2023_PHRi_Workbook_Module_2_preview.docx

| www.ihrci.org Part One: HR and Organization Organization A business organization is an individual or group of people that collaborate to achieve certain commercial goals. Some business organizations are formed to earn income for owners. Other business organizations, called nonprofits (Non-profi...

| www.ihrci.org Part One: HR and Organization Organization A business organization is an individual or group of people that collaborate to achieve certain commercial goals. Some business organizations are formed to earn income for owners. Other business organizations, called nonprofits (Non-profit Organization, NPO), are formed for public purposes. These businesses often raise money and utilize other resources to provide or support public programs. Structure is not simply an organization chart. Structure is all the people, positions, procedures, processes, culture, technology and related elements that comprise the organization. It defines how all the pieces, parts and processes work together (or don’t in some cases). This structure must be totally aligned with strategy for the organization to achieve its mission and goals. Structure supports strategy. If an organization changes its strategy, it must change its structure to support the new strategy. When it doesn’t, the structure acts like a bungee cord and pulls the organization back to its old strategy. Strategy follows structure. What the organization does defines the strategy. Changing strategy means changing what everyone in the organization does. When an organization changes its structure and not its strategy, the strategy will change to fit the new structure. Strategy follows structure. Suddenly management realizes the organization’s strategy has shifted in an undesirable way. It appears to have done it on its own. In reality, an organization’s structure is a powerful force. You can’t direct it to do something for any length of time unless the structure is capable of supporting that strategy. Global organizations in the 21st century must compete with a much wider array of companies than their domestic counterparts do, and have therefore evolved several strategies to become as efficient and cost-effective as possible. The choice of organizational structure reflects where decisions are made, how work gets completed, and ultimately how quickly and cheaply the firm’s products can be made. Organizational structure determines how the roles, power and responsibilities are assigned, controlled, and coordinated, and how information flows between the different levels of management. Span of Control Span of control (span of management or span of authority) is an upper limit to the number of subordinates who can be effectively supervised by one person. Beyond a certain number of subordinates, the effectiveness and efficiency of supervision decreases. Flat organizational structures have relatively few levels from top to bottom. Thus, they have wide spans of control. Flat structures provide fast information flow from top to bottom of the organization and increased employee satisfaction. Tall organizational structures have many levels between top and bottom. Hence, they have relatively narrow spans of control. Tall structures are faster and more effective at problem resolution than flat structures because of increased frequency of interaction between superior and subordinate and the greater order imposed by the hierarchical structure. Chain of Command The delegation of authority creates a chain of command, the formal channel that defines the lines of authority from the top to the bottom of an organization. Chain of command specifies a clear reporting relationship for each person in the organization and should be followed in both downward and upward communication. Centralization is the retention of decision-making authority by a high-level manager. Centralization concerns the concentration of authority in an organization and the degree and levels at which it occurs. Decentralization is the process of distributing authority throughout an organization. In a decentralized organization, an organization member has the right to make a decision without obtaining approval from a higher- level manager. Decentralization in the same way as delegation, that is, as a good way to improve motivation and morale of lower-level employees. Neither centralization nor decentralization is good or bad in itself. The degree to which either is stressed depends upon the requirements of a given situation. Decisions cannot be decentralized to those who do not have necessary information, e.g., knowledge of job objectives or measures for evaluation of job performance. Decisions cannot be decentralized to people who do not have the training, experience, knowledge, or ability to make them. Decisions requiring a quick response should be decentralized to those near the action. Decentralization should not occur below the organizational level at which coordination must be maintained (e.g., each supervisor on an assembly line cannot be allowed to decide the reporting time for employees). Decisions that are of critical importance to the survival of the organization should not be decentralized. Decentralization has a positive influence on morale. Bureaucracy Bureaucracy is a term applied by German sociologist Max Weber (writing in the 1900s) to a type of organizational hierarchy characterized by clear rules, sharply defined lines of authority, and a high degree of specialization. It represents authority and responsibility within the organization. Authority is the right or power assigned to a job holder in order to achieve certain organizational objectives. It indicates the right