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954100 INFORMATION SYSTEM FOR ORGANIZATION MANAGEMENT  CHAPTER 1 MANAGING IN A GLOBALIZATION ERA  CONTENT DEFINITION OF MANAGEMENT ROLES MANAGEMENT MANAGEMENT LEVELS MANAGER’S RESPONSIBILITY TYPES OF MANAGER...

954100 INFORMATION SYSTEM FOR ORGANIZATION MANAGEMENT  CHAPTER 1 MANAGING IN A GLOBALIZATION ERA  CONTENT DEFINITION OF MANAGEMENT ROLES MANAGEMENT MANAGEMENT LEVELS MANAGER’S RESPONSIBILITY TYPES OF MANAGERS MANAGEMENT SKILLS MANAGEMENT FUNCTION  INTRODUCTION TO ORGANIZATION IT’S ASSUMED THAT YOU ALREADY HAVE A LOT OF EXPERIENCE WITH ORGANIZATIONS, TEAMS, AND LEADERSHIP. YOU’VE BEEN THROUGH SCHOOLS, IN CLUBS, PARTICIPATED IN SOCIAL OR RELIGIOUS GROUPS, COMPETED IN SPORTS OR GAMES, OR TAKEN ON FULL- OR PART-TIME JOBS. SOME OF YOUR EXPERIENCE WAS GOOD, BUT YOU WERE ALSO LIKELY WONDERING SOMETIMES, “ISN’T THERE A BETTER WAY TO DO THIS?”  INTRODUCTION TO ORGANIZATION BASICALLY ORGANIZATION IS A STRUCTURE OF …  INTRODUCTION TO ORGANIZATION BEFORE WE START EXPLORING PRINCIPLES OF MANAGEMENT, WE NEED TO UNDERSTAND WHAT ORGANIZATION IS AND WHY DO WE NEED TO LEARN MANAGEMENT.  INTRODUCTION TO ORGANIZATION WHAT IS AN ORGANIZATION? AN ORGANIZATION IS A GROUP OF PEOPLE WHO WORK TOGETHER, LIKE A NEIGHBORHOOD ASSOCIATION, A CHARITY, A UNION, OR A CORPORATION. ORGANIZATION IS ALSO THE ACT OF FORMING OR ESTABLISHING SOMETHING.  INTRODUCTION TO ORGANIZATION WHAT IS AN ORGANIZATION? ORGANIZATION IS A TOOL PEOPLE USE TO COORDINATE THEIR ACTIONS TO OBTAIN SOMETHING THEY DESIRE OR VALUE. INTRODUCTION TO ORGANIZATION A VISION STATES WHAT THE ORGANIZATION ASPIRES TO BECOME IN THE FUTURE. A MISSION REFLECTS THE ORGANIZATION'S PAST AND PRESENT BY STATING WHY THE ORGANIZATION EXISTS AND WHAT ROLE IT PLAYS IN SOCIETY. GOALS ARE THE MORE SPECIFIC AIMS THAT ORGANIZATIONS PURSUE TO REACH THEIR VISIONS AND MISSIONS.  VALUE CREATION AND ORGANIZATIONAL ENVIRONMENT ORGANIZATIONAL ENVIRONMENT Apple ( £1) Apple pie THE SET OF FORCES AND CONDITIONS THAT ( £3) ( £6) Flour/powder OPERATE BEYOND THE ORGANIZATION’S BOUNDARIES BUT AFFECT ITS ABILITY TO ACQUIRE AND USE RESOURCES TO ( £2) “worth” Difference Examples include government regulatory agencies, competitors, customers, suppliers, and pressure from the public.  VALUE CREATION AND ORGANIZATIONAL ENVIRONMENT ORGANIZATIONAL ENVIRONMENT Apple Apple pie THE SET OF FORCES AND CONDITIONS THAT ( £1) ( £3) ( £6) OPERATE BEYOND THE ORGANIZATION’S BOUNDARIES BUT Flour/powder AFFECT ITS ABILITY TO ACQUIRE AND USE RESOURCES TO ( £2) “worth” Difference Influence each stage Lack of skill labor 3 stages Input conversion output Raw materials Machinery Goods Capital/financial Employees Services  WHAT IS MANAGEMENT MANAGEMENT IS THE COORDINATION AND ADMINISTRATION OF TASKS TO ACHIEVE A GOAL. SUCH ADMINISTRATION ACTIVITIES INCLUDE SETTING THE ORGANIZATION'S STRATEGY AND COORDINATING THE EFFORTS OF STAFF TO ACCOMPLISH THESE OBJECTIVES THROUGH THE APPLICATION OF AVAILABLE RESOURCES.  THE MANAGER’S RESPONSIBILITY A MANAGER IS RESPONSIBLE FOR ACHIEVING ORGANIZATIONAL OBJECTIVES THROUGH EFFICIENT AND EFFECTIVE UTILIZATION OF RESOURCES. EFFICIENT REFERS TO DOING THINGS RIGHT, TO MAXIMIZING THE MANAGER UTILIZATION OF RESOURCES. EFFECTIVE REFERS TO DOING THE RIGHT THING IN ORDER TO ATTAIN THE OBJECTIVE, OR THE DEGREE TO WHICH A MANAGER ACHIEVES OBJECTIVES. THE MANAGER'S RESOURCES INCLUDE HUMAN, FINANCIAL, PHYSICAL, AND INFORMATIONAL. The individual responsible for achieving organizational objectives through efficient and effective utilization of resources.  THE MANAGER’S RESPONSIBILITY HUMAN RESOURCES MANAGERS ARE RESPONSIBLE FOR GETTING THE JOB DONE THROUGH EMPLOYEES. PEOPLE ARE THE MANAGER'S MOST VALUABLE RESOURCE. HOW MANAGERS WORK WITH EMPLOYEES TO ACCOMPLISH ORGANIZATIONAL OBJECTIVES.  THE MANAGER’S RESPONSIBILITY FINANCIAL RESOURCES MOST MANAGERS HAVE A BUDGET STATING HOW MUCH IT SHOULD COST TO OPERATE THEIR DEPARTMENT/STORE FOR A SET PERIOD OF TIME. A BUDGET DEFINES THE FINANCIAL RESOURCES AVAILABLE. THE MANAGER IS RESPONSIBLE FOR SEEING THAT THE DEPARTMENT DOES NOT WASTE ANY OF THE AVAILABLE RESOURCES.  THE MANAGER’S RESPONSIBILITY PHYSICAL RESOURCES GETTING THE JOB DONE REQUIRES EFFECTIVE AND EFFICIENT USE OF PHYSICAL RESOURCES. MANAGERS ARE RESPONSIBLE FOR KEEPING EQUIPMENT IN WORKING CONDITION AND FOR MAKING SURE THAT NECESSARY MATERIALS AND SUPPLIES ARE AVAILABLE.  THE MANAGER’S RESPONSIBILITY INFORMATIONAL RESOURCES MANAGERS NEED INFORMATION TECHNOLOGY. THE CONTROLLER USED TO STORE AND RETRIEVE INFORMATION WITHIN AND AMONG GAP STORES. CHECKING VOICE MAIL AND E-MAIL, MAKING CALLS, GIVING EMPLOYEES DIRECTIONS ON SETTING UP DISPLAYS, ATTENDING THE DISTRICT MEETING, AND PARTICIPATING IN THE STORE WALK-THROUGH, SHE WAS USING INFORMATIONAL RESOURCES. INFORMATION CONTINUES TO INCREASE IN IMPORTANCE AS A MEANS OF INCREASING THE SPEED OF DOING BUSINESS IN A COMPETITIVE GLOBAL INTERNET ENVIRONMENT.  NOW THAT YOU I HAVE AN IDEA OF WHAT MANAGEMENT IS, YOU WILL LEARN SOME OF THE QUALITIES AND SKILLS NECESSARY TO BE A SUCCESSFUL MANAGER.  MANAGEMENT QUALITIES "WHAT DOES IT TAKE TO BE A SUCCESSFUL MANAGER?“ "WHAT ARE THE MOST IMPORTANT TRAITS FOR SUCCESS AS A SUPERVISOR?" Self-Assessment Exercise  MANAGEMENT SKILLS Technical Skills TECHNICAL SKILLS INVOLVE THE ABILITY TO USE METHODS AND TECHNIQUES TO PERFORM A TASK. WHEN MANAGERS ARE WORKING ON BUDGETS, THEY MAY NEED COMPUTER SKILLS IN SPREADSHEET SOFTWARE SUCH AS LOTUS 1-2-3 OR EXCEL. MOST EMPLOYEES ARE PROMOTED TO THEIR FIRST MANAGEMENT POSITION PRIMARILY BECAUSE OF THEIR TECHNICAL SKILLS. TECHNICAL SKILLS VARY WIDELY FROM JOB TO JOB; THEREFORE, THIS COURSE DOES NOT FOCUS ON DEVELOPING TECHNICAL SKILLS.  MANAGEMENT SKILLS Human and HUMAN AND COMMUNICATION SKILLS REFLECT THE ABILITY TO Communication WORK WITH PEOPLE IN TEAMS. WITHOUT COMMUNICATION Skills SKILLS, YOU CANNOT BE AN EFFECTIVE TEAM MEMBER OR MANAGER. BILL GATES, CO-FOUNDER OF MICROSOFT, ADVISES STUDENTS TO LEARN TO WORK WITH PEOPLE. 13 HOW WELL YOU GET ALONG WITH EMPLOYEES WILL AFFECT YOUR MANAGEMENT SUCCESS.  MANAGEMENT SKILLS Conceptual and CONCEPTUAL AND DECISION-MAKING SKILLS CENTER AROUND THE ABILITY TO UNDERSTAND ABSTRACT IDEAS AND SELECT ALTERNATIVES Decision-Making TO SOLVE PROBLEMS. ANOTHER TERM FOR CONCEPTUAL SKILLS IS Skills SYSTEMS THINKING, OR THE ABILITY TO UNDERSTAND AN ORGANIZATION/DEPARTMENT AS A WHOLE AND THE INTERRELATIONSHIP AMONG ITS PARTS. AS BUSINESSES COMPETE IN A CONTINUALLY DIVERSIFYING GLOBAL INTERNET ENVIRONMENT, CREATIVE ANALYSIS AND JUDGMENT, CURRENTLY REFERRED TO AS CRITICAL THINKING, ARE NEEDED TO RESOLVE CONFLICT AND SOLVE PROBLEMS. 6 TRAITS NECESSARY FOR SUCCESS AS A MANAGER Supervisory ability Need for occupational achievement Intelligence Decisiveness Self-assurance Initiative Edwin Ghiselli  a. technical b. human and communication Exercise c. conceptual and decision-making Identify each skill in the following five situations as being one of the following: The ability to see things as a whole and as the i interrelationship of their parts. The ability to motivate employees to do a good job. The ability to perform departmental jobs such as data entry in a computer. The ability to determine what's going wrong and correct it. The ability to write memos and letters. &  MANAGEMENT FUNCTIONS Planning Organizaing Leading Controlling PLANNING PLANNING IS TYPICALLY THE STARTING POINT IN THE DEFINITION MANAGEMENT PROCESS. TO BE SUCCESSFUL, THE PROCESS OF SETTING ORGANIZATIONS NEED A GREAT DEAL OF PLANNING. OBJECTIVES AND DETERMINING IN PEOPLE IN ORGANIZATIONS NEED GOALS AND PLANS TO ADVANCE EXACTLY HOW THE ACHIEVE THEM.20 PLANNING IS THE PROCESS OF SETTING OBJECTIVES WILL BE MET. OBJECTIVES AND DETERMINING IN ADVANCE EXACTLY HOW THE OBJECTIVES WILL BE MET. THE ABILITY TO PERFORM THE PLANNING FUNCTION IS BASED ON CONCEPTUAL AND DECISION-MAKING MANAGEMENT SKILLS. ORGANIZING TO BE SUCCESSFUL REQUIRES ORGANIZATION. A MANAGER DEFINITION MUST DESIGN AND DEVELOP AN ORGANIZATIONAL SYSTEM THE PROCESS OF DELEGATING TO IMPLEMENT THE PLANS. AND COORDINATING TASKS AND ORGANIZING IS THE PROCESS OF DELEGATING AND RESOURCES TO ACHIEVE COORDINATING TASKS AND RESOURCES TO ACHIEVE OBJECTIVES. OBJECTIVES. MANAGERS ALLOCATE AND ARRANGE RESOURCES. AN IMPORTANT PART OF COORDINATING HUMAN RESOURCES IS TO ASSIGN PEOPLE TO VARIOUS JOBS AND TASKS. LEADING DEFINITION A MANAGER MUST LEAD EMPLOYEES AS THEY PERFORM THEIR TASKS ON A DAILY BASIS. THE PART OF MANAGEMENT FUNCTION WHICH ACTUATES THE LEADING IS THE PROCESS OF INFLUENCING EMPLOYEES TO ORGANIZATION MEMBERS TO WORK TOWARD ACHIEVING OBJECTIVES. WORK EFFICIENTLY AND EFFECTIVELY FOR THE ATTAINMENT MANAGERS MUST COMMUNICATE THE OBJECTIVES TO OF ORGANIZATIONAL OBJECTIVES. EMPLOYEES AND MOTIVATE THEM TO ACHIEVE THE OBJECTIVES. CONTROLLING CONTROLLING IS THE PROCESS OF ESTABLISHING AND DEFINITION IMPLEMENTING MECHANISMS TO ENSURE THAT OBJECTIVES CONTROL IS INSTALLING ARE ACHIEVED. PROCESSES TO GUIDE THE TEAM AN IMPORTANT PART OF CONTROLLING IS MEASURING TOWARD GOALS AND PROGRESS TOWARD THE ACHIEVEMENT OF THE OBJECTIVE MONITORING PERFORMANCE AND TAKING CORRECTIVE ACTION WHEN NECESSARY. TOWARD GOALS THE ABILITY TO CONTROL IS BASED ON (1) CONCEPTUAL AND DECISION-MAKING AND (2) HUMAN AND COMMUNICATION SKILLS. NONMANAGEMENT FUNCTIONS ALL MANAGERS PERFORM THE FOUR FUNCTIONS OF MANAGEMENT AS THEY GET THE WORK DONE THROUGH EMPLOYEES. HOWEVER, MANY MANAGERS PERFORM NONMANAGEMENT, OR EMPLOYEE, FUNCTIONS AS WELL. FOR EXAMPLE, THE MANAGER SPENT FROM 10:00 TO 12:00 AND 12:30 TO 1:30 PRIMARILY WAITING ON CUSTOMERS, WHICH IS AN EMPLOYEE OR NONMANAGEMENT FUNCTION. MANY MANAGERS, ARE CALLED WORKING MANAGERS BECAUSE THEY PERFORM BOTH MANAGEMENT AND EMPLOYEE FUNCTIONS.  THE MANAGEMENT FUNCTIONS ARE NOT A LINEAR PROCESS. MANAGERS DO NOT USUALLY PLAN, THEN ORGANIZE, THEN LEAD, AND THEN CONTROL. THE FUNCTIONS ARE DISTINCT YET INTERRELATED. MANAGERS OFTEN PERFORM THESE FUNCTIONS SIMULTANEOUSLY. IN ADDITION, EACH FUNCTION DEPENDS ON THE OTHERS. Remember that the management functions are based on setting (planning) and achieving (organizing, leading, and controlling) objectives.  3 MANAGEMENT ROLE THE MANAGEMENT ROLE THAT MANAGERS UNDERTAKE TO ACCOMPLISH THE MANAGEMENT FUNCTIONS INCLUDE THE FOLLOWING: INTERPERSONAL INFORMATIONAL DECISIONAL  3 MANAGEMENT ROLE INTERPERSONAL INTERPERSONAL LEADERSHIP IS THE ABILITY TO INSPIRE AND ENGAGE OTHERS TO DO THEIR BEST WORK TOWARDS A SHARED GOAL. INTERPERSONAL SKILLS ARE ALSO KNOWN AS “SOFT SKILLS.” INTERPERSONAL LEADERS BRING OUT THE BEST IN OTHERS THROUGH EMPOWERMENT, MOTIVATION, AND ROLE-MODELING.  3 MANAGEMENT ROLE INFORMATIONAL “INFORMATIONAL ROLES ARE THOSE IN WHICH YOU GATHER AND THEN PASS ON INFORMATION. “ THESE ROLES HAVE STARTED TO CHANGE DRAMATICALLY WITH TECHNOLOGICAL IMPROVEMENT. MAINLY, THESE ROLES INCLUDE INFORMATION MOVEMENT. UNDER THIS ROLE, A MANAGER PLAYS A MONITOR, DISSEMINATOR, AND SPOKESPERSON ROLE.  3 MANAGEMENT ROLE DECISIONAL DECISION-MAKING SKILLS ARE ABOUT YOUR ABILITY TO CHOOSE A GOOD OPTION OUT OF TWO OR MORE ALTERNATIVES. AS A TYPE OF PROBLEM-SOLVING SKILL, THERE ARE THREE MAIN WAYS TO APPROACH DECISION-MAKING: USING INTUITION, REASONING, OR A COMBINATION OF BOTH.  