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Organisational and behavioral psychology
This document summarizes key topics from a lecture on organization, including organization structure, design elements, and change management. It discusses types of organizational structure like functional and divisional structures. It also covers concepts like work specialization, span of control, and centralization versus decentralization. Change management theories by Lewin are summarized, including the three steps of change: unfreezing, moving, and refreezing. Finally, it briefly touches on organizational culture and issues in management.
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Organisational and behavioral psychology
- 2. Lecture on organization By: kanchi.Madhavi M.sc. Psychology Msc. nursing M.phil psychology, Department of psychology, College of social sciences and humanities, Adigrat university.
- 3. Life is amixture of sunshine and rain, Laughter and teardrops, pLeasure and pain, Low tides and high tides, mountains and pLains, triumphs and defeats, Losses and gains. poems of faith from heLen steiner rice Life is a mixture of sunshine and rain, Laughter and teardrops, pLeasure and pain, Low tides and high tides, mountains and pLains, triumphs and defeats, Losses and gains. poems of faith from heLen steiner rice
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- 6. The framework for dividing, assigning,and coordinating work Developments in or changes to the structure of an organization Organization Structure Organization Design
- 7. Key Elements of OrganizationStructure DepartmentalizationSpan of Control Work Specialization Chain of Command Authority and Responsibility Centralization vs. Decentralization
- 8. Work Specialization HighLow LowHighProductivity WorkSpecialization • Job is broken down into a number of steps • Each step is completed by a separate individual • Makes efficient use of the diversity of skills that workers have
- 9. The Chain ofCommand District A District B District C District D District E District F District G Region 1 Region 2 Region 3 Region 4 Region 5 Vice President Vice President Vice President Vice President Vice President Chief Executive Officer Executive Vice President Executive Vice President President
- 10. Span of Control •Number of employees that an manager can manage effectively • Increased over the last several years • Contingency variables impact number
- 11. Authority vs. Responsibility •Rights inherent in managerial position to give orders and expect them to be followed • Related to one’s position--not the characteristics of person • Obligation to perform • Goes hand-in-hand with authority
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- 13. Line Authority • Levelof authority that entitles manager to direct the work of an employee • Contributes directly to the achievement of organizational objectives
- 14. Finance Accounting Marketing Human Resources Research and DevelopmentProduction The ConceptTheConcept of Powerof Power Function Authority Level The Power Core
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- 16. The Degree ofCentralization Higher EmployeeEmpowerment Centralization DecentralizationDecentralization HigherLower TopManagementControl Lower
- 17. Five ways todepartmentalize Functional Geographic Product Customer Process
- 18. Contingency Variables Affecting Structure MECHANISTIC •Rigid hierarchical relationships • Fixed duties • Formal communication channels • Centralized authority ORGANIC • Collaboration (both vertical and horizontal) • Adaptable duties • Information communication • Decentralized authorized
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- 21. Environmental uncertainty andthe performance of vertical and horizontal designs.
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- 24. Allocation of Specialists Clear Accountability Dual Chain ofCommand The Matrix Structure Cross-Functional Coordination
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- 26. The Team-Based Structure Hold Teams Accountable forResults of Work Empower Employees to Make Decisions
- 27. Boundaryless Organization • Globalizationof markets and competitors • Rapidly changing technology • Need for rapid innovation
- 28. The Learning Organization OrganizationalDesign •Boundaryless •Teams •Empowerment Leadership •Shared vision •Collaboration Information Sharing •Open •Timely •Accurate Organizational Culture •Strong mutual relationships •Sense of community •Caring •Trust LEARNING ORGANIZATION Source: Management, Seventh Canadian Edition, by Stephen P. Robbins, Mary Coulter, and Robin Stuart-Kotze, page 231. Copyright © 2003. Reprinted by permission of Pearson Education Canada Inc.
