MGT502 Organizational Behavior - Organizational Design - PDF

Organizational Behavior - MGT502 VU Lesson 31 ORGANIZ...

Organizational Behavior - MGT502 VU Lesson 31 ORGANIZATIONAL DESIGN The Basics of Organizational Structure Organizational structure defines how job tasks are formally divided, grouped, and coordinated. The organization chart is a visual representation of this division, grouping, and coordination. Designing an Organization Structure Managers must decide how to divide the overall tasks of the organization into successively smaller jobs. Managers must decide the basis by which to group the individual jobs. Managers must decide the appropriate size of the group reporting to each supervisor Managers must distribute authority among the jobs. Three Types of Relationships: Direct single –Between a manager and each subordinate individually Direct group –Between a manager and each possible permutation of subordinates Cross –Between subordinates and other subordinates The basis by which jobs are grouped together is called T h re e T y p e s o f A u th o rity departmentalization. Every L in e A u th o rity D e fin e s th e re la tio n sh ip b e tw e e n organization will have its own su p e rio r a n d su b o rd in a te. specific way of classifying and grouping work activities S ta ff A u th o rity Is th e a u th o rity to se rve in a n a d viso ry ca p a city. An organizational structure is the formal framework by which job P e rm its sta ff m a n a g e rs to m a ke F u n c tio n a l tasks are divided, grouped, and A u th o rity d e cisio n s a b o u t s p e cific a ctivitie s p e rfo rm e d b y e m p lo ye e s w ith in o th e r coordinated. When managers d e p a rtm e n ts. develop or change an organization's structure, they are engaged in organizational design, a process that involves decisions about six key elements: work Elem ents of specialization, departmentalization, chain of O rganizational Structure command, span of control, centralization and D epartm ent- Span of decentralization, and formalization alization C ontrol O rganizational Work Specialization S tructure E lem ents Early in the twentieth century, Henry Ford used Form alization C entralization this concept in an assembly line where every Ford worker was assigned a specific, repetitive task. By breaking jobs into small standardized tasks, which could be performed over and over again, Ford was able to produce cars at the rate of one every 10 seconds, while using relatively low-skilled workers. © Copyright Virtual University of Pakistan 148 Organizational Behavior - MGT502 VU Today we use the term work specialization to describe the degree to which tasks in an organization are divided into separate jobs. The essence of work specialization is that an entire job is not done by one individual but instead is broken down into steps, and each step is completed by a different person. Individual employees specialize in doing part of an activity rather than the entire activity. During the first half of the twentieth century, managers viewed work specialization as an unending source of increased productivity. And for a time it was! Because it wasn't widely used, when work specialization was implemented, employee productivity rose. By the 1960s, however, it had become evident that a good thing could be carried too far. The point had been reached in some jobs where human diseconomies from work specialization—boredom, fatigue, stress, poor quality, increased absenteeism, and higher turnover—more than offset the economic advantages. In such instances, worker productivity could be increased by enlarging, not narrowing, the scope of job activities. In addition, managers found that employees who were given a variety of work to do, allowed to do the activities necessary to complete a whole job, and put into teams with interchangeable skills often achieved significantly higher output with increased employee satisfaction. Most managers today see work specialization as an important organizing mechanism but not as a source of ever-increasing productivity. They recognize the economies it provides in certain types of jobs, but they also recognize the problems it creates when it's carried to extremes. McDonald's, for example, uses high work specialization to efficiently make and sell its fast-food products, and most employees in health care organizations are specialized. However, other organizations, such as Saturn Corporation, Hallmark, and Ford Australia, have successfully broadened the scope of jobs and reduced work specialization. Functional departmentalization groups jobs by functions performed. This approach can be used in all types of organizations, although the functions change to reflect the organization's objectives and work activities. Product departmentalization groups jobs by product line. In this approach, each major product area is placed under the authority of a manager who's a specialist in, and is responsible for, everything having to do with that product line. Geographical departmentalization groups jobs on the basis of territory or geography such as southern, Midwestern, or northwestern regions for an organization operating only in the United States; or for a global company, maybe U.S., European, Canadian, and Asian-Pacific regions. Process departmentalization groups jobs on the basis of product or customer flow. In this approach, work activities follow a natural processing flow of products or even of customers. Finally, customer departmentalization groups jobs on the basis of common customers who have common needs or problems that can best be met by having specialists for each. Large organizations often combine most or all of these forms of departmentalization. For example, a major Japanese electronics firm organizes each of its divisions along functional lines, its manufacturing units around processes, its sales units around seven geographic regions, and its sales regions into four customer groupings. Two trends are currently popular regarding departmentalization. First, customer departmentalization is increasingly being used as an approach to better monitor customers' needs and to be better able to respond to changes in those needs. For example, L. L. Bean organized around a half-dozen customer groups on the basis of what customers generally purchased. This arrangement allowed the company to better understand its customers and to respond faster to their needs. Second, managers are using cross- functional teams, groups of individuals who are experts in various specialties and who work together. For instance, at Thermos Corporation (known worldwide for its beverage containers and lunch boxes) flexible interdisciplinary teams replaced the old tradition-bound functionally departmentalized structure. One of these teams—the Lifestyle Team—developed a new electric grill that has been extremely popular with consumers. This team of individuals from engineering, marketing, and manufacturing was involved in every aspect of bringing this winning product to market—from defining the target market, to defining the product, to working with manufacturing on a feasible design © Copyright Virtual University of Pakistan 149 Organizational Behavior - MGT502 VU Formalization Formalization refers to the degree to which jobs within the organization are standardized and the extent to which employee behavior is guided by rules and procedures. If a job is highly formalized, then the person doing that job has a minimum amount of discretion over what is to be done, when it's to be done, and how he or she could do it. Employees can be expected to handle the same