WORKPLACE KNOW-HOW THE KNOW-HOW IDENTIFIED BY SCANS IS MADE UP OF FIVE COMPETENCIES AND A THREE-PART FOUNDATION OF SKILLS AND PERSONAL QUALITIES NEEDED FOR SOLID PERFORMANCE. THESE INCLUDE: 1. RESOURCE 2. INTERPERSONAL SKILL 3. INFORMATION 4. SYSTEMS 5. TECHNOLOGY  WORKPLACE KNOW-HOW 1. RESOURCE ALLOCATING TIME, MONEY, MATERIALS, SPACE, AND STAFF. 2. INTERPERSONAL SKILL RELATES TO HUMAN AND COMMUNICATION MANAGEMENT SKILLS AND TO ORGANIZING AND LEADING MANAGEMENT FUNCTIONS.) 3. INFORMATION RELATES TO THE TECHNICAL AND HUMAN AND COMMUNICATION MANAGEMENT SKILLS AND TO THE ORGANIZING, LEADING, AND CONTROLLING MANAGEMENT FUNCTIONS. 4. SYSTEMS RELATE TO THE CONCEPTUAL AND DECISION-MAKING MANAGEMENT SKILLS AND TO THE PLANNING, ORGANIZING, AND CONTROLLING MANAGEMENT FUNCTIONS.) 5. TECHNOLOGY RELATES TO TECHNICAL MANAGEMENT SKILLS AND TO THE PLANNING, ORGANIZING, AND CONTROLLING MANAGEMENT FUNCTIONS.  3 PART FOUNDATION SKILLS BASIC SKILLS BASIC SKILLS. READING, WRITING, ARITHMETIC AND MATHEMATICS; SPEAKING AND LISTENING. (ALL THE MANAGEMENT SKILLS AND FUNCTIONS NEED THE BASIC SKILLS. READING SKILLS.  3 PART FOUNDATION SKILLS THINKING SKILLS THINKING CREATIVELY, MAKING DECISIONS, SOLVING PROBLEMS, SEEING THINGS IN THE MIND'S EYE, KNOWING HOW TO LEARN, AND REASONING.  3 PART FOUNDATION SKILLS PERSONAL QUALITIES PERSONAL QUALITIES. INDIVIDUAL RESPONSIBILITY, SELF-ESTEEM, SOCIABILITY, SELF-MANAGEMENT, AND INTEGRITY.  THE THREE LEVELS OF MANAGEMENT THE FOUNDATION OF SKILLS AND PERSONAL QUALITIES INCLUDE: 1. TOP MANAGERS 2. MIDDLE MANAGERS 3. FIRST-LINE MANAGERS  THE THREE LEVELS OF MANAGEMENT TOP MANAGERS TOP MANAGER OR TOP-LEVEL MANAGEMENT ARE YOUR EXECUTIVES SUCH AS A CEO, CFO, PRESIDENT AND VICE PRESIDENT. THESE TOP MANAGERS ARE RESPONSIBLE FOR SETTING THE OVERALL DIRECTION OF A COMPANY AND MAKING SURE THAT MAJOR ORGANIZATIONAL OBJECTIVES ARE ACHIEVED.  THE THREE LEVELS OF MANAGEMENT MIDDLE MANAGERS PEOPLE HOLDING THESE POSITIONS HAVE TITLES SUCH AS SALES MANAGER, BRANCH MANAGER, OR DEPARTMENT HEAD. MIDDLE MANAGERS ARE RESPONSIBLE FOR IMPLEMENTING TOP MANAGEMENT'S STRATEGY BY DEVELOPING SHORT TERM OPERATING PLANS. THEY GENERALLY REPORT TO EXECUTIVES AND SUPERVISE THE WORK OF FIRST-LINE MANAGERS.  THE THREE LEVELS OF MANAGEMENT FIRST-LINE MANAGERS FIRST-LINE MANAGERS ARE THE ENTRY-LEVEL MANAGERS WHO PERFORM ON-THE-GROUND MANAGEMENT DUTIES. THEY ARE THE MANAGERS WHO HAVE THE CLOSEST PROXIMITY WITH TEAM MEMBERS, AND THEY ARE TYPICALLY RESPONSIBLE FOR ENSURING THAT THEIR TEAM EFFECTIVELY CARRIES OUT ORGANIZATIONAL GOALS ON A DAILY BASIS. NONMANAGEMENT OPERATIVE EMPLOYEES OPERATIVE EMPLOYEES ARE THE WORKERS IN AN ORGANIZATION WHO DO NOT HOLD MANAGEMENT POSITIONS. THEY REPORT TO FIRST-LINE MANAGERS. THEY MAKE THE PRODUCTS, WAIT ON CUSTOMERS, PERFORM REPAIRS, AND SO ON. THE THREE TYPES OF MANAGERS INCLUDE GENERAL, FUNCTIONAL, AND PROJECT. TOP-LEVEL AND SOME MIDDLE MANAGERS ARE GENERAL MANAGERS BECAUSE THEY SUPERVISE THE ACTIVITIES OF SEVERAL DEPARTMENTS THAT PERFORM DIFFERENT ACTIVITIES. MIDDLE AND FIRST-LINE MANAGERS ARE OFTEN FUNCTIONAL MANAGERS WHO SUPERVISE THE ACTIVITIES OF RELATED TASKS.  THE INTERNAL ENVIRONMENT THE ORGANIZATION'S INTERNAL ENVIRONMENT INCLUDES THE FACTORS THAT AFFECT ITS PERFORMANCE FROM WITHIN ITS BOUNDARIES. THE FIVE INTERNAL ENVIRONMENTAL FACTORS THAT WE'LL TALK ABOUT IN THIS SECTION ARE MANAGEMENT AND CULTURE MISSION RESOURCES THE SYSTEMS PROCESS STRUCTURE  THE INTERNAL ENVIRONMENT: MANAGEMENT AND CULTURE MANAGERS ARE RESPONSIBLE FOR THE MANAGERS ARE ALSO RESPONSIBLE FOR LINKING EMPLOYEES TO THE ORGANIZATIONAL CULTURE. ORGANIZATION'S PERFORMANCE. AN ORGANIZATIONAL CULTURE, CONSISTS OF THE THE LEADERSHIP STYLE USED AND THE SHARED VALUES, BELIEFS, AND ASSUMPTIONS OF HOW ITS MEMBERS SHOULD BEHAVE. DECISIONS MADE BY MANAGERS FROM THE ORGANIZATIONAL CULTURE IS AN APPROACH TO TOP DOWN AFFECT THE PERFORMANCE OF UNDERSTANDING HOW ORGANIZATIONS FUNCTION, THE ORGANIZATION. OR IT GIVES MEANING TO THE ORGANIZATION'S WAY OF DOING THINGS. ORGANIZATIONAL CULTURE AS THE ORGANIZATION'S PERSONALITY. MEMBERS OF AN ORGANIZATION NEED TO UNDERSTAND ITS CULTURE.  THE INTERNAL ENVIRONMENT: MISSION THE ORGANIZATION'S MISSION IS ITS PURPOSE OR REASON FOR BEING. DEVELOPING THE MISSION IS TOP MANAGEMENT'S RESPONSIBILITY. THE MISSION SHOULD INCLUDE OBJECTIVE THAT ALLOW FOR MEASUREMENT AND EVALUATION OF PERFORMANCE. THE MISSION SHOULD BE RELEVANT TO ALL STAKEHOLDERS. THE MISSION IS ALSO KNOWN AS THE ENDS THE ORGANIZATION STRIVES TO ATTAIN.  THE INTERNAL ENVIRONMENT: MISSION THE ORGANIZATION'S MISSION IS ITS PURPOSE OR REASON FOR BEING. DEVELOPING THE MISSION IS TOP MANAGEMENT'S RESPONSIBILITY. THE MISSION SHOULD INCLUDE OBJECTIVE THAT ALLOW FOR MEASUREMENT AND EVALUATION OF PERFORMANCE. THE MISSION SHOULD BE RELEVANT TO ALL STAKEHOLDERS. THE MISSION IS ALSO KNOWN AS THE ENDS THE ORGANIZATION STRIVES TO ATTAIN.  THE INTERNAL ENVIRONMENT: RESOURCES ORGANIZATIONAL RESOURCES INCLUDE HUMAN, FINANCIAL, PHYSICAL, AND INFORMATIONAL. EXAMPLE: FEDEX EXPRESS TRANSPORTATION Human Physical Financial Informational resources resources resources resources achieving the aircraft and purchase and include organization's ground vehicles maintain the COSMOS, the mission and physical FedEx computer objective resources and to system pay employees  THE INTERNAL ENVIRONMENT: SYSTEMS PROCESS INPUTS OUTPUTS Inputs Transformation/ Outputs Feedback conversion Inputs are the start- the conversion of Outputs are the Feedback provides up forces that the inputs into products offered to a means of control provide the outputs customers to ensure that the organization with inputs and operating transformation necessities. The process are inputs are the producing the organization's desired results resources  THE INTERNAL ENVIRONMENT: SYSTEMS PROCESS Transformation Inputs Outputs Feedback Quality Value  THE INTERNAL ENVIRONMENT: STRUCTURE An organizational structure is a system that outlines how certain activities are directed in order to achieve the goals of an organization. These activities can include rules, roles, and responsibilities. The organizational structure also determines how information flows between levels within the company.  ORGANIZATIONAL CULTURE Organizational culture refers to a company's mission, objectives, expectations and values that guide its employees. Businesses with an organizational culture tend to be more successful than less structured companies because they have systems in place that promote employee performance, productivity and engagement. Walt Disney – Where the happiest place on earth is the happiest place to work  ORGANIZATIONAL CULTURE Five artifacts or important ways that employees learn about organizational culture are: 1. Heroes-such as founders Tom Watson of IBM, Sam Walton of Wal-Mart, Herb Kelleher of Southwest Airlines, Frederick Smith of FedEx, and others who have made outstanding contributions to their organizations. 2. Stories -often about founders and others who have made extraordinary efforts, such as Sam Walton visiting every Wal-Mart store yearly, or someone driving through a blizzard to deliver a product or service. Public statements and speeches can also be considered stories. 3. Slogans such as "Quality Is Job 1" at Ford; McDonald's Q,S,C, VQuality, Service, Cleanliness, and Value; and the FedEx People-ServiceProfit philosophy. 4. Symbols such as plaques, pins, jackets, or a Mary Kay Cosmetics pink Cadillac. Symbols convey meaning. 5. Ceremonies such as awards dinners by Mary  THREE LEVELS OF CULTURE Level 1. Behavior Behavior includes the observable things that people do and say, or the actions employees take. Artifacts result from behavior and include written and spoken language, dress, material objects, and the organization's layout. Level 2. Values and Beliefs Values and beliefs provide the operating principles that guide decision making and behavior that result in level 1 culture Level 3. Assumptions Assumptions are values and beliefs that are deeply ingrained as unquestionably true. Employees tend to unquestionably understand how things are. THREE LEVELS OF CULTURE 1 Artifacts 2 Values and Beliefs 3 Assumptions  ORGANIZATIONAL CULTURE Strong cultures Weak cultures Organizations with strong cultures Organizations with many have employees who employees who do not behave as unconsciously know the shared expected have weak cultures. assumptions; consciously know When employees do not agree the values and beliefs; agree with with the generally accepted the shared assumptions, values, shared values, they may become and beliefs; and behave as rebels and fight the culture. expected.  THE EXTERNAL ENVIRONMENT THE ORGANIZATION'S EXTERNAL ENVIRONMENT INCLUDES THE FACTORS THAT AFFECT ITS PERFORMANCE FROM OUTSIDE ITS BOUNDARIES. THE NINE MAJOR EXTERNAL FACTORS ARE (TASK FACTORS) CUSTOMERS SOCIETY COMPETITION TECHNOLOGY SUPPLIERS THE ECONOMY LABOR FORCE/UNIONS GOVERNMENTS SHAREHOLDERS  THE EXTERNAL ENVIRONMENT: CUSTOMERS CUSTOMERS HAVE A MAJOR EFFECT ON THE ORGANIZATION'S PERFORMANCE THROUGH PURCHASING PRODUCTS. WITHOUT CUSTOMERS THERE IS NO NEED FOR AN ORGANIZATION. EFFECTIVE MANAGERS REALIZE THE NEED TO OFFER CUSTOMERS PRODUCTS OF VALUE TO THEM. CONTINUALLY IMPROVING CUSTOMER VALUE IS OFTEN THE DIFFERENCE BETWEEN SUCCESS AND FAILURE IN BUSINESS. Is Customer Service Important?  THE EXTERNAL ENVIRONMENT: COMPETITION ORGANIZATIONS MUST COMPETE FOR CUSTOMERS. Effective managers develop COMPETITORS' STRATEGIC MOVES AFFECT THE missions with strategies that PERFORMANCE OF THE ORGANIZATION. offer a unique advantage over COMPETITION IS SOMETIMES DEFINED AS THE the competition. PRESENCE OF A PARTICULAR TYPE OF ACTION, Time-based competition, which focuses SUCH AS PRICE-CUTTING, INNOVATION, OR on increasing the speed of going from INCREASED ORGANIZATIONAL EFFORT. product idea to delivery to customers, is a current trend in the global environment.  THE EXTERNAL ENVIRONMENT: SUPPLIERS A SUPPLIER IS A PERSON OR BUSINESS THAT PROVIDES A PRODUCT OR SERVICE TO ANOTHER ENTITY. THE ROLE OF A SUPPLIER IN A BUSINESS IS TO PROVIDE HIGH-QUALITY PRODUCTS FROM A MANUFACTURER AT A GOOD PRICE TO A To be an effective manager you need to realize the importance of suppliers and DISTRIBUTOR OR RETAILER FOR RESALE. develop close working relationships with them  THE EXTERNAL ENVIRONMENT: LABOR FORCE THE EMPLOYEES OF THE ORGANIZATION HAVE A DIRECT EFFECT ON ITS PERFORMANCE. MANAGEMENT RECRUITS HUMAN RESOURCES FROM THE AVAILABLE LABOR FORCE OUTSIDE ITS BOUNDARIES. THE FIRM'S MISSION, ITS STRUCTURE, AND ITS SYSTEMS PROCESS ARE MAJOR DETERMINING FACTORS OF THE CAPABILITY LEVELS EMPLOYEES NEED TO MEET OBJECTIVES. Unions are considered an external factor because they become a third party when dealing with the organization. The union has the power to strike. When a union strikes, revenues and wages are lost.  