and power of making decisions, giving orders and instructions to subordinates. Authority is delegated from above but must be accepted from below i.e. by the subordinates. Responsibility indicates the duty assigned to a position. The person holding the position has to perform the duty assigned. It is his responsibility. The term responsibility is often referred to as an obligation to perform a particular task assigned to a subordinate. In an organization, responsibility is the duty as per the guidelines issued. Accountability is the liability created for the use of authority. Accountability is the obligation of an individual to report formally to his superior about the work he has done to discharge the responsibility. Responsibility may be bestowed, but accountability must be taken. In other words, responsibility can be given or received, even assumed, but that doesn’t automatically guarantee that personal accountability will be taken. Which means that it’s possible to bear responsibility for something or someone but still lack accountability. Type of Structures Developing an organizational structure involves defining the framework around which the business operates and provides guidance to all employees by laying out the official reporting relationships that govern the workflow of the company. It is therefore important for every organization to have a well-structured organization chart indicative of how an organization functions, how it is managed, how information flows and is processed within an organization, and how flexible or responsive the organization is. Functional Structure Functional structure is set up so that each portion of the organization is grouped according to its purpose. In this type of organization, for example, there may be a marketing department, a sales department and a production department. The functional structure works very well for small businesses in which each department can rely on the talent and knowledge of its workers and support itself. However, one of the drawbacks to a functional structure is that the coordination and communication between departments can be restricted by the organizational boundaries of having the various departments working separately. Divisional Structure Divisional structure typically is used in larger companies that operate in a wide geographic area or that have separate smaller organizations within the umbrella group to cover different types of products or market areas. For example, the now-defunct Tecumseh Products Company was organized divisionally--with a small engine division, a compressor division, a parts division and divisions for each geographic area to handle specific needs. The benefit of this structure is that needs can be met more rapidly and more specifically; however, communication is inhibited because employees in different divisions are not working together. Divisional structure is costly because of its size and scope. Small businesses can use a divisional structure on a smaller scale, having different offices in different parts of the city, for example, or assigning different sales teams to handle different geographic areas. Process Structure The process structure divides up the organization around processes, such as research, manufacturing and sales. Unlike a purely functional structure, a process-based organization considers how the different processes relate to each other and the customer. The sales process doesn't begin until the manufacturing process produces something to sell; manufacturing, in turn, waits on research and development to create the product. Process-based structures are geared to satisfying the customer -- the end result of all the processes -- but they only work if managers understand how the different processes interact. Matrix Structure The third main type of organizational structure, called the matrix structure, is a hybrid of divisional and functional structure. Typically used in large multinational companies, the matrix structure allows for the benefits of functional and divisional structures to exist in one organization. This can create power struggles because most areas of the company will have a dual management--a functional manager and a product or divisional manager working at the same level and covering some of the same managerial territory. A matrix structure is a blend of functional and project based organizations that maximize the strength of each structure. There are three types of matrix organizations: weak, strong and balanced. Weak organizations are characterized by projects that have part-time members, limited control over authority, budget and decisions and multiple lines of responsibility. Strong matrices have dedicated resources, internal control of budget, and moderate levels of control over assets, resources and decision making authority. Balanced matrix organizations represent shared leadership between functional managers and project managers. In this structure, decision making is decentralized and an employee participating in a project may have two bosses: one from the product side and one from the geographic side. The matrix structure requires a great deal of communication and coordination among managers because lines of authority are not always clear. Organizational Charts An organizational chart is the most common visual depiction of how an organization is structured. It outlines the roles, responsibilities and relationships between individuals within an organization. An organizational chart can be used to depict the structure of an organization as a whole, or broken down by department or unit. Organizational charts can be used to represent the organizational structure diagram showing