input in exactly the same way, resulting in consistent and uniform output. In organizations with high formalization, there are explicit job descriptions, numerous organizational rules, and clearly defined procedures covering work processes. Where formalization is low, job behaviors are relatively unstructured and employees have a great deal of freedom in how they do their work. Because an individual's discretion on the job is inversely related to the amount of behavior in that job that is preprogrammed by the organization, the greater the standardization, the less input the employee has into how work is done. Standardization not only eliminates the possibility that employees will engage in alternative behaviors, it even removes the need for employees to consider alternatives. The degree of formalization can vary widely between organizations and even within organizations. For instance, at a newspaper publisher, news reporters often have a great deal of discretion in their jobs. They may pick their news topic, find their own stories, research them the way they want, and write them up, usually within minimal guidelines. On the other hand, the compositors and typesetters who lay out the newspaper pages don't have that type of freedom. They have constraints—both time and space—that standardize how they do their work. Chain of command For many years, the chain-of-command concept was a cornerstone of organizational design. As you'll see, it has far less importance today. But contemporary managers still need to consider its implications when deciding how best to structure their organizations. The chain of command is the continuous line of authority that extends from upper organizational levels to the lowest levels and clarifies who reports to whom. It helps employees answer questions such as "Who do I go to if I have a problem?" or "To whom am I responsible?" You can't discuss the chain of command without discussing three other concepts: authority, responsibility, and unity of command. Authority refers to the rights inherent in a managerial position to tell people what to do and to expect them to do it. To facilitate decision making and coordination, an organization's managers are part of the chain of command and are granted a certain degree of authority to meet their responsibilities. As managers coordinate and integrate the work of employees, those employees assume an obligation to perform any assigned duties. This obligation or expectation to perform is known as responsibility. Finally, the unity of command principle (one of Fayol's 14 principles of management) helps preserve the concept of a continuous line of authority. It states that a person should report to only one manager. Without unity of command, conflicting demands and priorities from multiple bosses can create problems. Early management theorists (Fayol, Weber, Taylor, and others) were enamored with the concepts of chain of command, authority, responsibility, and unity of command. However, times change and so do the basic tenets of organizational design. These concepts are considerably less relevant today because of information technology and employee empowerment. Employees throughout the organization can access information that used to be available only to top managers in a matter of a few seconds. Also, using computers, employees communicate with anyone else anywhere in the organization without going through formal channels—that is, the chain of command. Moreover, as employees are empowered to make decisions that previously were reserved for management, as more organizations use self-managed and cross-functional teams, and as new organizational designs with multiple bosses continue to be © Copyright Virtual University of Pakistan 150 Organizational Behavior - MGT502 VU implemented, the traditional concepts of authority, responsibility, and chain of command are becoming less relevant. Span of control How many employees can a manager efficiently and effectively manage? This question of span of control is important because, to a large degree, it determines the number of levels and managers an organization has. All things being equal, the wider or larger the span, the more efficient the organization. An example can show why. Assume that we have two organizations, both of which have approximately 4,100 employees. If the average manager made $42,000 a year, the organization with the wider span would save over $33 million a year in management salaries alone! Obviously, wider spans are more efficient in terms of cost. However, at some point, wider spans reduce effectiveness. That is, when the span becomes too large, employee performance suffers because managers no longer have the time to provide the necessary leadership and support More Centralization More Decentralization Environment is stable. Lower-level managers are not as capable or Environment is complex, uncertain. experienced at making decisions as upper- Lower-level managers are capable and experienced level managers. at making decisions. Lower-level managers do not want to have a Lower-level managers want a voice in decisions. say in decisions. Decisions are relatively minor. Decisions are significant. Corporate culture is open to allowing managers to Organization is facing a crisis or the risk of have a say in what happens. company failure. Company is geographically dispersed. Company is large. Effective implementation of company strategies Effective implementation of company depends on managers having involvement and strategies depends on managers retaining say flexibility to make decisions. over what happens. Common Organizational Design Simple Structure A structure characterized by a low degree of departmentalization, wide spans of control, authority centralized in a single person, and little formalization. Bureaucracy A structure with highly routine operating tasks achieved through specialization, very formalized rules and regulations, tasks that are grouped into functional departments, centralized authority, narrow spans of control, and decision making that follows the chain of command. Matrix Structure Strengths Weaknesses A structure that creates dual lines of – Functional – Subunit conflicts authority and combines functional and economies of scale with organizational product departmentalization – Minimum duplication goals of personnel and – Obsessive concern equipment with rules and Matrix Organizational Design – Enhanced regulations Rejects the unity of command communication – Lack of employee principal – Centralized decision discretion to deal with problems Uses multiple authority structures, making so that many people report to two managers People from different functional areas work on various projects © Copyright Virtual University of Pakistan 151 Organizational Behavior - MGT502 VU Lesson 32 WORK DESIGN AND TECHNOLOGY Overview This lecture considers the creation and use organizational structure and culture to manage individuals and inter-group relations effectively, particularly between different functions and divisions. It describes how managers group people and resources, integrate people and groups to stimulate them to work together, and how organizational values and norms influence inter-group relationships and organizational effectiveness. Managers try to: encourage employees to work hard, develop supportive work attitudes, and allow people and groups to cooperate and work The Matrix Structure together effectively. An organization’s structure and culture affect the way people and groups behave. Cross-Functional Clear Organizational structure is the formal system Coordination