THE EXTERNAL ENVIRONMENT: SHAREHOLDERS THE OWNERS OF A CORPORATION, KNOWN AS SHAREHOLDERS, HAVE A SIGNIFICANT INFLUENCE ON MANAGEMENT MOST SHAREHOLDERS OF LARGE CORPORATIONS ARE GENERALLY NOT INVOLVED IN THE DAY-TO-DAY OPERATION OF THE FIRM, BUT THEY DO VOTE FOR THE DIRECTORS OF THE CORPORATION.  THE EXTERNAL ENVIRONMENT: SOCIETY MEMBERS OF SOCIETY MAY ALSO EXERT PRESSURE ON THE MANAGEMENT OF AN ORGANIZATION TO CHANGE. INDIVIDUALS AND GROUPS HAVE FORMED TO PRESSURE BUSINESS FOR CHANGES. PEOPLE WHO LIVE IN THE AREA OF A BUSINESS DO NOT WANT IT TO POLLUTE THE AIR OR WATER OR OTHERWISE ABUSE THE NATURAL RESOURCES. SOCIETY IS PRESSURING BUSINESS TO BE SOCIALLY RESPONSIBLE AND ETHICAL.  THE EXTERNAL ENVIRONMENT: TECHNOLOGY THE RATE OF TECHNOLOGICAL CHANGE WILL CONTINUE TO INCREASE. THE COMPUTER AND INTERNET HAVE CHANGED THE SPEED AND WAY ORGANIZATIONS CONDUCT AND TRANSACT BUSINESS. COMPUTERS ARE OFTEN A MAJOR PART OF A FIRM'S SYSTEMS PROCESS. TELECOMMUNICATIONS HAS BEEN GROWING FOR A CENTURY AND MAY BE POISED TO EXPLODE INTO A WAVE OF NEW PRODUCTS.  THE EXTERNAL ENVIRONMENT: ECONOMY THE ORGANIZATION HAS NO CONTROL OVER ECONOMIC GROWTH, INFLATION, INTEREST RATES, FOREIGN EXCHANGE RATES, AND SO ON, YET THESE THINGS HAVE A DIRECT IMPACT ON ITS PERFORMANCE. IN GENERAL, AS MEASURED BY GROSS DOMESTIC PRODUCT (GDP), BUSINESSES DO BETTER WHEN THE ECONOMY IS GROWING THAN DURING TIMES OF DECREASED GDP, OR RECESSION.  THE EXTERNAL ENVIRONMENT: GOVERNMENTS GOVERNMENTS CAN CREATE SUBSIDIES, TAXING THE PUBLIC AND GIVING THE MONEY TO AN INDUSTRY, OR TARIFFS, ADDING TAXES TO FOREIGN PRODUCTS TO LIFT PRICES AND MAKE DOMESTIC PRODUCTS MORE APPEALING. HIGHER TAXES, FEES, AND FOREIGN, FEDERAL, STATE, AND LOCAL GREATER REGULATIONS CAN STYMIE GOVERNMENTS ALL SET LAWS AND BUSINESSES OR ENTIRE INDUSTRIES. REGULATIONS THAT BUSINESSES MUST OBEY. GOVERNMENTS CAN CREATE SUBSIDIES, TAXING THE PUBLIC AND GIVING THE MONEY TO AN INDUSTRY, OR TARIFFS, ADDING TAXES TO FOREIGN PRODUCTS TO LIFT PRICES AND MAKE DOMESTIC PRODUCTS MORE APPEALING. HIGHER TAXES, FEES, AND FOREIGN, FEDERAL, STATE, AND LOCAL GREATER REGULATIONS CAN STYMIE GOVERNMENTS ALL SET LAWS AND BUSINESSES OR ENTIRE INDUSTRIES. REGULATIONS THAT BUSINESSES MUST OBEY. GOVERNMENTS CAN CREATE SUBSIDIES, TAXING THE PUBLIC AND GIVING THE MONEY TO AN INDUSTRY, OR TARIFFS, ADDING TAXES TO FOREIGN PRODUCTS TO LIFT PRICES AND MAKE DOMESTIC PRODUCTS MORE APPEALING. HIGHER TAXES, FEES, AND FOREIGN, FEDERAL, STATE, AND LOCAL GREATER REGULATIONS CAN STYMIE GOVERNMENTS ALL SET LAWS AND BUSINESSES OR ENTIRE INDUSTRIES. REGULATIONS THAT BUSINESSES MUST OBEY. CHAOS AND INTERACTIVE MANAGEMENT MANAGERS MUST ACTIVELY WORK TO INFLUENCE THEIR INTERNAL AND EXTERNAL ENVIRONMENTS THROUGH LOBBYING, VOTING, AND USING THE MEDIA TO INFLUENCE PUBLIC OPINION. INTERNAL ELEMENTS COMPRISE THE ORGANIZATION ITSELF. INTERNAL CHANGE ARISES FROM ACTIVITIES AND DECISIONS WITHIN THE ORGANIZATION. Q&A  954100 Information system for organization management Chapter 2 The strategic and operational planning content Definition of planning Type of planning Step in planning Planning premises  Planning Defined planning encompasses defining the organization's objectives or goals establishing an overall strategy for achieving those goals developing a comprehensive hierarchy of plans to integrate and coordinate activities. PLANNING DEFINED  Planning involves choice Planning always involves choices among various alternatives. Planning is rational planner should be objective and unemotional in their approach to planning. Moreover…. Planning facilitates control Planning encourages innovation and creativity Planning improves morale Planning is essential in every walk of life The environment managers face is too dynamic and has too great an effect on an organization's survival to be left to chance. Accordingly, contemporary managers must plan-and plan effectively.  Objectives of planning Reduces uncertainty Bring co-operation and co-ordination Economy in operation Anticipates unpredictability contingencies Achieving the pre determined goals  Types of Planning Formal Informal planning planning Planning is aims to determine and Informal planning will be effective when the objectives of planning. It is the action number of actions is less and actions have to that determine in advance what should be taken in short period. be done.  Types of Planning Short Long term term planning planning Long-term planning usually converse a period Short-term planning covers the period of one year. between five and fifteen years. It deals with In between there may be medium-term plans. broader technological and competitive These may include plan for purchase of materials, aspects of the organisation as well as production, labour, overhead expenses. allocation of resources over a relatively long time period.  Types of planning Specific plans is plans that have Directional plans is clearly defined objectives and flexible plans that set leave no room for out general guidelines misinterpretation Types of planning Corporate planning Divisional or functional planning Group planning Types of planning Corporate Corporate planning is done at the top level of planning management Divisional or Departmental planning is formulated at the middle level functional of management and approved by the top management planning Group Group planning is formulated mainly at the operating planning level of management The 4 types of planning Operational Strategic planning planning Tactical Contingency planning planning The 4 types of planning Operational Operational planning describes the day-to- planning day running of the company. The 4 types of planning Strategic planning define the Strategic action steps by which the planning organization intends to achieve its goals. The 4 types of planning Tactical planning involves Tactical breaking down a long-term planning strategic plan into smaller and more distinct short- term plans The 4 types of planning A contingency plan is a Contingency plan for a “what if” planning scenario that could ruin your project or business. Levels of strategy Corporate-level A strategy is a plan strategy of action or policy designed to achieve a major or Business-level overall aim. strategy Functional-level strategy Levels of strategy Corporate-level What business are we in? strategy Business-level How do we compete? strategy Functional-level How do we support the business-level strategy strategy? Planning is a systematic process Step in planning Step 1 Recognizing the Need for Action Step 2 Setting Objectives Step 3 Developing Premises Step 4 Identifying Alternatives Step 5 Examining Alternate Course of Action Step 6 Selecting the Alternative Step 7 Formulating Supporting Plan Step 8 Implementation of the Plan  Step in planning Step 1 Recognizing the Need for Action An important part of the planning process is to be aware of the business opportunities in the firm’s external environment as well as within the firm. Step in planning Step 2 Setting Objectives Identify organizational goals and objectives. The internal and external environment of the organization has to be studied.  Step in planning Step 3 Developing premises The function of management certain assumptions will have to be made. Planning premises are assumptions of future market conditions which become the basis for the current planning process. Panning premises usually relate to cost and availability of resources.  Step in planning Step 4 identifying alternatives There is no one way to achieve the objectives of the firm, All of these alternative courses should be identified. Search and list all possible alternatives in order to be compared and analytically evaluated.  Step in planning Step 5 examines the alternate course of action Select most suitable and best course of action. Alternatives have to be compared and evaluated with respect to their expected contribution to organizational goals  Step in planning Step 6 selecting an alternative The best and most feasible plan will be chosen to be implemented. Step in planning Step 7 formulating supporting plan Once you have chosen the plan to be implemented, managers will have to come up with one or more supporting plans. These secondary plans help with the implementation of the main plan.  Step in planning Step 8 implementation of the plan Involving employees in planning process enhances their cooperation and participation. Continuous suggestions, complaints, and criticisms must be solicited from the employees and continuous evaluation of plans help in identifying recurring mistakes and avoiding them in the future. Planning premises Classification of planning premises Internal and external premises Tangible and intangible premises Controllable, semi-controllable and uncontrollable premises  Internal and external premises Internal premises External premises Internal Premises come from External Premises come from the business itself. It includes the external environment. the skills of the labor force, That is economic, investment policies of the technological, social, political company, management style, and even cultural sales forecasts. environment.  Tangible and intangible premises Tangible Intangible premises premises Tangible premises are Intangible premises are those which can be just assumed and cannot expressed in quantity or be expressed in quantities are quantifiable.  Controllable, Semi-Controllable and Uncontrollable premises Controllable Semi- Uncontrollable controllable Controllable Semi-controllable Factors over which premises are factors premises are whose management has which are said to be which management absolutely no completely under has partial control control the control of management Importance of planning Improve future performance Minimizes risk and uncertainty Facilitates the coordination of activities Direction for action Future opportunities and threats Sets out standards for controlling limitations of planning Planning creates rigidity Planning does not work in a dynamic environment Planning reduces creativity Planning involves huge costs Planning is a time-consuming process Planning does not guarantee success  Scan external environment Evaluate current S - Goals W Set new Goals, Vision, - Vision Mission, and Strategies - Mission O - strategies T Formulate strategy Scan external environment Implement strategy Q&A In class exercise If there are 5 consecutive public holidays How will you plan your public holiday? Make plans to celebrate your special holidays and present in class condition You haven't finished the semester and you have some tasks that must be sent after the holiday. you have 10,000 baht for budget 954100 Information system for organization management Chapter 3: Organizational structure and change Organizational Structure The structures of organizations vary and influence the ease or challenge of organizational performance and change. Source: karanja – Pixabay – CC0 public domain. Principles of organization Organizing is defined as the process of delegating and coordinating tasks On an organization- and resources to wide basis, organizing achieve objectives. refers to grouping activities and resources. Organizational Structure What is organizational structure? Organizational structure refers to how individual and team work within an organization are coordinated. To achieve organizational goals and objectives, individual work needs to be coordinated and managed. Organizational Structure Structure is a valuable tool in achieving coordination, as it specifies reporting relationships (who reports to whom), makes the lines drawing the formal communication channels, and describes how separate actions of individuals are linked together. Chain of command  Chain of command, also known as the organization structure, is the clear line of authority from the top to the bottom of the organization. Span of Management  The span of management refers to the number of employees reporting to a manager. The fewer employees supervised, the smaller or narrower the span of management.  