions  and  ac(ons  taken  to  use  core  competences  

•  Core  competences:  the  skills  and  abili(es  in  value  crea(on  ac(vi(es  

18

19  

Strategy  and  Structure  

•  Innova(on  Strategy  -­‐  requires  flexibility  of  organic  structure  

•  Cost-­‐Minimiza(on  Strategy  -­‐  seeks  efficiency  and  stability  of  mechanis(c  structure  

•  Imita(on  Strategy  -­‐  combines  the  two  structures  to  maintain  (ght  control  and  low  cost  while  crea(ng  organic  subunits  

20  

Miles  and  Snow’s  Strategy  Typology  

•  Prospector  –  Values  crea(vity,  risk-­‐taking,  and  innova(on  

•  Defender  –  Efficiency  orienta(on;  centralized  authority  and  (ght  cost  control  

•  Analyzer  –  Balances  efficiency  and  learning;  (ght  cost  control  with  flexibility  and  adaptability  

•  Reactor  –  No  clear  organiza(onal  approach;  design  characteris(cs  may  shih  abruptly  depending  on  current  needs  

Interorganiza(onal  Strategies  for  Managing  Resource  Dependencies  

•  Two  basic  types  of  interdependencies  cause  uncertainty  

–  Symbio;c  interdependencies:  interdependencies  that  exist  between  an  organiza(on  and  its  suppliers  and  distributors  

–  Compe;;ve  interdependencies:  interdependencies  that  exist  among  organiza(ons  that  compete  for  scarce  inputs  and  outputs    

21

Interorganiza(onal  Strategies  

22

Managing Symbiotic Interdependencies

Managing Competitive Interdependencies  

Organiza(onal  Analysis:  Structural  Lens  

Differentiation and Integration are Opposing Structural Forces

thuisadfjhk

tathkhadfaf

tatstat

Type name hereType title here

atat

atast

atst

Type name hereType title here

Type title here

Differentiation Fragments the organization

through specialization of labor

Integration

Pulls the organization together through the coordination of

specialties

Differen(a(on  Horizontal differentiation

Degree of differentiation between organizational subunits.

Vertical differentiation The difference in authority and responsibility

in the organizational hierarchy

Spatial differentiation Geographic dispersion of an organization’s offices,

plants and personnel

Integration

Horizontal differentiation • Liaison roles • Task forces • Integrator positions • Teams

Vertical integration • Hierarchical referral • Rules and procedures • Plans and schedules • Positions added to the organization structure • Management information systems

Structural  Op(ons  

•  Func(onal  •  Product  •  Divisional  •  Amorphous  etc..  

The  Five  Phases  of  Growth  

Organiza(onal  Design  Principles  

Identifying Key Activities

Allocating Activities to

Units

Organization

Environment Enacted Environment

Response

Ensuring Cross-Unit

Coordination

Ensure that Allocation and Coordination

Works

FIT

Grouping Linking Aligning

•  boundaries of subunits around activities within the organization

•  bu i ld ing in fo rma t ion f lows be tween interdependent units within the organization, and with key external organizations

•  ensuring that subunits and people have the resources and motivation to carry out the activities assigned them in linking and grouping

Grouping

Linking

Aligning

Common Grouping Options – Self Contained Organizational Designs (Era 1)

Options: •  Function (Activity) •  Business Unit (Product or technology) •  Customer (Market, geography, or segment) Hybrid Structures: •  Matrix •  Front end/Back end (Customer interface/R&D,

Manufacturing…Support Staffs)

Common Grouping Options –Eras 2 & 3  

•  Era 2 -­‐  Horizontal Organizations with Team and Process Based Emphasis

•  Era 3 – Organizational boundaries open up – Hollow organization (amorphous organization) – Modular organization – Virtual organization  

9  Tests                                                          Fit  tests    (  provide  ini;al  screening    alterna;ve    designs  ,  structure  support  towards  

organiza;on)  

                                               Good  Design  (help  to  refine  company  design,  

balancing    empowerment  &  Control)  Helps  to  establish  hierarchy,  helps  to  

design  work  smoothly  

The  market  advantage  test   The  specialist  culture  test  

The  paren(ng  advantage  test   The  difficult  link  tests  

The  peoples  test   The  redundant    hierarchy  test  

The  feasibility  test   The  accountability  test  

The  flexibility  test  

35

Organizational Culture

What is Culture?

a pattern of basic assumptions that are considered valid and that are taught to new members as the way to perceive, think, and feel in the organization

36

37

Vacuous Cultures

Strong Cultures

Warring Factions Weak Cultures Level  of  A

greemen

t  

Low   High  

Four-­‐Culture  Typology  High  

Low  

Level  of  Intensity  

38

How Organizational Cultures Form

Top management

Philosophy of

organization’s founders

Selection criteria

Socialization

Organizational culture

How employees Learn Culture •  Personal Enactment •  Ceremonies and Rites •  Stories

–  About the boss –  About getting fired –  About relocating –  About promotions –  About crisis situations –  About status considerations

•  Rituals •  Symbols

Learning  Organiza(ons  

The Nature of Organizational Learning (cont.)