Accountability of task and reporting relationships that controls, coordinates, and motivates employees so they cooperate and work together to achieve Dual Chain Allocation organizational goals. of Command of Specialists Organizational culture is the informal set of values and norms that controls how people and groups interact with others inside and outside the organization. Because structure and culture affect attitudes, behaviors, and goals, organizations base design decisions on desired behaviors, attitudes, and goals. Organizational design is the selection and management of various dimensions of structure and culture to achieve goals. Design decisions consider contingencies, possible events to be considered in planning. Three major contingencies that determine organizational structure and culture include: environment, technology, and strategy. Four Symptoms of Structural Weakness Delay in decision making Overloaded hierarchy; information funneling limited to too few channels Poor quality decision making Right information not reaching right people in right format Lack of innovative response to changing environment No coordinating effort High level of conflict Departments work against each other, not for organizational goals Environmental Factors In order to correctly identify opportunities and monitor threats, the company must begin with a thorough understanding of the environment in which the firm operates. The management environment consists of all the actors and forces outside management that affect the management’s ability to develop and maintain successful relationships with its all factors. Though these factors and forces may vary depending on the specific company and industrial group, they can generally be divided into broad micro environmental and macro environmental components. For most companies, the micro environmental © Copyright Virtual University of Pakistan 152 Organizational Behavior - MGT502 VU components are: the company, suppliers, management channel firms (intermediaries), customer markets, competitors, and publics. The macro environmental components are thought to be: demographic, economic, natural, technological, political, and cultural forces. The wise management manager knows that he or she cannot always affect environmental forces. Smart managers can take a proactive, rather than reactive, approach to the management environment. As a company’s management collects and processes data on these environments, it must be ever vigilant in its efforts to apply what it learns to developing opportunities and dealing with threats. Studies have shown that excellent companies not only have a keen sense of customer but an appreciation of the environmental forces swirling around them. By constantly looking at the dynamic changes that are occurring in the aforementioned environments, companies are better prepared to adapt to change, prepare long-range strategy, meet the needs of today’s and tomorrow’s customers, and compete with the intense competition present in the global marketplace. 1. Environmental Uncertainty – Exists when managers have little information about environmental events and their impact on the organization. – When the organizational environment is complex and dynamic, the manager may have little information about future events and have great difficulty predicting them. 2. Environmental Complexity – The number of environmental components that effects on organizational decision making. 3. Environmental Dynamism – The degree to which these components change. Technology in the Workplace Org. Environment & Structure 1. We defined the term Dynamic Stable technology earlier to Steady conditions, High rate of change mean "how an predictable change Use organic structure Use mechanistic structure organization transfers its inputs into outputs." Complex Simple 2. Today it is also Many elements (such as Few environmental widely used to stakeholders) elements describe machinery Decentralize Less need to decentralize and equipment that use sophisticated electronics and computers to Org. Environment & Structure produce those (con’t) outputs. Diverse Integrated 3. The common theme Variety of products, of these clients, locations Single product, client, location technologies is that Divisional form aligned Don’t need divisional form they substitute for with the diversity human labor in the transformation of Hostile Munificent inputs into outputs. Competition and resource Plenty of resources and This has been scarcity product demand Use organic structure for Less need for organic happening since the responsiveness structure mid 1800s. © Copyright Virtual University of Pakistan 153 Organizational Behavior - MGT502 VU 4. We are concerned about the behavior of people at work—it is important to discuss how recent advances in technology are changing the work place and the work lives of employees. Process Reengineering 1. Process reengineering is described as "considering how things would be done if you could start all over from scratch." It comes from the process of taking apart an electronics product and designing a better version. 2. Michael Hammer coined the term as applied to organizations. Reengineering means management should start with a clean sheet of paper—rethinking and redesigning those processes by which the organization creates value and does work, ridding itself of operations that have become antiquated in the computer age. Three key elements: Identifying an organization’s distinctive competencies, assessing core processes, and reorganizing horizontally by process a. Distinctive competencies define what it is that the organization is more superior at delivering than its competition. b. Superior store locations, a more efficient distribution system, higher-quality products, more knowledgeable sales personnel, or superior technical support Core processes transform materials, capital, information, and labor into products and services that the customer values. a. These range from strategic planning to after-sales customer support; management can determine to what degree each adds value. b. Process value analysis typically uncovers a whole lot of activities that add little value. Reengineering requires management to reorganize around horizontal processes. a. This means cross-functional and self-managed teams b. It means focusing on processes rather than functions. c. One of the goals of reengineering is to minimize the necessary amount of management. Downsizing and Rightsizing Downsizing (rightsizing) involves reducing the size of the organization by selling off or closing down units or product lines to increase profitability. Probably will call for a change in structure. Mergers and Acquisitions ƒ The search for competitiveness may call for the joining of two or more firms through Mergers and Acquisitions. ƒ The challenge for these firms is to find a structure that works for the combined entity. What’s an e-Organization? 1. E-commerce refers to the sales side of electronic business. For example, people shopping in the Internet, businesses setting up web sites, fulfilling orders and getting paid are all parts of e- commerce. It is a subset of e-business. 2. E-business is the full breadth of activities included in a success Internet-based enterprise. It includes: a. Developing strategies for running an Internet based business. b. Improving communication between employees, suppliers and customers. c. Collaborating with partners. 