The more employees supervised, the greater or wider the span. There is no best number of employees to manage. The average number of employees reporting to a manager is eleven. The span of management = the number of employees reporting to a manager  Coordination  Coordination means that all departments and individuals within the organization should work together to accomplish the strategic and operational objectives. Other means of coordination include:  Direct contact among people within and among departments.  Liaisons who work in one department and coordinate information and activities with one or more other departments.  Committees made up of people from the different departments being coordinated.  Integrators, such as product or project managers, who do not work for any department but coordinate departmental activities to reach an objective.  Boundary roles in which employees coordinate efforts with people in customer service, purchasing, external environment. Employees in sales public relations, and others play boundary roles. Organizational Structure Organizations can function within a number of different structures, each possessing distinct advantages and disadvantages. Although any structure that is not properly managed will be troubled with issues, some organizational structures are better equipped for particular environments and tasks. Organizational Structure Building Blocks of Structure The four types of structure that have been frequently studied are: centralization, formalization, hierarchical levels, and departmentalization. We view these four elements as the building blocks, or elements, making up a company’s structure. Organizational Structure 1. Centralization Centralization is the degree to which decision-making authority is concentrated at higher levels in an organization. In centralized companies, many important decisions are made at higher levels of the hierarchy, whereas in decentralized companies, decisions are made and problems are solved at lower levels by employees who are closer to the problem in question. Organizational Structure Advantages of Centralization:  Some employees are more comfortable in an organization where their manager confidently gives instructions and makes decisions.  Centralization may also lead to more efficient operations, particularly if the company is operating in a stable environment. Organizational Structure Centralization Organizational Structure Drawbacks or Disadvantages of Centralization:  Centralization is Unsuitable for Large Organization  Destroys Individual Initiative  Manager is Overburdened  Possibility of Power Misuse  No Scope for Specialization  Slows Down the Operations  Low Morale Motivation Organizational Structure Case in point Many companies find that the centralization of operations leads to inefficiencies in decision making. For example, in the 1980s, the industrial equipment manufacturer Caterpillar suffered the consequences of centralized decision making. At the time, all pricing decisions were made in the corporate headquarters in Peoria, Illinois. This meant that when a sales representative working in Africa wanted to give a discount on a product, they needed to check with headquarters. Organizational Structure Headquarters did not always have accurate or timely information about the subsidiary markets to make an effective decision. As a result, Caterpillar was at a disadvantage against competitors such as the Japanese firm Komatsu. Seeking to overcome this centralization paralysis, Caterpillar underwent several dramatic rounds of reorganization in the 1990s and 2000s (Nelson & Pasternack, 2005). Organizational Structure Changing their decision-making approach to a more decentralized style has helped Caterpillar compete at the global level. Source: Aconcagua – Bauma 2007 Bulldozer Caterpillar 2 CC BY-SA 3.0. Organizational Structure As an employee, where would you feel more comfortable and productive? If your answer is “decentralized,” you are not alone. Decentralized companies give more authority to lower- level employees, resulting in a sense of empowerment. Decisions can be made more quickly, and employees often believe that decentralized companies provide greater levels of procedural fairness to employees. Organizational Structure Decentralization Organizational Structure Drawbacks or disadvantages of Decentralization:  Decentralization Increases Expenditure/More Financial Burden  Uniform policies not followed  Decentralization Creates Conflict  Decentralization Is Unsuitable For Emergency Situation  Problem of Co-Ordination  Decentralization Maximizes Risk Organizational Structure Hitting the right balance between decentralization and centralization is a challenge for many organizations. Organizational Structure 2. Formalization Formalization is the extent to which an organization’s policies, procedures, job descriptions, and rules are written and explicitly announced. Formalized structures are those in which there are many written rules and regulations. These structures control employee behavior using written rules, so that employees have little autonomy to decide on a case-by-case basis. Organizational Structure An advantage of formalization is that it makes employee behavior more predictable. Whenever a problem at work arises, employees know to turn to a handbook or a procedure guideline. Therefore, employees respond to problems in a similar way across the organization; this leads to consistency of behavior. While formalization reduces ambiguity and provides direction to employees, it is not without disadvantages. Organizational Structure Disadvantages of Formalization:  A high degree of formalization may actually lead to reduced innovativeness because employees are used to behaving in a certain manner. A formalized structure is associated with reduced motivation and job satisfaction as well as a slower pace of decision making. Organizational Structure  The service industry is particularly susceptible to problems associated with high levels of formalization. Sometimes employees who are listening to a customer’s problems may need to take action, but the answer may not be specified in any procedural guidelines or rulebook. Organizational Structure 3. Hierarchical Levels Another important element of a company’s structure is the number of levels it has in its hierarchy. Keeping the size of the organization constant, tall structures have several layers of management between frontline employees and the top level, while flat structures consist of only a few layers. Organizational Structure In tall structures, the number of employees reporting to each manager tends to be smaller, resulting in greater opportunities for managers to supervise and monitor employee activities. In contrast, flat structures involve a larger number of employees reporting to each manager. In such a structure, managers will be relatively unable to provide close supervision, leading to greater levels of freedom of action for each employee. Organizational Structure Tall Structures versus Flat Structures Source: https://www.bbc.com/bitesize/guides/zpxtfg8/revision/3 Organizational Structure Tall Structures versus Flat Structures Tall organizations have many levels of hierarchy. The span of control is narrow and there are opportunities for promotion. Lines of communication are long, making the firm unresponsive to change. Source: https://www.bbc.com/bitesize/guides/zpxtfg8/revision/3 Organizational Structure Tall Structures versus Flat Structures Flat organizations have few levels of hierarchy. Lines of communication are short, making the firm responsive to change. A wide span of control means that tasks must be delegated and managers can feel overstretched. Source: https://www.bbc.com/bitesize/guides/zpxtfg8/revision/3 Organizational Structure 4. Departmentalization Organizational structures differ in terms of departmentalization, which is broadly categorized as either functional or divisional. Organizations using functional structures group jobs based on similarity in functions. Such structures may have departments such as marketing, manufacturing, finance, accounting, human resources, and information technology. Organizational Structure An example of a pharmaceutical company with a Functional Departmentalization Structure Source: http://open.lib.umn.edu/principlesmanagement/chapter/7-3-organizational-structure/ Organizational Structure In these structures, each person serves a specialized role and handles large volumes of transactions. For example, in a functional structure, an employee in the marketing department may serve as an event planner, planning promotional events for all the products of the company. Organizational Structure In organizations using divisional structures, departments represent the unique products, services, customers, or geographic locations the company is serving. Thus each unique product or service the company is producing will have its own department. Within each department, functions such as marketing, manufacturing, and other roles are replicated. In these structures, employees act like generalists as opposed to specialists. Organizational Structure An Example of a International Fashion Company with a Divisional Departmentalization Structure Organizational Structure Each type of departmentalization has its advantages.  Functional structures tend to be effective when an organization does not have a large number of products and services requiring special attention.  