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- 31. What is Culture? •Personality of the organization. • Comprised of the assumptions, values, norms and tangible signs of organization members and their behaviors. • Difficult to express distinctly, but everyone knows it when they sense it • Particularly important when attempting to manage organization-wide change
- 32. 11/16/14 32 Importance Organizational changefailure is credited to lack of understanding about the strong role of culture and the role it plays in organizations. That's one of the reasons that many strategic planners now place as much emphasis on identifying strategic values as they do mission and vision.
- 33. 11/16/14 33 Types ofCulture There are different types of culture just like there are different types of personality • Academy Culture (highly skilled and tend to stay in the organization) Eg :universities, hospitals, large corporations, etc • Baseball Team Culture (Employees are "free agents" who have highly prized skills,high demands)Eg : Investment banking, advertising, etc.
- 34. 11/16/14 34 Types ofculture • Club Culture (Requirement for employees in this culture is to fit into the group)Eg : Military, some law firms, etc • Fortress Culture (Employees don't know if they'll be laid off or not. These organizations often undergo massive reorganization) Eg : savings and loans, large car companies, etc.
- 35. Dimensions of Organizational Culture •Member identity • Group emphasis • People focus • Unit integration • Control • Risk tolerance • Reward • Conflict tolerance • Means-end orientation • Open-systems focus
- 36. Cultural Affects onManagers • Constrains what managers can and cannot do • Constraints are rarely explicit • Culture has a link between values and managerial behaviour--what is acceptable and not
- 37. Strong vs. WeakCultures • Predictability • Orderliness • Consistency • Internal guidelines
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- 39. CHANGE • CHANGE MEANSTHE ALTERATIONS OF STATUS QUO OR MAKING THINGS DIFFERENT. • IT MAY REFERS TO ANY ALTERATIONS WHICH OCCURS IN THE OVERALL WORK ENVIRONMENT OF AN ORGANISATION
- 40. STIMULATING FORCES FOR CHANGE •IN TECHNOLOGY USED • IN CUSTOMER EXPECTATIONS AND TASTES • AS A RESULT OF COMPETITION • AS A RESULT OF GOVERNMENT LEGISLATION • ALTERATIONS IN ECONOMY • IN COMMUNICATION MEDIA AND SOCIETYS VALUE SYSTEM • SUPPLY AND DISTRIBUTION CHAIN
- 41. PLANNED CHANGE • HUMANRESOURCES • FUNCTIONAL RESUOURCES • TECHNOLOGICAL CAPABILITIES • ORGANIZATIONAL CAPABILITIES
- 42. UNPLANNED CHANGE • CHANGINGEMPLOYEE DEMOGRAPHICS • PERFORMANCE GAPS • GOVERNMENT REGULATIONS • ECONOMIC COMPETITION IN THE GLOBAL ARENA
- 43. LEWINS FORCE FIELD THEORYOF CHANGE Resistance to change Resistance to change Force for change Force for change Time C h a n g e X Y LevelofPerformance M o v e m e n t
- 44. 11/16/14 44 Lewin’s Three-StepChange Model RefreezingMovingUnfreezing
- 45. 11/16/14 45 Implementing Change •Unfreezing: getting ready for change • Moving: making the change • Refreezing: stabilizing the change
- 46. 11/16/14 46 Unfreezing • Arousedissatisfaction with the current state • Activate and strengthen top management support • Use participation in decision making • Build in rewards
- 47. 11/16/14 47 Moving • Establishgoals • Institute smaller, acceptable changes that reinforce and support change • Develop management structures for change • Maintain open, two-way communication
- 48. 11/16/14 48 Refreezing • Buildsuccess experiences • Reward desired behaviour • Develop structures to institutionalize the change • Make change work
- 49. 11/16/14 49 Overcoming Resistanceto Change • Education and communication • Participation and involvement • Facilitation and support • Negotiation and agreement
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- 54. WORK STRESS JOB DISSATISFACTION CONFLICTS CHANGINGOF JOBS ANXIETY PSYCHOLOGICAL DISTURBANCES….. …………………. …………………..