3. E-organizations refer to the applications of e-business concepts to all organizations. © Copyright Virtual University of Pakistan 154 Organizational Behavior - MGT502 VU 4. The e-organization has three underlying components: The Internet—a world wide network of interconnected computers Intranets—an organization’s private Internet Extranets—extended Intranets accessible only to selected employees and authorized outsiders. Selected Implications for Individual Behavior Business-to-Consumer (B2C) Ethics Basic Forms ƒ How do e-orgs affect employee behavior? of Electronic Since e-orgs refer to a range of technology Commerce applications. The more an organization uses Business-to-Business global and private network linkages, the more (B2B) the comments below are applicable to employees. Motivation ƒ Employees are more susceptible to distractions that can undermine their work effort and reduce their productivity. For example, cyber loafing. Decision Making ƒ Cyber loafing refers to using the organization’s Internet access during formal work hours to surf non-job related Web sites or sending/receiving personal email. ƒ If work is not interesting workers may be motivated to “do something else”—often surfing the Internet is the diversion. Solutions are to make jobs more interesting, provide formal breaks, and set out explicit guidelines for behavior. ƒ Electronic surveillance of employees is an issue that puts an organization’s desire for control against an employee’s right to privacy. ƒ Employers argue they need those controls. Forty one and one-half percent of U.S. employers actively monitor or restrict employees’ Web activity. They say controls allow them to make sure employees are not goofing off, not distributing company secrets, and preventing hostile work environments. ƒ Most would agree that employees should not use the employer’s equipment for unauthorized purposes—and when they know they are being watched—but with home and work life becoming increasingly intermingled the ethics of the practice are less clear. Selected Implications for Group Behavior On-line leadership differs from face-to-face leadership. Three other issues: decision making, communication, and organizational politics take on a different look in e-organizations. 1. Decision Making: The traditional method taken in OB when discussing decision making needs to be modified. Two projections: a. Group decision-making models will take on greater relevance. b. Rational models will be replaced by action models. Decisions in e-organizations will most often need to be made fast with little previous experience. The firms will need to recover fast from mistakes. 2. Communication: Traditional hierarchical levels no longer constrain communication. Employees are encouraged to communicate instantly, anytime with anyone. Concepts such as the distinction between forma and informal networks, nonverbal communication, and filtering become obsolete. Activities such as meetings, negotiations, and supervision are also redefined. © Copyright Virtual University of Pakistan 155 Organizational Behavior - MGT502 VU Gossip can be shared electronically; websites can be grapevines. The downside is that employees are experiencing communication overload. 3. Politics and Networking: Cyber-schmoozing—or on-line networking—activities are necessary in addition to traditional face-to-face impression management techniques. Work Space Design This topic is concerned with the workspace made available to employees and how it may affect an employee’s behavior. 1. Size: Size is defined by the square feet per employee. Historically, the most important determinant of space provided to employees was status. This no longer seems to be true. Organizations seeking to become more egalitarian are reducing space dedicated to specific employees, lessening or eliminating space allocations based on hierarchical position, etc. Over the past decade, the personal office space is estimated to have shrunk 25–50 percent. a. Part of this has been economically motivated. b. Much of this reduction can be traced to reengineering. The trend today is toward setting extra space aside where people can meet and teams can work. 2. Arrangement: Arrangement refers to the distance between people and facilities. This is important primarily because it significantly influences social interaction. Research supports that you are more likely to interact with those individuals who are physically close. Furniture arrangements in traditional offices have received considerable attention. Work Redesign Options Job Rotation: The periodic shifting of a worker from one task to another. Job Enlargement: The horizontal expansion of jobs. Job Enrichment: The vertical expansion of jobs. Work Schedule Options Flextime: Employees work during a common core time period each day but have discretion in forming their total workday from a flexible set of hours outside the core. Job Sharing: The practice of having two or more people split a 40-hour-a-week job. Telecommuting: Employees do their work at home on a computer that is linked to their office. © Copyright Virtual University of Pakistan 156 Organizational Behavior - MGT502 VU Lesson 33 HUMAN RESOURCE POLICIES AND PRACTICES Human Resource Management “Managerial function that tries to match an organization’s needs to the skills and abilities of its employees” What is Human Resource Management? Conducting job analysis Planning labor needs Selecting job candidates Orienting and training new employees Managing wages and salaries Providing incentives and benefits Appraising performance Communicating Training and developing Building employee commitment Why Is HR Management Important to All Managers? Helps you avoid common personnel mistakes: ƒ Hiring the wrong person for the job ƒ Experiencing high turnover ƒ Finding your people not doing their best ƒ Wasting time with useless interviews ƒ Having your company taken to court because of your discriminatory actions ƒ Having your company cited for bad reputation HRM Activities 1. Getting people 2. Preparing people 3. Stimulating people 4. Keeping people 1. Staffing (Getting people) Strategic human resource planning Recruiting Selection Staffing Activities Employment planning – Strategic goals and objectives – Job requirements change Job analysis – Job description © Copyright Virtual University of Pakistan 157 Organizational Behavior - MGT502 VU – Job skills Recruiting Selection 2. Training and Development (Preparing people) Orientation Training Development – Employee – Career – Organization Training and Development Goals Adapt to new surroundings Cope with change Meet organizational needs 3. Motivation (Stimulating people) Job design Performance appraisals Rewards and compensation Employee benefits Motivation Goal Competent and adapted employees With up-to-date skills, knowledge, abilities Exerting high energy levels Motivation Implications – Individual – Managerial – Organizational Performance – Willingness – Ability Respect 4. Maintenance (Keeping people) Health and safety Communications Employee relations © Copyright Virtual University of Pakistan 158 Organizational Behavior - MGT502 VU Maintenance Health Safety Communications Employee assistance programs Environment where employee voices are heard National Culture Political Economic Forces System Human Resource System Policies / Procedures Recruitment Selection Motivation/Reward System Corporate Management Style Culture Training Legal Labor Forces Traditions © Copyright Virtual University of Pakistan 159 Organizational Behavior - MGT502 VU The Organization Strategic Partners Suppliers Productivity Stockholders & Investors Unions Profits Survival Shareholders return Customers Return on sales Return on investments Society HRM Legal compliance Customers