reporting relationships a graphic representation of how authority and responsibility is distributed within a company; includes all work processes of the company. Levels of Management In organizations, there are generally three different levels of managers: first-level managers, middle-level managers, and top-level managers. These levels of managers are classified in a hierarchy of importance and authority, and are also arranged by the different types of management tasks that each role does. In many organizations, the number of managers in every level resembles a pyramid, in which the first-level has many more managers than middle-level and top-level managers, respectively. Each management level is explained below in specifications of their different responsibilities and likely job titles. Top-level managers Typically consist of board of directors, president, vice-president, chief executive officers, etc. These individuals are mainly responsible for controlling and overseeing all the departments in the organization. They develop goals, strategic plans, and policies for the company, as well as make many decisions on the direction of the business. In addition, top-level managers play a significant role in the mobilization of outside resources and are for the most part responsible for the shareholders and general public. Middle-level managers These personnel typically consist of general managers, branch managers, department managers. These individuals are mainly responsible to the top management for the functioning of their department. They devote more time to organizational and directional functions. Their roles can be emphasized as executing plans of the organization in conformance with the company's policies and the objectives of the top management, they define and discuss information and policies from top management to lower management, and most importantly they inspire and provide guidance to lower level managers towards better performance. Some of their functions are as follows: Designing and implementing effective group and intergroup work and information systems. Defining and monitoring group-level performance indicators. Diagnosing and resolving problems within and among work groups. Designing and implementing reward systems that support cooperative behaviors. First-level managers Typically consist of supervisors, section officers, foreman, etc. These individuals focus more on the controlling and direction of management functions. For instance, they assign tasks and jobs to employees, guide and supervise employees on day-to-day activities, look after the quantity and quality of the production of the company, make recommendations, suggestions, and communicate employee problems to the higher level above, etc. In this level, managers are the "image builders" of the company considering they are the only ones who have direct contact with employees. Basic supervision Motivation Career planning Performance feedback Group Dynamic In organizations, most work is done within groups. A group can be defined as several individuals who come together to accomplish a particular task or goal. In organizations, you may encounter different types of groups. Informal work groups are made up of two or more individuals who are associated with one another in ways not prescribed by the formal organization. For example, a few people in the company who get together to play tennis on the weekend would be considered an informal group. A formal work group is made up of managers, subordinates, or both with close associations among group members that influence the behavior of individuals in the group. Forming a group takes time, and members often go through recognizable stages as they change from being collections of strangers to united groups with common goals. American organizational psychologist Bruce Tuckman first came up with the memorable phrase "forming, storming, norming, and performing" in his 1965 article, "Developmental Sequence in Small Groups." He used it to describe the path that most groups follow on their way to high performance. Later, he added a fifth stage, "adjourning" (which is sometimes known as "mourning"). Source: mindtools.com Forming In this stage, most group members are positive and polite. Some are anxious, as they haven't fully understood what work the team will do. Others are simply excited about the task ahead. As leader, you play a dominant role at this stage, because group members' roles and responsibilities aren't clear. This stage can last for some time, as people start to work together, and as they make an effort to get to know their new colleagues. Storming Next, the group moves into the storming phase, where people start to push against the boundaries established in the forming stage. This is the stage where many groups fail. Storming often starts where there is a conflict between team members' natural working styles. People may work in different ways for all sorts of reasons, but if differing working styles cause unforeseen problems, they may become frustrated. Storming can also happen in other situations. For example, group members may challenge your authority, or jockey for position as their roles are clarified. Or, if you haven't defined clearly how the group will work, people may feel overwhelmed by their workload, or they could be uncomfortable with the approach you're using. Some may question the worth of the group's goal, and they may resist taking on tasks. Group members who stick with the task at hand may experience stress, particularly as they don't have the support of established processes, or strong relationships with their colleagues. Norming Gradually, the group moves into the norming stage. This