- 55. 11/16/14 55 Employee behavioral patternstudy PERIOD EMPLOYEE BEHAVIOR Day 1 Denial, fear, no improvement After a month Sadness, slight improvement After a Year Acceptance, significant improvement After 2 Years Relief, liking, enjoyment, business development activities
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Editor's Notes
- #7 At the beginning of this course, we spoke about the 4 key management activities. One of those activities was “organizing.” We will now look at what occurs in this activity. The structure of the organization is the framework or skeleton for dividing, assigning and coordinating work. Whenever managers develop or change the structure, it is called “organization design.”
- #8 We will be examining in depth these six elements of structure: work specialization, chain of command, Span of control, authority and responsibility, centralization vs. decentralization, and departmentalization.
- #9 The first component is the division of labour, or work specialization. It describes the degree to which tasks are subdivided into separate jobs. An entire job is not done by one person. Individuals specialize in doing part of an activity rather than the entire activity. Work specialization makes efficient use of the broad skills that workers have. Early advocates believed that work specialization could lead to indefinitely increasing productivity. Since specialization was not widely practiced at the turn of the twentieth century, their belief was reasonable. By the late 1940s, work specialization enabled manufacturing firms to make the most effective use of their employees’ skills. So, managers believed that this could go on indefinitely. However, as you can see in this slide, by the 1960s, the human diseconomies resulting from work specialization began to offset the economic advantages. Managers today understand that while division of labour is appropriate for some jobs, productivity in other jobs can be increased through enlarging, not narrowing, the scope of job activities.
- #10 The next component is the chain of command--the principle that no person should report to more than one boss. As you can see in this example, one individual only reports to another individual.
- #11 The span of control refers to the number of employees a manager can effectively and efficiently manage. In the early studies of management, it was felt that smaller spans were better--usually 6 employees. This has now changed so that it is quite typical to find a manager responsible for 10-12 employees. The span of control now is greatly influence by contingency variables such as the training and experience employees have, complexity of tasks, physical proximity of manager and employees, the culture of the organization, and the preferred managing style of the manager.
- #12 Another component of organizational design are the concepts of authority and responsibility. Authority refers to the inherent rights managers have in giving direction and orders and expecting those orders to be followed. It is important to note that the concept of authority is related to the position and not the person. When a person has been delegated authority, the person also has the responsibility--or obligation to perform the tasks or assignments. These concepts become quite important when a manager wants to empower employees. Remember empowerment from preceding chapters? Empowerment is the delegation of decision-making (authority) over some work process. However, for this to work effectively, employees need to be responsible for the success of the process. And for empowerment to truly work, a person needs to have both responsibility and authority--it isn’t appropriate to hold someone accountable for something that they have no authority over.
- #13 Here is a diagram of authority. This is a more detailed example linking the chain of command with authority. In this example, the CEO has authority over the departments of finance, accounting, marketing and so forth.
- #14 There are different types of authority relationships. Line authority refers to the authority that a manager has over other employees. It extends from the top of the organization to the bottom. Let’s go back to the last slide which shows the chain of command. The CEO (Chief Executive Officer) has authority over the various departments listed.
- #15 However, authority does not adequately explain the influence that some people have on the operations in an organization. In today’s business environment, power is a much larger concept than authority. While authority is a positional right, power refers to the individual’s capacity to influence outcomes in the organization. Let’s revisit the slide showing chain of command and authority. The CEO has legitimate authority and power over marketing, production, and human resources. It is the horizontal dimension as shown on the right slide of the slide. The higher one is in the organization, the more authority the person has. Power is a three-dimensional concept that includes centrality or one’s distance from the centre core of power. The cone analogy above acknowledges two facts: (1) the higher one moves in an organization, the closer the person is to the power core; and (2) even those without authority can wield power because one can move horizontally inward toward the power core without moving up. The next slide will examine where power comes from.