Social responsibility Quality service Ethical management Employees Quality Products Fair treatment Speed & Responsiveness Satisfaction Low cost Empowerment Innovation Safety & Health Managing Human Resources for This Era Organizational ability To Attract To Develop To Motivate and To Keep talented people Successful HRM Organization: High level of profitability, Higher annual sales per employee, High market value. Employee: More employment security, More job opportunities, High wages. Society: Elevating the standard of living, Strengthening ethical guidelines. Job analysis Job Analysis is the SYSTEMATIC process of collecting and making judgments about all the important information related to a job. © Copyright Virtual University of Pakistan 160 Organizational Behavior - MGT502 VU HR Equal Planning Recruitment Selection Employm ent HR HR Research Job Analysis Development Employee Compens Performa & Labor Safety & nce Health ation Relations & Appraisal Benefits Job analysis outcomes * Job description * Job specification * Job evaluation © Copyright Virtual University of Pakistan 161 Organizational Behavior - MGT502 VU Lesson 34 HUMAN RESOURCE POLICIES AND PRACTICES Job Analysis Job analysis is the procedure through which you determine the duties and nature of the jobs and the kinds of people who should be hired for them. You can utilize the information it provides to write job descriptions and job specifications, which are utilized in recruitment and selection, compensation, performance appraisal, and training. I. Steps in Job Analysis Job Analysis process has following steps: a. Identify how the information will be used because that will determine what data will be collected and how it should be collected. Interviewing and position analysis questionnaire are some examples of data collection techniques. b. Review relevant background information, such as organization charts, process charts, and job descriptions. c. Select representative positions to analyze because there may be too many similar jobs to analyze, and it may not be necessary to analyze them all. d. Analyze the job by collecting data on job activities, required employee behaviors, working conditions, and human traits and abilities needed to perform the job. e. Review and verify the job analysis information with job incumbents to confirm that it is factually correct and complete. f. Develop a job description and job specification from the job analysis information. II. Job Analysis Methods Job analysis traditionally has been conducted in a number of different ways. Also, firms differ in their needs and in the resources they have for conducting job analysis. Methods of Collecting Job Analysis Information Introduction ƒ An HR specialist (an HR specialist, job analyst, or consultant), a worker, and the worker’s supervisor usually work together in conducting the job analysis. ƒ Job analysis data is usually collected from several employees from different departments, using interviews and questionnaires. The data is then averaged, taking into account the departmental context of the employees, to determine how much time a typical employee spends on each of several specific tasks. a. The Interview 1. The three types of interviews managers use to collect job analysis data are: individual (to get the employee’s perspective on the job’s duties and responsibilities, group (when large numbers of employees perform the same job), and supervisor (to get his/her perspective on the job’s duties and responsibilities). 2. The pros of using an interview are that it is: simple, quick, and more comprehensive because the interviewer can unearth activities that may never appear in written form. 3. The following questions are some examples of typical questions. “What is the job being performed?” “In what activities do you participate?” “What are the health and safety conditions?” Figure 3-3 gives an example of a job analysis questionnaire. 4. The following are interview guidelines: a) the job analyst and supervisor should identify the workers who know the job best and would be objective; b) establish a rapport with the interviewee; c) follow a structured guide or checklist; d) ask worker to list duties in order of importance and frequency of occurrence; and e) review and verify the data. © Copyright Virtual University of Pakistan 162 Organizational Behavior - MGT502 VU b. Questionnaire 1. Structured or unstructured questionnaires may be used to obtain job analysis information 2. Questionnaires can be a quick, efficient way of gathering information from a large number of employees. But, developing and testing a questionnaire can be expensive and time consuming. c. Observation 1. Direct observations are useful when jobs consist of mainly observable physical activity as opposed to mental activity. 2. Reactivity can be a problem with direct observations, which is where the worker changes what he/she normally does because he/she is being watched. 3. Managers often use direct observation and interviewing together. d. Participant Diary / Logs 1. The employee records every activity he/she engages in, in a diary or log along with the amount of time to perform each activity to produce a complete picture of the job. 2. Employees may try to exaggerate some activities and underplay others. e. Quantitative Job Analysis Techniques 1. Position Analysis Questionnaire (PAQ) is a questionnaire used to collect quantifiable data concerning the duties and responsibilities of various jobs, see Figure 3-5, on five basic activities: a) having decision-making/communication/social responsibilities, b) performing skilled activities, c) being physically active, d) operating vehicles/equipment, and e) processing information. 2. Department of Labor Procedure (DOL) is a standardized method for rating, classifying, and comparing virtually every kind of job based on data, people, and things. Table 3-1 shows a set of basic activities, and Figure 3-6 gives a sample summary. 3. Functional job analysis: 1) rates a job on data; people; things; the extent to which specific instructions are necessary to perform the task; the extent to which reasoning and judgment are required to perform the task; and mathematical ability required to perform the task; and 2) identifies performance standards and training requirements. f. Using Multiple Sources of Information Likely, no one job analysis method will be used exclusively. A combination is often more appropriate. 1. Where possible, collect job analysis data using several types of collection techniques and respondents. 2. Potential inaccuracies in peoples’ judgments could lead to inaccurate conclusions III. Source of Data Main sources of collection of data for job analysis are as following: Employees Supervisor Manager Job Analyst Job Analyst (HR) Outside consultant Supervisor/Manager IV. Problems with Job Analysis Too lengthy Time consuming and requires much patience Might be a reflection of stereotypes © Copyright Virtual University of Pakistan 163 Organizational Behavior - MGT502 VU V. Job analysis outcomes a. Job description The job description is a document that provides information regarding the tasks, duties, and responsibilities of the job. Job description takes on an even greater importance under the Americans with Disabilities Act because the description of essential job functions may be critical to a defense regarding reasonable accommodation. 1. Job Identification – contains the job title, the FLSA status, date, and possible space to indicate who approved the description, the location of the job, the immediate supervisor’s title, salary and/or pay scale. 