When a company has a diverse product line, each product will have unique demands, deeming divisional (or product- specific) structures more useful for promptly addressing customer demands and anticipating market changes. Organizational Structure  Functional structures are more effective in stable environments that are slower to change. In contrast, organizations using divisional (or product-specific) structures are more agile and can perform better in turbulent environments. Contemporary Forms of Organizational Structures 1. Matrix Organizations 2. Boundaryless Organizations  Collaboration (vertical, horizontal, customers, suppliers, competitors)  Low formalization, Informal communication, Decentralized decision authority, Emphasis on teams that may cross organization boundaries. 3. Learning Organizations  Must have a strong organization culture where all employees have a common goal and are willing to work together through sharing knowledge and information. Contemporary Forms of Organizational Structures Matrix Structure Source: https://rgandersen.wordpress.com/organizing/matrix-2/ Contemporary Forms of Organizational Structures 1. Matrix Organizations Matrix organizations have a design that combines a traditional functional structure with a product structure. Instead of completely switching from a product-based structure, a company may use a matrix structure to balance the benefits of product-based and traditional functional structures. Contemporary Forms of Organizational Structures Matrix structures are created in response to uncertainty and dynamism of the environment and the need to give particular attention to specific products or projects. Using the matrix structure as opposed to product departments may increase communication and cooperation among departments because project managers will need to coordinate their actions with those of department managers. Contemporary Forms of Organizational Structures Disadvantages of Matrix organizations:  In a matrix, each employee reports to two or more managers. This situation is ripe for conflict. Because multiple managers are in charge of guiding the behaviors of each employee, there may be power struggles or turf wars among managers. Contemporary Forms of Organizational Structures  As managers are more interdependent compared to a traditional or product-based structure, they will need to spend more effort coordinating their work.  From the employee’s perspective, there is potential for interpersonal conflict with team members as well as with leaders. The presence of multiple leaders may create role ambiguity or, worse, role conflict. Contemporary Forms of Organizational Structures 2. Boundaryless Organizations Boundaryless organization is a term coined by Jack Welch during his tenure as CEO of General Electric; it refers to an organization that eliminates traditional barriers between departments as well as barriers between the organization and the external environment (Ashkenas, R., et, al., 1995). Contemporary Forms of Organizational Structures Contemporary Forms of Organizational Structures 3. Learning Organizations A learning organization is one whose design actively seeks to acquire knowledge and change behavior as a result of the newly acquired knowledge. In learning organizations, experimenting, learning new things, and reflecting on new knowledge are the norms. At the same time, there are many procedures and systems in place that facilitate learning at all organization levels. Chapter 3: Organizational structure and change (Part 2) Organizational Change What is organizational change? Organizational change is the movement of an organization from one state of affairs to another. A change in the environment often requires change within the organization operating within that environment. Organizational Change Change in almost any aspect of a company’s operation can be met with resistance, and different cultures can have different reactions to both the change and the means to promote the change. Therefore, fundamentally, it is a process that involves effective people management. Organizational Change Managers carrying out any of the P-O-L-C functions often find themselves faced with the need to manage organizational change effectively. Oftentimes, the planning process reveals the need for a new or improved strategy, which is then reflected in changes to tactical and operational plans. Organizational Change Why do organizations change? Organization change occurs when business strategies or major sections of an organization are changed (e.g., reorganization, restructuring). Workplace demographics Technology Globalization (e.g., external or internal forces translate into a perceived need) Performance gap (e.g., performance gap is a disparity between existing and desired performance levels) Organizational Change Resistance to change Resistance to change is the action taken by individuals and groups when they perceive that a change that is occurring as a threat to them. Organizational Change Changing an organization is often essential for a company to remain competitive. Failure to change may influence the ability of a company to survive. But employees do not always welcome changes in methods. According to a 2007 survey conducted by the Society for Human Resource Management (SHRM), employee resistance to change is one of the top reasons change efforts fail (Anonymous, 2007; Huy, Q. N., 1999). Organizational Change Reactions to change may take many forms. http://open.lib.umn.edu/principlesmanagement/wp-content/uploads/sites/5/2015/03/35755889d76b2534e2f35ce2681c2d8f.jpg Reactions to organizational change  Active resistance - The most negative reaction, rarer, easier to cope with since it is outspoken.  Passive resistance - This may be difficult to detect, takes time to uncover signs of resistance in people.  Compliance - This involves going along with proposed changes with little enthusiasm.  Enthusiastic support - Those who show enthusiastic support are defenders of the new way and actually encourage others around them to give support to the change effort. Organizational Change Active resistance is the most negative reaction to a proposed change attempt. Those who engage in active resistance may sabotage the change effort and be outspoken objectors to the new procedures. In contrast, passive resistance involves being disturbed by changes without necessarily voicing these opinions. Instead, passive resisters may dislike the change quietly, feel stressed and unhappy, and even look for a new job without necessarily bringing their concerns to the attention of decision makers. Organizational Change Compliance, however, involves going along with proposed changes with little enthusiasm. Finally, those who show enthusiastic support are defenders of the new way and actually encourage others around them to give support to the change effort as well. Organizational Change To be successful, any change attempt will need to overcome resistance on the part of employees. Otherwise, the result will be loss of time and energy as well as an inability on the part of the organization to adapt to the changes in the environment and make its operations more efficient. Resistance to change also has negative consequences for the people in question. Organizational Change Why do people resist change? The major reasons for resistance to change are:  Misunderstanding about the need for change/the reason for the change is unclear  Fear of the unknown  Lack of competence  Connected to the old way  Low trust  Poor communication  Changes to routines or etc. Is All Resistance Bad? Resistance to change may be a positive force in some instances. In fact, resistance to change is a valuable feedback tool that should not be ignored. By listening to people and incorporating their suggestions into the change effort, it is possible to make a more effective change. Organizational Change To better facilitate necessary changes, several steps can be taken that have been proved to lower the anxiety of employees and ease the transformation process. Often, the simple act of including employees in the change process can rapidly reduce opposition to new methods. Organizational Change In some organizations, this level of inclusion is not possible, and instead organizations can recruit a small number of opinion leaders to promote the benefits of coming changes. Planning and Executing Change Effectively How do you plan, organize, and execute change effectively? Some types of change, such as mergers, often come with job losses. In these situations, it is important to remain fair and ethical while laying off otherwise exceptional employees. Once change has occurred, it is important to take any steps necessary to reinforce the new system. Employees can often require continued support well after an organizational change. Planning and Executing Change Effectively  One of the most useful frameworks in this area is the three-stage model of planned change developed in the 1950s by psychologist Kurt Lewin.  This model assumes that change will encounter resistance. Therefore, executing change without prior preparation is likely to lead to failure.  Instead, organizations should start with unfreezing, or making sure that organizational members are ready for and receptive to change.  This is followed by change, or executing the planned changes.  Finally, refreezing involves ensuring that change becomes permanent and the new habits, rules, or procedures become the norm. Planning and Executing Change Effectively Three-stage model of planned change – by Kurt Lewin Source: http://thebridgesummit.co/t/noBFbBLS Planning and Executing Change Effectively 1. Unfreezing: Making sure that organization members are ready for and receptive to change by:  Communicating a plan for change  Develop a sense of urgency  Building a coalition  Provide support and Allow employees to participate Planning and Executing Change Effectively Unfreezing Before Change Many change efforts fail because people are insufficiently prepared for change. When employees are not prepared, they are more likely to resist the change effort and less likely to function effectively under the new system. What can organizations do before change to prepare employees? There are a number of things that are important at this stage. Planning and Executing Change Effectively 1.1 Communicating a Plan for Change Do people know what the change entails, or are they hearing about the planned changes through the office gossip? When employees know what is going to happen, when, and why, they may feel more comfortable. When this vision is exciting and paints a picture of a future that employees would be proud to be a part of, people are likely to be more committed to change. Planning and Executing Change Effectively 1.2 Develop a Sense of Urgency People are more likely to accept change if they feel that there is a need for it. If employees feel their company is doing well, the perceived need for change will be smaller. Those who plan the change will need to make the case that there is an external or internal threat to the organization’s