- #16 There are 5 sources of power: Coercive power which is based on fear. For example, a manager who intimidates employees. Reward power which is based on the ability to distribute something that others value. For example, a manager is using reward power when making decisions about increases in pay. Legitimate power which is based on one’s position in the formal hierarchy. This is the most closely aligned power concept to authority. Expert power which is based on one’s expertise, special skill, or knowledge. For example, a person in the research department may have incredible influence over the CEO because the researcher has very specialized skills in the biotechnology field. Referent power which is based on identifying with a person who has desirable resources or personal traits. For example, a person who can explain the feelings of employees to a senior manager.
- #17 The term centralization refers to how much decision-making authority is pushed down to lower levels in the organization. It is not an either-or concept, but is a matter of degree. Traditional organizations were structured in a pyramid, with power and authority centralized at the top.Today’s organizations, on the other hand, are more complex and need to be able to respond to the dynamic changes in their environments. To do this, managers believe that decisions need to be made closed to the problems. As a consequence, managers will make decisions about the best amount of decentralization to achieve organizational goals. Recall our discussion earlier about empowerment. For this to work, decision-making must be decentralized.
- #18 Traditionally, work activities have been specialized and grouped into departments. Those specialists are under the direction of a manager. There are several ways in which these activities can be grouped. Activities can be grouped according to function to pursue economies of scale by placing employees with shared skills and knowledge into work-groups. These are referred to as functional departments. Examples would be engineering, accounting, human resources, and marketing. Tasks can also be grouped according to a specific product, thus placing all activities related to the product under one manager. This is called product departmentalization. Exhibit 5-6 in your text on page 126 shows an example of this. Jobs may be grouped according to the type of customer served by the organization. For example, in an organization like Staples or Grand and Toy, it could break the departments into those that serve retail customers, home-based business customers, or government customers. If an organization’s customers are geographically dispersed, it can group jobs based on geography. For example, Coca-Cola has two broad geographic areas--the North American sector and the international sector. Lastly, an organization can departmentalize based on the basis of work flow or customer flow. This is referred to as process departmentalization. While large organizations tend to still be organizational around functional, product or geographic, the trend is to reduce rigid departmentalization and use teams that cross traditional departmental lines. What is important to remember is that there is no single structure that will fit all situations.
- #19 Structure in the contemporary business environment will depend on a number of contingency variables. Above are two forms. Another name for a mechanistic organization is a bureaucracy because there is a high degree of specialization, centralization with authority and responsibility concentrated at the top of the organization. The span of control is small at the top creating tall and impersonal structures. There is also lots of distance between top management and the front-line employees. This is in contrast to the organic organization which is loose and flexible without rigid job duties or division of labour. This structure is low in centralization so that problems can be responded to quickly. We’ll now turn to the variables that need to be considered when deciding to have the structure more mechanistic or more organic.
- #21 There are four factors that impact on the design of an organization. Since the structure is designed to achieve objectives, and because these objectives flow from the overall strategy, it makes sense that structure and strategy are closely linked. If a company has developed a strategy to compete more aggressively on a world market, then it will need to be more flexible to respond to various external factors. The larger an organization is, the more bureaucratic it tends to become. There is more division of labour, rules and regulations. Generally speaking, the more routine the technology is within the productive capacity of the firm, the more standard and simple is the structure. The last element to consider is the degree of environmental uncertainty facing the organization. Simply put, the more uncertain the environment, the more flexible and adaptable the structure needs to be to respond effectively. We’ll now look at a number of specific organizational designs that incorporate the various elements we have been discussing.
- #23 Many organizations start out as entrepreneurial ventures where the owner makes more of the decisions as all the employees report to the owner. This is referred to as a simple structure where there are wide spans of control and the decision-making is centralized. As size increases, decision making becomes slower and can come to a halt as the single executive tries to make all the decisions. If the firm doesn’t change the structure at this point, it may fail. One of the problems with family-run organizations is that much of the power and decision-making is centralized and continues to be so even when the organization becomes large and may need additional division of authority and power.