2. Job Summary – should describe the general nature of the job, and includes only its major functions or activities. 3. Relationships – occasionally a relationships statement is included. It shows the jobholders’ relationships with others inside and outside the organization. 4. Responsibilities and Duties – The Department of Labor’s Dictionary of Occupational Titles can be used for itemizing the job’s duties and responsibilities. 5. Standards of Performance – states the standards the employee is expected to achieve under each of the job description’s main duties and responsibilities. b. Job specification Minimum acceptable qualifications that a person should possess to perform the job are included in the job specification. Some of the items often included are requirements for education, experience, personality, and physical abilities. c. Job evaluation In Job Evaluation process the worth of job is identified based upon job comparability and according to worth, importance of job and relative value Compensation is designed and selected. © Copyright Virtual University of Pakistan 164 Organizational Behavior - MGT502 VU Lesson 35 HUMAN RESOURCE POLICIES AND PRACTICES Overview In this lecture, we first discuss the concept of career, career planning and development. Next, we distinguish between job security and career security. Then, we identify several factors that affect career planning and discuss both individual and organizational career planning. We next address career paths and discuss career development, then, career planning and development methods are described. We devote the last part of the chapter to a discussion of developing unique segments of the workforce. A. Career Career can be defined as a general course of action a person chooses to pursue throughout his or her working life I. Career planning Career planning is an ongoing process through which an individual sets career goals and identifies the means to achieve them. The process by which individuals plan their life’s work is referred to as career planning. Through career planning, a person evaluates his or her own abilities and interests, considers alternative career opportunities, establishes career goals, and plans practical developmental activities. Usually, career planning programs are expected to achieve one or more of the following objectives: 1. More effective development of available talent. 2. Self-appraisal opportunities for employees considering new or nontraditional career paths. 3. More efficient development of human resources within and among divisions and/or geographic locations. 4. A demonstration of a tangible commitment to EEO and affirmative action. 5. Satisfaction of employees’ personal development needs. 6. Improvement of performance through on-the-job training experiences provided by horizontal and vertical career moves. 7. Increased employee loyalty and motivation, leading to decreased turnover. 8. A method of determining training and development needs. ƒ Individual career planning—Career planning begins with self-understanding. Then, the person is in a position to establish realistic goals and determine what to do to achieve these goals. Learning about oneself is referred to as self-assessment. Some useful tools include a strength/weakness balance sheet and a likes and dislikes survey. 1. Strength/weakness balance sheet: A self-evaluation procedure assists people in becoming aware of their strengths and weaknesses. 2. Likes and dislikes survey: A procedure that assists individuals in recognizing restrictions they place on themselves. ƒ Career Assessment On The Web—The Web has numerous tests and assessments sites available to assist job seekers. ƒ Organizational Career Planning—The process of establishing career paths within a firm. II. Career Paths Career paths have historically focused on upward mobility within a particular occupation. One of four types of career paths may be used: traditional, network, lateral, and dual. © Copyright Virtual University of Pakistan 165 Organizational Behavior - MGT502 VU a. Traditional Career Path—An employee progresses vertically upward in the organization from one specific job to the next. b. Network Career Path—A method of career pathing that contains both a vertical sequence of jobs and a series of horizontal opportunities. c. Lateral Skill Path—Traditionally, a career path was viewed as moving upward to higher levels of management in the organization. The availability of the previous two options has diminished considerably in recent years. But this does not mean that an individual has to remain in the same job for life. There are often lateral moves within the firm that can be taken to allow an employee to become revitalized and find new challenges. d. Dual-Career Path— A career-path method, that recognizes that technical specialists can and should be allowed to continue to contribute their expertise to a company without having to become managers. e. Adding Value To Retain Present Job—Regardless of the career path pursued, today’s workers need to develop a plan whereby they are viewed as continually adding value to the organization. If employees cannot add value, the company does not need them, and much of the evolving work environments cannot use them either. Workers must anticipate what tools will be needed for success in the future and obtain these skills. These workers must look across company lines to other organizations to determine what skills are transferable, and then go and get them. Essentially, today’s workers must manage their own careers as never before. f. Demotion—Demotions have long been associated with failure, but limited promotional opportunities in the future and the fast pace of technological change may make them more legitimate career options. III. Career Development A formal approach taken by an organization to help people acquire the skills and experiences needed to perform current and future jobs is termed as career development. Company’s policies especially policies regarding promotion, counseling the employees, opportunities to excel in future help employees to develop their career. Consist of skills, education and experiences as well as behavioral modification and refinement techniques that allow individuals to work better and add value. Career development is an ongoing organized and formalized effort that recognizes people as a vital organizational resource. It differs from training in that it has a wider focus, longer time frame, and broader scope. The goal of training is improvement in performance; the goal of development is enrichment and more capable workers. Recently, career development has come to be seen as a means for meeting both organizational and employee needs, as opposed to solely meeting the needs of the organization as it had done in the past. Now, organizations see career development as a way of preventing job burnout, providing career information to employees, improving the quality of work lives and meeting affirmative action goals. That is, career development must be seen as a key business strategy if an organization wants to survive in an increasingly competitive and global business environment. IV. Career Planning and Development Methods There are numerous methods for career planning and development. Some currently utilized methods, most of which are used in various combinations, are discussed next. a. Discussions with Knowledgeable Individuals—In a formal discussion, the superior and subordinate may jointly agree on what type of career planning and development activities are best. In other instances, psychologists and guidance