competitiveness, reputation, or sometimes even its survival and that failure to act will have undesirable consequences. Planning and Executing Change Effectively 1.3 Building a Coalition To convince people that change is needed, the change leader does not necessarily have to convince every person individually. In fact, people’s opinions toward change are affected by opinion leaders or those people who have a strong influence over the behaviors and attitudes of others (Burkhardt, 1994; Kotter, 1995). Instead of trying to get everyone on board at the same time, it may be more useful to convince and prepare the opinion leaders. Planning and Executing Change Effectively 1.4 Provide Support Management may prepare employees for change by providing: Emotional support may be in the form of frequently discussing the changes, encouraging them by expressing confidence in employees’ ability to perform effectively under the new system; Instrumental support may be in the form of providing a training program to employees so that they know how to function under the new system. Planning and Executing Change Effectively 1.5 Allow Employees to Participate They will feel a sense of ownership of the planned change and are more likely to be on board. For example, assume that a company suspects there are problems with manufacturing quality. To convince them that the problem needs to be solved would be to ask them to take customer calls about the product quality. Once employees experience the problem firsthand, they will be more motivated to solve the problem. Planning and Executing Change Effectively 2. Change: Executing the planned changes by:  Continue to provide support  Create small wins  Eliminate obstacles Planning and Executing Change Effectively Executing Change The second stage of Lewin’s three-stage change model is executing change. At this stage, the organization implements the planned changes on technology, structure, culture, or procedures. The specifics of how change should be executed will depend on the type of change. However, there are three tips that may facilitate the success of a change effort. Planning and Executing Change Effectively 2.1 Continue to Provide Support As the change is under way, employees may experience high amounts of stress. They may make mistakes more often or experience uncertainty about their new responsibilities or job descriptions. Management has an important role in helping employees cope with this stress by displaying support, patience, and continuing to provide support to employees even after the change is complete. Planning and Executing Change Effectively 2.2 Create Small Wins If people see changes, improvements, and successes along the way, they will be inspired and motivated to continue the change effort. For this reason, breaking up the proposed change into phases may be a good idea because it creates smaller targets. Small wins are also important for planners of change to make the point that their idea is on the right track. Early success gives change planners more credibility while early failures may be a setback (Hamel, 2000). Planning and Executing Change Effectively 2.3 Eliminate Obstacles When the change effort is in place, many obstacles may crop up along the way. There may be obstacles rooted in a company’s structure, existing processes, or culture. It is the management’s job to identify, understand, and remove these obstacles (Kotter, 1995). Ideally, these obstacles would have been eliminated before implementing the change, but sometimes unexpected roadblocks emerge as change is under way. Planning and Executing Change Effectively 3. Refreezing: Ensure that change becomes permanent and the new habits, rules, or procedures become the norm by:  Publicize success  Reward change adoption  Embracing continuous change Planning and Executing Change Effectively Refreezing After the change is implemented, the long-term success of a change effort depends on the extent to which the change becomes part of the company’s culture. If the change has been successful, the revised ways of thinking, behaving, and performing should become routine. To evaluate and reinforce (“refreeze”) the change, there are a number of things management can do. Planning and Executing Change Effectively 3.1 Publicize Success To make change permanent, the organization may benefit from sharing the results of the change effort with employees. How much money did the company save? How much did the company’s reputation improve? What was the reduction in accidents after new procedures were put in place? Sharing concrete results with employees increases their confidence that the implemented change was a right decision. Planning and Executing Change Effectively 3.2 Reward Change Adoption To ensure that change becomes permanent, organizations may benefit from rewarding those who embrace the change effort (an aspect of the controlling function). The rewards do not necessarily have to be financial. The simple act of recognizing those who are giving support to the change effort in front of their peers may encourage others to get on board. Planning and Executing Change Effectively 3.3 Embracing Continuous Change When an organization understands that change does indeed occur constantly, it will be in a better position to make use of good changes and intervene if a change seems detrimental. The learning organization is an example of a company embracing continuous change by setting up a dynamic feedback loop, learning can become a regular part of daily operations. Q&A 954100 Information system for organization management Chapter 3: Organizational structure and change Organizational Structure The structures of organizations vary and influence the ease or challenge of organizational performance and change. Source: karanja – Pixabay – CC0 public domain. Principles of organization Organizing is defined as the process of delegating and coordinating tasks On an organization- and resources to wide basis, organizing achieve objectives. refers to grouping activities and resources. Organizational Structure What is organizational structure? Organizational structure refers to how individual and team work within an organization are coordinated. To achieve organizational goals and objectives, individual work needs to be coordinated and managed. Organizational Structure Structure is a valuable tool in achieving coordination, as it specifies reporting relationships (who reports to whom), makes the lines drawing the formal communication channels, and describes how separate actions of individuals are linked together. Chain of command  Chain of command, also known as the organization structure, is the clear line of authority from the top to the bottom of the organization. Span of Management  The span of management refers to the number of employees reporting to a manager. The fewer employees supervised, the smaller or narrower the span of management.  The more employees supervised, the greater or wider the span. There is no best number of employees to manage. The average number of employees reporting to a manager is eleven. The span of management = the number of employees reporting to a manager  Coordination  Coordination means that all departments and individuals within the organization should work together to accomplish the strategic and operational objectives. Other means of coordination include:  Direct contact among people within and among departments.  Liaisons who work in one department and coordinate information and activities with one or more other departments.  Committees made up of people from the different departments being coordinated.  Integrators, such as product or project managers, who do not work for any department but coordinate departmental activities to reach an objective.  Boundary roles in which employees coordinate efforts with people in customer service, purchasing, external environment. Employees in sales public relations, and others play boundary roles. Organizational Structure Organizations can function within a number of different structures, each possessing distinct advantages and disadvantages. Although any structure that is not properly managed will be troubled with issues, some organizational structures are better equipped for particular environments and tasks. Organizational Structure Building Blocks of Structure The four types of structure that have been frequently studied are: centralization, formalization, hierarchical levels, and departmentalization. We view these four elements as the building blocks, or elements, making up a company’s structure. Organizational Structure 1. Centralization Centralization is the degree to which decision-making authority is concentrated at higher levels in an organization. In centralized companies, many important decisions are made at higher levels of the hierarchy, whereas in decentralized companies, decisions are made and problems are solved at lower levels by employees who are closer to the problem in question. Organizational Structure Advantages of Centralization:  Some employees are more comfortable in an organization where their manager confidently gives instructions and makes decisions.  Centralization may also lead to more efficient operations, particularly if the company is operating in a stable environment. Organizational Structure Centralization Organizational Structure Drawbacks or Disadvantages of Centralization:  Centralization is Unsuitable for Large Organization  Destroys Individual Initiative  Manager is Overburdened  Possibility of Power Misuse  No Scope for Specialization  Slows Down the Operations  Low Morale Motivation Organizational Structure Case in point Many companies find that the centralization of operations leads to inefficiencies in decision making. For example, in the 1980s, the industrial equipment manufacturer Caterpillar suffered the consequences of centralized decision making. At the time, all pricing decisions were made in the corporate headquarters in Peoria, Illinois. This meant that when a sales representative working in Africa wanted to give a discount on a product, they needed to check with headquarters. Organizational Structure Headquarters did not always have accurate or timely information about the subsidiary markets to make an effective decision. As a result, Caterpillar was at a disadvantage against competitors such as the Japanese firm Komatsu. Seeking to overcome this centralization paralysis, Caterpillar underwent several dramatic rounds of reorganization in the 1990s and 2000s (Nelson & Pasternack, 2005). Organizational Structure Changing their decision-making approach to a more decentralized style has helped Caterpillar compete at the global level. Source: Aconcagua – Bauma 2007 Bulldozer Caterpillar 2 CC BY-SA 3.0. Organizational Structure As an employee, where would you feel more comfortable and productive? If your answer is “decentralized,” you are not alone. Decentralized companies