is when people start to resolve their differences, appreciate colleagues' strengths, and respect your authority as a leader. Now that the group members know one-another better, they may socialize together, and they are able to ask each other for help and provide constructive feedback. People develop a stronger commitment to the team goal, and you start to see good progress towards it. There is often a prolonged overlap between storming and norming, because, as new tasks come up, the group may lapse back into behavior from the storming stage. Performing The group reaches the performing stage when hard work leads, without friction, to the achievement of the team's goal. The structures and processes that you have set up support this well. As leader, you can delegate much of your work, and you can concentrate on developing team members. It feels easy to be part of the group at this stage, and people who join or leave won't disrupt performance. Adjourning Many groups will reach this stage eventually. For example, project teams exist for only a fixed period, and even permanent teams may be disbanded through organizational restructuring. Team members who like routine, or who have developed close working relationships with other team members, may find this stage difficult, particularly if their future now looks uncertain. As a team leader, your aim is to help your people perform well, as quickly as possible. To do this, you'll need to change your approach at each stage. Group vs. Team The words 'group' and 'team' are, for the most part, interchangeable - at least most people use them that way. While all teams are groups of individuals, not all groups are teams. The key properties of a true team include collaborative action in which, along with a common goal, teams have collaborative tasks. Conversely, in a group, individuals are responsible only for their own area. The use of teams began to increase because advances in technology have resulted in more complex systems that require contributions from multiple people across the organization. Overall, team-based organizations have more motivation and involvement, and teams can often accomplish more than individuals. Groups differ from teams in several ways: Task orientation Teams require coordination of tasks and activities to achieve a shared aim. Groups do not need to focus on specific outcomes or a common purpose. Degree of interdependence Team members are interdependent since they bring to bear a set of resources to produce a common outcome. Individuals in a group can be entirely disconnected from one another and not rely on fellow members at all. Purpose Teams are formed for a particular reason and can be short- or long-lived. Groups can exist as a matter of fact; for example, a group can be comprised of people of the same race or ethnic background. Degree of formal structure Team members' individual roles and duties are specified and their ways of working together are defined. Groups are generally much more informal; roles do not need to be assigned and norms of behavior do not need to develop. Familiarity among members Team members are aware of the set of people they collaborate with, since they interact to complete tasks and activities. Members of a group may have personal relationships or they may have little knowledge of each other and no interactions whatsoever. There are several types of temporary teams. An example of a temporary team is a task force that is asked to address a specific issue or problem until it is resolved. Other team may be temporary or ongoing, such as product development teams. In addition, matrix organizations have cross-functional teams in which individuals from different parts of the organization staff the team, which may be temporary or longstanding in nature. Virtual teams are teams in which members are not located in the same physical place. They may be in different cities, states, or even different countries. Often, virtual teams are formed to take advantage of distributed expertise or time— the needed experts may be living in different cities. Top management teams are appointed by the chief executive officer (CEO) and, ideally, reflect the skills and areas that the CEO considers vital for the company. There are no formal rules about top management team design or structure. The top team often includes representatives from functional areas, such as finance, human resources, and marketing, or key geographic areas, such as Europe, Asia, and North America. Depending on the company, other areas may be represented, such as legal counsel or the company’s chief technologist. Self-managed teams are a new form of team that rose in popularity with the Total Quality Movement in the 1980s. Self-managed teams are empowered teams. The team manages itself but it still has a team leader. Research has shown that employees in self- managed teams have higher job satisfaction, increased self-esteem, and grow more on the job. However, self-managed teams may be at a higher risk of suffering from negative outcomes due to conflict, so it is important that they are supported with training to help them deal with conflict effectively. Special forms of self-managed teams are self-directed teams. The team makes all decisions internally about leadership and how work is done. Designing an effective team means making decisions about team composition (who should be on the team), team size (the optimal number of people on the team), and team diversity (should team members be of similar background, such as all engineers, or of different backgrounds). Answering these questions will depend, to a large extent, on the type of task that the team will be performing. Teams can be