•  Types of organizational learning –  Exploration: organizational members

search for and experiment with new kinds or forms of organizational activities and procedures •  Demonstration projects – knowing why

–  Exploitation: organizational members learn ways to refine and improve existing organizational activities and procedures •  Small experiments – knowing how

41

Levels of Organizational Learning

42

Knowledge Management

•  Knowledge management: a type of IT-enabled organizational relationship that has important implications for both organizational learning and decision making

–  Involves sharing and integrating of expertise within and between functions and divisions through real-time, interconnected IT

43

Knowledge Management (cont.)

•  Codification approach: knowledge is carefully collected, analyzed, and stored in databases where it can be retrieved easily by users who input organization-specific commands and keywords

–  Suitable for standardized product or service

•  Personalization approach: IT designed to identify who in the organization might possess the information required for a custom job

–  More reliance on know-how, insight, and judgment to make decisions

44

45  

 Organiza(onal  Change  

Types  of  Changes  

•  Planned  Vs  Unplanned  

•  Incremental/  Evolu(onary  Vs  Radical/  Revolu(onary  

•  Individual/Group/  Organiza(onal  Change  

46  

Types of Change in Organizations

•  Evolutionary change: change that is gradual, incremental, and narrowly focused

•  Revolutionary change: change that is sudden, drastic, and broadly focused

47

48

Levin's Three-Step Change Process

49  

Lewin’s Change Model

  Changing •  Provides new information, new behavioral models, or new ways

of looking at things •  Helps employees learn new concepts or points of view •  Role models, mentors, experts, benchmarking results, and

training are useful mechanisms to facilitate change

  Refreezing •  Helps employees integrate the changed behavior or

attitude into their normal way of doing things •  Positive reinforcement is used to reinforce the desired change •  Coaching and modeling help reinforce the stability of

change

•  Unfreezing  •  Creates the motivation to change •  Encourages the replacement of old behaviors and attitudes with

those desired by management •  Entails devising ways to reduce barriers to change •  Creates psychological safety

Unfreezing  

•  Two  forces  – Driving  forces  – Restraining  forces  

•  Push  for  status  quo  

50  

Freezing  –  Ins(tu(onalize  Change  

• Turn  students  into  teachers  • Build  human  capital  •  Iden(fy  metrics,  measures,  and  milestones    

52  

Kotter’s Eight Steps for Leading Organizational Change

Create and implement a communication strategy that consistently communicates the new vision and strategic plan

4)   Communicate the change-vision

Create a vision and strategic plan to guide the change process

3)   Develop a vision and strategy

Create a cross-functional, cross-level group of people with enough power to lead the change

2)   Create the guiding coalition

Unfreeze the organization by creating a compelling reason for why change is needed

1)   Establish a sense of urgency

Description Step

53  

Kotter’s Eight Steps for Leading Organizational Change

Reinforce the changes by highlighting connections between new behaviors and processes and organizational success

8)   Anchor new approaches in the culture

The guiding coalition uses credibility from short-term wins to create change. Additional people are brought into the change process as change cascades throughout the organization

7)   Consolidate gains and produce more change

Plan for and create short-term “wins” or improvements

6)   Generate short-term wins

Eliminate barriers to change, use target elements of change to transform the organization

5)   Empower broad-based action

Description Step

Dealing  with    Resistance  to  Change  

•  Communica(on  – details  –  ra(onale  

•  Par(cipa(on  in  the  process  – ownership  – commitment  

•  Empathy  and  support  

Characteris(cs  of  a  Change  Manager  •  Are  accepted  by  others  as  trustworthy  and  competent  

•  Can  mo(vate  others  to  achieve  the  change  vision,  able  to  align  and  engage  

•  Have  a  big-­‐picture  perspec(ve  •  Have  a  clear,  compelling  vision  of  the  change  they  want,  Can  ar(culate  it  

•  Can  iden(fy  other  change  agents    •  Able  to  eliminate  barriers  that  interfere  with  the  change  ini(a(ve  

55