give more authority to lower- level employees, resulting in a sense of empowerment. Decisions can be made more quickly, and employees often believe that decentralized companies provide greater levels of procedural fairness to employees. Organizational Structure Decentralization Organizational Structure Drawbacks or disadvantages of Decentralization:  Decentralization Increases Expenditure/More Financial Burden  Uniform policies not followed  Decentralization Creates Conflict  Decentralization Is Unsuitable For Emergency Situation  Problem of Co-Ordination  Decentralization Maximizes Risk Organizational Structure Hitting the right balance between decentralization and centralization is a challenge for many organizations. Organizational Structure 2. Formalization Formalization is the extent to which an organization’s policies, procedures, job descriptions, and rules are written and explicitly announced. Formalized structures are those in which there are many written rules and regulations. These structures control employee behavior using written rules, so that employees have little autonomy to decide on a case-by-case basis. Organizational Structure An advantage of formalization is that it makes employee behavior more predictable. Whenever a problem at work arises, employees know to turn to a handbook or a procedure guideline. Therefore, employees respond to problems in a similar way across the organization; this leads to consistency of behavior. While formalization reduces ambiguity and provides direction to employees, it is not without disadvantages. Organizational Structure Disadvantages of Formalization:  A high degree of formalization may actually lead to reduced innovativeness because employees are used to behaving in a certain manner. A formalized structure is associated with reduced motivation and job satisfaction as well as a slower pace of decision making. Organizational Structure  The service industry is particularly susceptible to problems associated with high levels of formalization. Sometimes employees who are listening to a customer’s problems may need to take action, but the answer may not be specified in any procedural guidelines or rulebook. Organizational Structure 3. Hierarchical Levels Another important element of a company’s structure is the number of levels it has in its hierarchy. Keeping the size of the organization constant, tall structures have several layers of management between frontline employees and the top level, while flat structures consist of only a few layers. Organizational Structure In tall structures, the number of employees reporting to each manager tends to be smaller, resulting in greater opportunities for managers to supervise and monitor employee activities. In contrast, flat structures involve a larger number of employees reporting to each manager. In such a structure, managers will be relatively unable to provide close supervision, leading to greater levels of freedom of action for each employee. Organizational Structure Tall Structures versus Flat Structures Source: https://www.bbc.com/bitesize/guides/zpxtfg8/revision/3 Organizational Structure Tall Structures versus Flat Structures Tall organizations have many levels of hierarchy. The span of control is narrow and there are opportunities for promotion. Lines of communication are long, making the firm unresponsive to change. Source: https://www.bbc.com/bitesize/guides/zpxtfg8/revision/3 Organizational Structure Tall Structures versus Flat Structures Flat organizations have few levels of hierarchy. Lines of communication are short, making the firm responsive to change. A wide span of control means that tasks must be delegated and managers can feel overstretched. Source: https://www.bbc.com/bitesize/guides/zpxtfg8/revision/3 Organizational Structure 4. Departmentalization Organizational structures differ in terms of departmentalization, which is broadly categorized as either functional or divisional. Organizations using functional structures group jobs based on similarity in functions. Such structures may have departments such as marketing, manufacturing, finance, accounting, human resources, and information technology. Organizational Structure An example of a pharmaceutical company with a Functional Departmentalization Structure Source: http://open.lib.umn.edu/principlesmanagement/chapter/7-3-organizational-structure/ Organizational Structure In these structures, each person serves a specialized role and handles large volumes of transactions. For example, in a functional structure, an employee in the marketing department may serve as an event planner, planning promotional events for all the products of the company. Organizational Structure In organizations using divisional structures, departments represent the unique products, services, customers, or geographic locations the company is serving. Thus each unique product or service the company is producing will have its own department. Within each department, functions such as marketing, manufacturing, and other roles are replicated. In these structures, employees act like generalists as opposed to specialists. Organizational Structure An Example of a International Fashion Company with a Divisional Departmentalization Structure Organizational Structure Each type of departmentalization has its advantages.  Functional structures tend to be effective when an organization does not have a large number of products and services requiring special attention.  When a company has a diverse product line, each product will have unique demands, deeming divisional (or product- specific) structures more useful for promptly addressing customer demands and anticipating market changes. Organizational Structure  Functional structures are more effective in stable environments that are slower to change. In contrast, organizations using divisional (or product-specific) structures are more agile and can perform better in turbulent environments. Contemporary Forms of Organizational Structures 1. Matrix Organizations 2. Boundaryless Organizations  Collaboration (vertical, horizontal, customers, suppliers, competitors)  Low formalization, Informal communication, Decentralized decision authority, Emphasis on teams that may cross organization boundaries. 3. Learning Organizations  Must have a strong organization culture where all employees have a common goal and are willing to work together through sharing knowledge and information. Contemporary Forms of Organizational Structures Matrix Structure Source: https://rgandersen.wordpress.com/organizing/matrix-2/ Contemporary Forms of Organizational Structures 1. Matrix Organizations Matrix organizations have a design that combines a traditional functional structure with a product structure. Instead of completely switching from a product-based structure, a company may use a matrix structure to balance the benefits of product-based and traditional functional structures. Contemporary Forms of Organizational Structures Matrix structures are created in response to uncertainty and dynamism of the environment and the need to give particular attention to specific products or projects. Using the matrix structure as opposed to product departments may increase communication and cooperation among departments because project managers will need to coordinate their actions with those of department managers. Contemporary Forms of Organizational Structures Disadvantages of Matrix organizations:  In a matrix, each employee reports to two or more managers. This situation is ripe for conflict. Because multiple managers are in charge of guiding the behaviors of each employee, there may be power struggles or turf wars among managers. Contemporary Forms of Organizational Structures  As managers are more interdependent compared to a traditional or product-based structure, they will need to spend more effort coordinating their work.  From the employee’s perspective, there is potential for interpersonal conflict with team members as well as with leaders. The presence of multiple leaders may create role ambiguity or, worse, role conflict. Contemporary Forms of Organizational Structures 2. Boundaryless Organizations Boundaryless organization is a term coined by Jack Welch during his tenure as CEO of General Electric; it refers to an organization that eliminates traditional barriers between departments as well as barriers between the organization and the external environment (Ashkenas, R., et, al., 1995). Contemporary Forms of Organizational Structures Contemporary Forms of Organizational Structures 3. Learning Organizations A learning organization is one whose design actively seeks to acquire knowledge and change behavior as a result of the newly acquired knowledge. In learning organizations, experimenting, learning new things, and reflecting on new knowledge are the norms. At the same time, there are many procedures and systems in place that facilitate learning at all organization levels. Chapter 3: Organizational structure and change (Part 2) Organizational Change What is organizational change? Organizational change is the movement of an organization from one state of affairs to another. A change in the environment often requires change within the organization operating within that environment. Organizational Change Change in almost any aspect of a company’s operation can be met with resistance, and different cultures can have different reactions to both the change and the means to promote the change. Therefore, fundamentally, it is a process that involves effective people management. Organizational Change Managers carrying out any of the P-O-L-C functions often find themselves faced with the need to manage organizational change effectively. Oftentimes, the planning process reveals the need for a new or improved strategy, which is then reflected in changes to tactical and operational plans. Organizational Change Why do organizations change? Organization change occurs when business strategies or major sections of an organization are changed (e.g., reorganization, restructuring). Workplace demographics Technology Globalization (e.g., external or internal forces translate into a perceived need) Performance gap (e.g., performance gap is a disparity between existing and desired performance levels) Organizational Change Resistance to change Resistance to change is the action taken by individuals and groups when they perceive that a change that is occurring as a threat to them. Organizational Change Changing an organization is often essential for a company to remain competitive. Failure to change may influence the ability of a company to survive. But employees do not always welcome changes in methods. According to a 2007 survey conducted by the Society for Human Resource Management (SHRM), employee resistance to change is one of the top reasons change efforts fail (Anonymous, 2007; Huy, Q. N., 1999). Organizational Change Reactions to change may take many forms. http://open.lib.umn.edu/principlesmanagement/wp-content/uploads/sites/5/2015/03/35755889d76b2534e2f35ce2681c2d8f.jpg Reactions to organizational change  Active resistance - The most negative reaction, rarer, easier to cope with since it is outspoken.  