counselors provide this service. In an academic setting, colleges and universities often provide career © Copyright Virtual University of Pakistan 166 Organizational Behavior - MGT502 VU planning and development information to students. Students often go to their professors for career advice. b. Company Material—Some firms provide material specifically developed to assist their workers in career planning and development. Such material is tailored to the firm’s special needs. In addition, job descriptions provide valuable insight for individuals to personally determine if a match exists with their strengths and weaknesses and specific positions considered. c. Performance Appraisal System—The firm’s performance appraisal system can also be a valuable tool in career planning and development. Noting and discussing an employee’s strengths and weaknesses with his or her supervisor can uncover developmental needs. If overcoming a particular weakness seems difficult or even impossible, an alternate career path may be the solution. d. Workshops—Some organizations conduct workshops lasting two or three days for the purpose of helping workers develop careers within the company. Employees define and match their specific career objectives with the needs of the company. At other times, workshops are available in the community that the company may send the worker to or workers may initiate the visit themselves. e. Personal Development Plans (PDP)—Many employers encourage employees to write their own personal development plans. This is a summary of a person’s personal development needs and an action plan to achieve them. Workers are encouraged to analyze their strengths and weaknesses. f. Software Packages—Some software packages assist employees in navigating their careers. g. Career Planning Web Sites—There are numerous Web sites available that provide career planning and career counseling as well as career testing and assessment. V. Challenges in Career Development While most business people today agree that their organizations should invest in career development, it is not always clear exactly what form this investment should take. Before putting a career development program in place, management needs to consider three major challenges. a. Who Will Be Responsible? Many modern organizations have concluded that employees must take an active role in planning and implementing their own personal development plans. Situations have led companies to encourage their employees to take responsibility for their own development; these may include mergers, acquisitions, downsizing, and employee empowerment. However, employees need at least general guidance regarding the steps they can take to develop their careers, both within and outside the company. b. How Much Emphasis Is Appropriate? Too much emphasis on career enhancement can harm an organization's effectiveness. Employees with extreme career orientation can become more concerned about their image than their performance. Some warning signs a manager should be on the lookout for include a heavy focus on advancement opportunities, managing impressions, and socializing versus job performance. Serious side effects of career development programs include employee dissatisfaction, poor performance, and turnover in the event that it fosters unrealistic expectations for advancement. © Copyright Virtual University of Pakistan 167 Organizational Behavior - MGT502 VU c. How Will The Needs of a Diverse Work Force Be Met? Companies need to break down the barriers some employees face in achieving advancement in order to meet the career development needs of today's diverse work force. In 1991, a government study revealed that women and minorities are frequently excluded from the informal career development activities like networking, mentoring, and participation in policy-making committees. Perhaps the best way a company can ensure that women and minorities have a fair chance at managerial and executive positions is to design a broad-based approach to employee development that is anchored in education and training. Another employee group that may need special consideration consists of dual-career couples. Common organizational approaches that are becoming increasingly popular in dealing with the needs of dual career couples are flexible work schedules, telecommuting, and the offering of child-care services. Some companies have also been counseling couples in career management. VI. Meeting the Challenges of Effective Career Development Creative decision making is a must in designing and implementing an effective development program. The three phases of development often blend together in a real life program. These three phases include the assessment phase, the direction phase, and the development phase. a. The Assessment Phase The assessment phase involves activities ranging from self-assessment to organizationally provided assessment. The goal of both of these types of assessment is to identify employees' strengths and weaknesses. 1. Self-assessment 2. Organizational assessment b. The Direction Phase This involves determining the type of career that employees want and the steps they must take to make their career goals a reality. 1. Individual career counseling 2. Information services c. The Development Phase The development phase is taking actions to create and increase skills to prepare for future job opportunities and is meant to foster this growth and self-improvement. 1. Mentoring & Coaching: It has become increasingly clear over the years that employees who aspire to higher management levels in the organization often need the assistance and advocacy of someone higher up in the organization. When senior employee takes an active role in guiding another individual, we refer to this activity as mentoring and coaching. This can occur at any level and can be most effective when the two individuals do not have any type of reporting relationship. 2. Job rotation: Involves moving employees from one job to another for the purpose of providing them with broader experience. © Copyright Virtual University of Pakistan 168 Organizational Behavior - MGT502 VU 3. Tuition assistance programs: To help individuals plan their careers, organizations try to provide additional information in order to have better choice of the career. Self-Development When an employer does not routinely offer development programs, it is essential that employees work out their own development plan. Planning for your career should include a consideration of how you can demonstrate that you make a difference to the organization. Development Suggestions Development suggestions focus on personal growth and direction. These suggestions include statements such as "Create your own personal mission statement." Advancement Suggestion Advancement suggestions focus on the steps that employees can take to improve their chances of being considered for advancement. These suggestions include statements such as "Remember that performance in your function is important, but interpersonal performance is critical." VII. Career-Impacted Life Stages Each person’s career goes through stages that influence an individual’s knowledge of, and preference for, various occupations. People change constantly and, thus, view their careers differently at various stages of their lives. Some of these changes result from the aging process and others from opportunities for growth and status. The main stages of the career cycle include the growth, exploration, establishment, maintenance, and decline. a. Growth stage: The growth stage is roughly from birth to age 14 