- #24 As mentioned earlier, when the organization gets larger, it tends to move toward a bureaucratic structure. Within this overall structure, the organizational can create a functional structure, similar to what we saw in slide 10 or by divisions--self-contained units. With a divisional structure, the division manager is responsible for performance but may be supported by a central headquarters that provides support services such as finance and purchasing.
- #25 A newer type of structure combines the advantages of both functional and divisional--a matrix structure. It has the advantages of specialization with a greater focus on results. In a matrix structure, specialists from functional areas comes together to work on a project. The next slide slows an example of an aerospace firm with such a structure.
- #26 As you can see, staff from the departments of design engineering, manufacturing and human resources are working together on projects while being part of a functional department. In the matrix structure, employees will have two bosses--the project manager and their own functional manager. The strength of this type of structure is that it can facilitate coordination of a multiple set of complex and interdependent projects while still retaining some of the benefits from having specialty areas working together.
- #27 A newer form of organizational structure is team-based, where the entire organization is composed of teams. For this to work effectively, employees must be empowered to make decisions and senior management needs to hold the teams accountable for results. For example, at a US office of Sun Life Canada, customer representatives have been reorganized into eight-person teams trained to expedite all customer requests.
- #28 A boundaryless organization is not limited by boundaries imposed by traditional structures. This type of structure can also be called a network organization, learning organization, barrier-free, modular, or virtual organization. In these types of structures, employees are grouped to accomplish some core competency--the area of competitive advantage or competitive strength. These organizations have arisen due to the increased globalization of the marketplace, the increasingly rapid change in technology, and the need to innovate as quickly as possible to remain competitive. As the E-Business and Management describes, Amazon.com has a virtual organization.
- #29 A great deal of business literature has focused on the learning organization. Let’s look at some of the specific components of this as an example of a boundaryless organization. You will note that it is team-based and the employees are empowered. The culture of the organization has strong relationships and strong leadership and very open in its information sharing. A learning organization can be merely a particular business unit. For example, Caterpillar International has created a “Cat Learning Systems” which is being used by one of its largest dealerships, Finning International. The system enables dealers to learn about changes in the service and equipment. But what do we mean by organizational culture?
- #36 Your text describes 10 characteristics of organizational culture. These are: Member identity--the degree to which employees identify with the organization as a whole Group emphasis--the degree to which work activities are organized around groups. People--does management think about the effect on people within the organization? Unit integration--the degree to which units operate in a coordinated and interdependent fashion. Control--the degree to which rules and regulations control employee behaviour. Risk tolerance--the degree to which employees are encouraged to be innovative and risk-seeking. Reward--the degree to which rewards such as salary increases and promotions are based on employee performance compared to non-performance factors such as seniority. Conflict tolerance--the degree to which the organization encourages employees to openly air conflicts and criticisms. Means-end orientation--the degree to which the organization focuses on results rather than the techniques or processes to achieve results. Open-systems focus--the degree to which the organization monitors and responds to changes in the external environment.
- #37 Organizational culture is particularly relevant to managers. It constrains what managers can and cannot do--and is rare explicit. The constraints are not written down nor are they spoken. Managers quickly learn what to do and not to do. For instance, some examples of culture from real organizations: Look busy even if you’re not If you take risks and fail around here, you’ll pay dearly for it If you want to get to the top, you have to be a team player
- #38 But what affect does culture have on the structure? The stronger the organizational culture, the less need there is for formal rules and regulations. Employees have internalized what is expected of them and they behave accordingly. Stronger cultures create predictability, orderliness and consistency. For example, Barclay PLC, a large British bank, is characterized as formal, cold, and risk-averse. These dominant values create behavioural consistency for managers.
- #46 Material pertinent to this discussion is found on pages 338-340.
- #47 Material pertinent to this discussion is found on pages 339-340.
- #48 Material pertinent to this discussion is found on pages 339-340.
- #50 Material pertinent to this discussion is found on pages 353-354.