charged with a variety of tasks, from problem solving to generating creative and innovative ideas to managing the daily operations of a manufacturing plant. A key consideration when forming a team is to ensure that all the team members are qualified for the roles they will fill for the team. This process often entails understanding the knowledge, skills, and abilities (KSAs) of team members as well as the personality traits needed before starting the selection process. When deciding team size, a good rule of thumb is a size of two to twenty members. Research shows that groups with more than 20 members have less cooperation. The majority of teams have 10 members or less, because the larger the team, the harder it is to coordinate and interact as a team. With fewer individuals, team members are more able to work through differences and agree on a common plan of action. They have a clearer understanding of others’ roles and greater accountability to fulfill their roles. Some tasks, however, require larger team sizes because of the need for diverse skills or because of the complexity of the task. In those cases, the best solution is to create sub-teams in which one member from each sub-team is a member of a larger coordinating team. Team composition and team diversity often go hand in hand. Teams whose members have complementary skills are often more successful, because members can see each other’s blind spots. One team member’s strengths can compensate for another’s weaknesses. Diversity in team composition can help teams come up with more creative and effective solutions. The more diverse a team is in terms of expertise, gender, age, and background, the more ability the group has to avoid the problems of groupthink. Organization Climate and Culture Culture has a pervasive impact on the management of human resources. Culture influences how blue- and white-collar workers respond to pay and non- pay incentives, how international firms are organized, the success of multinational work teams, and even how executives compose and implement business strategies. Culture may be defined as a shared system of values, beliefs, and attitudes. It affects our own actions and the way we perceive the actions of others. Type of Culture National Cultures National cultures comes a host of differences in assumptions, outlook, and rules that can challenge communication and comprehension. Subcultures There can be significant distances between subcultures within the same national culture. Subcultures may be defined by ethnicity, geographic region, race, religion, or class. Organizational/Corporate Cultures Organizational culture is defined by all of the life experiences, strengths, weaknesses, education, upbringing, and so forth of the employees. While executive leaders play a large role in defining organizational culture by their actions and leadership, all employees contribute to the organizational culture. Industry Cultures Industry cultures have shared assumptions based on technological and social histories of the industry. Professional or Functional Cultures Professional and functional cultures have shared assumptions based on specifics as they relate to a special function or occupation. Layers of Culture Level 1-Artefacts: Described as being the ‘easiest’ level to observe, called explicit culture. Level 2-Espoused Values: To better understand and to help decipher why the initial observations in Level 1 are taking place, one needs to ask ‘insiders’ of the organization to try and explain. Level 3-Shared Tacit Assumptions: To help understand this ‘deeper’ level of culture, one needs to investigate the history of an organization. Values in Culture The word "value" means worth. It also refers to an ethical precept on which we base our behavior. Values are basic convictions that people have regarding what is right and wrong, good and bad, important or unimportant. Values are shaped by the culture in which we live and by our experiences. However, there are values that are held high by most cultures. These include fairness and justice, compassion and charity, duties and rights, human species survival and human well-being. Organizational culture and values are closely related because organizations are generally founded with certain values in mind. These values tend to influence the organizational structure, but they may change over time as different people take on different roles in the organization and the overall culture changes. Organizational culture and values, then, both affect each other over time and tend to change if a conflict exists between them. Culture Analysis Three important levels of cultural analysis in organizations are: observable culture, shared values, and common assumptions. These levels may be envisioned as layers. The deeper one gets, the more difficult it is to discover the culture. Observable Culture The first level concerns observable culture, or “the way we do things around here.” These are the methods the group has developed and teaches to new members. The observable culture includes the unique stories, ceremonies, and corporate rituals that make up the history of a successful work group. Shared Values The second level of analysis recognizes that shared values can play a critical part in linking people together and can provide a powerful motivational mechanism for members of the culture. Many consultants suggest that organizations should develop a “dominant and coherent set of shared values.” The term shared in cultural analysis implies that the group is a whole. Every member may not agree with the shared values, but they have all been exposed to them and have often been told they are important. At Hewlett-Packard, for