Passive resistance - This may be difficult to detect, takes time to uncover signs of resistance in people.  Compliance - This involves going along with proposed changes with little enthusiasm.  Enthusiastic support - Those who show enthusiastic support are defenders of the new way and actually encourage others around them to give support to the change effort. Organizational Change Active resistance is the most negative reaction to a proposed change attempt. Those who engage in active resistance may sabotage the change effort and be outspoken objectors to the new procedures. In contrast, passive resistance involves being disturbed by changes without necessarily voicing these opinions. Instead, passive resisters may dislike the change quietly, feel stressed and unhappy, and even look for a new job without necessarily bringing their concerns to the attention of decision makers. Organizational Change Compliance, however, involves going along with proposed changes with little enthusiasm. Finally, those who show enthusiastic support are defenders of the new way and actually encourage others around them to give support to the change effort as well. Organizational Change To be successful, any change attempt will need to overcome resistance on the part of employees. Otherwise, the result will be loss of time and energy as well as an inability on the part of the organization to adapt to the changes in the environment and make its operations more efficient. Resistance to change also has negative consequences for the people in question. Organizational Change Why do people resist change? The major reasons for resistance to change are:  Misunderstanding about the need for change/the reason for the change is unclear  Fear of the unknown  Lack of competence  Connected to the old way  Low trust  Poor communication  Changes to routines or etc. Is All Resistance Bad? Resistance to change may be a positive force in some instances. In fact, resistance to change is a valuable feedback tool that should not be ignored. By listening to people and incorporating their suggestions into the change effort, it is possible to make a more effective change. Organizational Change To better facilitate necessary changes, several steps can be taken that have been proved to lower the anxiety of employees and ease the transformation process. Often, the simple act of including employees in the change process can rapidly reduce opposition to new methods. Organizational Change In some organizations, this level of inclusion is not possible, and instead organizations can recruit a small number of opinion leaders to promote the benefits of coming changes. Planning and Executing Change Effectively How do you plan, organize, and execute change effectively? Some types of change, such as mergers, often come with job losses. In these situations, it is important to remain fair and ethical while laying off otherwise exceptional employees. Once change has occurred, it is important to take any steps necessary to reinforce the new system. Employees can often require continued support well after an organizational change. Planning and Executing Change Effectively  One of the most useful frameworks in this area is the three-stage model of planned change developed in the 1950s by psychologist Kurt Lewin.  This model assumes that change will encounter resistance. Therefore, executing change without prior preparation is likely to lead to failure.  Instead, organizations should start with unfreezing, or making sure that organizational members are ready for and receptive to change.  This is followed by change, or executing the planned changes.  Finally, refreezing involves ensuring that change becomes permanent and the new habits, rules, or procedures become the norm. Planning and Executing Change Effectively Three-stage model of planned change – by Kurt Lewin Source: http://thebridgesummit.co/t/noBFbBLS Planning and Executing Change Effectively 1. Unfreezing: Making sure that organization members are ready for and receptive to change by:  Communicating a plan for change  Develop a sense of urgency  Building a coalition  Provide support and Allow employees to participate Planning and Executing Change Effectively Unfreezing Before Change Many change efforts fail because people are insufficiently prepared for change. When employees are not prepared, they are more likely to resist the change effort and less likely to function effectively under the new system. What can organizations do before change to prepare employees? There are a number of things that are important at this stage. Planning and Executing Change Effectively 1.1 Communicating a Plan for Change Do people know what the change entails, or are they hearing about the planned changes through the office gossip? When employees know what is going to happen, when, and why, they may feel more comfortable. When this vision is exciting and paints a picture of a future that employees would be proud to be a part of, people are likely to be more committed to change. Planning and Executing Change Effectively 1.2 Develop a Sense of Urgency People are more likely to accept change if they feel that there is a need for it. If employees feel their company is doing well, the perceived need for change will be smaller. Those who plan the change will need to make the case that there is an external or internal threat to the organization’s competitiveness, reputation, or sometimes even its survival and that failure to act will have undesirable consequences. Planning and Executing Change Effectively 1.3 Building a Coalition To convince people that change is needed, the change leader does not necessarily have to convince every person individually. In fact, people’s opinions toward change are affected by opinion leaders or those people who have a strong influence over the behaviors and attitudes of others (Burkhardt, 1994; Kotter, 1995). Instead of trying to get everyone on board at the same time, it may be more useful to convince and prepare the opinion leaders. Planning and Executing Change Effectively 1.4 Provide Support Management may prepare employees for change by providing: Emotional support may be in the form of frequently discussing the changes, encouraging them by expressing confidence in employees’ ability to perform effectively under the new system; Instrumental support may be in the form of providing a training program to employees so that they know how to function under the new system. Planning and Executing Change Effectively 1.5 Allow Employees to Participate They will feel a sense of ownership of the planned change and are more likely to be on board. For example, assume that a company suspects there are problems with manufacturing quality. To convince them that the problem needs to be solved would be to ask them to take customer calls about the product quality. Once employees experience the problem firsthand, they will be more motivated to solve the problem. Planning and Executing Change Effectively 2. Change: Executing the planned changes by:  Continue to provide support  Create small wins  Eliminate obstacles Planning and Executing Change Effectively Executing Change The second stage of Lewin’s three-stage change model is executing change. At this stage, the organization implements the planned changes on technology, structure, culture, or procedures. The specifics of how change should be executed will depend on the type of change. However, there are three tips that may facilitate the success of a change effort. Planning and Executing Change Effectively 2.1 Continue to Provide Support As the change is under way, employees may experience high amounts of stress. They may make mistakes more often or experience uncertainty about their new responsibilities or job descriptions. Management has an important role in helping employees cope with this stress by displaying support, patience, and continuing to provide support to employees even after the change is complete. Planning and Executing Change Effectively 2.2 Create Small Wins If people see changes, improvements, and successes along the way, they will be inspired and motivated to continue the change effort. For this reason, breaking up the proposed change into phases may be a good idea because it creates smaller targets. Small wins are also important for planners of change to make the point that their idea is on the right track. Early success gives change planners more credibility while early failures may be a setback (Hamel, 2000). Planning and Executing Change Effectively 2.3 Eliminate Obstacles When the change effort is in place, many obstacles may crop up along the way. There may be obstacles rooted in a company’s structure, existing processes, or culture. It is the management’s job to identify, understand, and remove these obstacles (Kotter, 1995). Ideally, these obstacles would have been eliminated before implementing the change, but sometimes unexpected roadblocks emerge as change is under way. Planning and Executing Change Effectively 3. Refreezing: Ensure that change becomes permanent and the new habits, rules, or procedures become the norm by:  Publicize success  Reward change adoption  Embracing continuous change Planning and Executing Change Effectively Refreezing After the change is implemented, the long-term success of a change effort depends on the extent to which the change becomes part of the company’s culture. If the change has been successful, the revised ways of thinking, behaving, and performing should become routine. To evaluate and reinforce (“refreeze”) the change, there are a number of things management can do. Planning and Executing Change Effectively 3.1 Publicize Success To make change permanent, the organization may benefit from sharing the results of the change effort with employees. How much money did the company save? How much did the company’s reputation improve? What was the reduction in accidents after new procedures were put in place? Sharing concrete results with employees increases their confidence that the implemented change was a right decision. Planning and Executing Change Effectively 3.2 Reward Change Adoption To ensure that change becomes permanent, organizations may benefit from rewarding those who embrace the change effort (an aspect of the controlling function). The rewards do not necessarily have to be financial. The simple act of recognizing those who are giving support to the change effort in front of their peers may encourage others to get on board. Planning and Executing Change Effectively 3.3 Embracing Continuous Change When an organization understands that change does indeed occur constantly, it will be in a be