and is a period during which an individual develops a self-concept by identifying and interacting with other people. Basically, during this stage an individual establishes his or her identity. b. Exploration stage: The exploration stage is the period roughly from ages 15 to 24, during which an individual seriously explores various occupational alternatives. The person attempts to match these occupational alternatives with his or her own interests and abilities resulting from education, leisure activities, and work. c. Establishment stage: The establishment stage is roughly from ages 25 to 44 and is the primary part of most people’s work lives. Hopefully, during this period, a suitable occupation is found and the person engages in those activities that help earn a permanent career. During this period, the individual is continually testing personal capabilities and ambitions against those of the initial occupational choice. d. Maintenance stage: Between the ages of 45 to 65, many people move from the stabilization sub stage into the maintenance stage. During maintenance, the individual has usually created a place in the work world, and most efforts are directed at maintaining the career gains earned. e. Decline stage: As retirement becomes an inevitable reality, in the decline stage, there is frequently a period of adjustment, where many begin to accept reduced levels of power and responsibility. © Copyright Virtual University of Pakistan 169 Organizational Behavior - MGT502 VU Lesson 36 ORGANIZATIONAL CULTURE Overview Employees form an overall subjective perception of the organization based on such factors as degree of risk tolerance, team emphasis, and support of people. This overall perception becomes, in effect, the organization’s culture or personality. These favorable or unfavorable perceptions then affect employee performance and satisfaction, with the impact being greater for stronger cultures. Just as people’s personalities tend to be stable over time, so too do strong cultures. This makes strong cultures difficult for managers to change. When a culture becomes mismatched to its environment, management will want to change it. However, as the Point-Counterpoint debate for this chapter demonstrates, changing an organization’s culture is a long and difficult process. The result, at least in the short term, is that managers should treat their organization’s culture as relatively fixed. One of the more important managerial implications of organizational culture relates to selection decisions. Hiring individuals whose values do not align with those of the organization is likely to lead to employees who lack motivation and commitment and who are dissatisfied with their jobs and the organization. Not surprisingly, employee “misfits” have considerably higher turnover rates than individuals who perceive a good fit. We should also not overlook the influence socialization has on employee performance. An employee’s performance depends to a considerable degree on knowing what he should or should not do. Understanding the right way to do a job indicates proper socialization. Furthermore, the appraisal of an individual’s performance includes how well the person fits into the organization. Can he or she get along with coworkers? Does he/she have acceptable work habits and demonstrate the right attitude? These qualities differ between jobs and organizations. For instance, on some jobs, employees will be evaluated more favorably if they are aggressive and outwardly indicate that they are ambitious. On another job, or on the same job in another organization, such an approach may be evaluated negatively. As a result, proper socialization becomes a significant factor in influencing both actual job performance and how it is perceived by others. Organizational Culture “The set of shared, taken-for-granted implicit assumptions that a group holds and that determines how it perceives, thinks about, and reacts to its various environments” Culture Is a Descriptive Term 1. Organizational culture is concerned with how employees perceive its characteristics, not if they like them. Research on organizational culture has sought to measure how employees see their organization. 2. Job satisfaction seeks to measure affective responses to the work environment, such as how employees feel about the organization’s expectations, reward practices, etc. 3. Organizational culture is descriptive, while job satisfaction is evaluative. Definition of Organizational Culture 1. Organizational Culture is the set of values, often taken for granted, that help people in an organization understand which actions are considered acceptable and which are considered unacceptable. 2. Values are often communicated through stories and other symbolic means. © Copyright Virtual University of Pakistan 170 Organizational Behavior - MGT502 VU Do Organizations Have Uniform Cultures? 1. Individuals with different backgrounds or at different levels in the organization will tend to describe the organization’s culture in similar terms. 2. There can be subcultures. Most large organizations have a dominant culture and numerous sets of subcultures. 3. A dominant culture expresses the core values that are shared by a majority: An organization’s culture is its dominant culture. This macro view of culture that gives an organization its distinct personality. 4. Subcultures tend to develop in large organizations to reflect common problems, situations, or experiences that members face: Defined by department designations and geographical separation It will include the core values plus additional values unique to members of the subculture. The core values are essentially retained but modified to reflect the subculture. 5. If organizations had no dominant culture and were composed only of numerous subcultures, the value of organizational culture as an independent variable would be significantly lessened: It is the “shared meaning” aspect of culture that makes it such a potent device for guiding and shaping behavior. We cannot ignore the reality that many organizations also have subcultures that can influence the behavior of members. Strong vs. Weak Cultures The argument is that strong cultures have a greater impact on employee behavior and are more directly related to reduce turnover: The organization’s core values are both intensely held and widely shared. A strong culture will have a great influence on the behavior of its members because the high degree of shared-ness and intensity creates an internal climate of high behavioral control. One specific result of a strong culture should be lower employee turnover. A high agreement about what the organization stands for builds cohesiveness, loyalty, and organizational commitment. What Do Cultures Do? Benefits of Strong Corporate Culture’s Functions Cultures Social Control 1. It has a boundary-defining role. It creates Strong distinctions between one organization and Organizational Social others. Glue Culture 2. It conveys a sense of identity for Aids organization members. Sense-Making 3. Culture facilitates commitment to something larger than one’s individual self-interest. 4. Culture is the social glue that helps hold the organization together. It enhances social system stability. 5. Culture serves as a sense-making and control mechanism that guides and shapes the attitudes and behavior of employees. This last function is of particular interest to us: Culture by definition is elusive, intangible, implicit, and taken for granted. Every organization develops a core set of assumptions, understandings, and implicit rules that govern day-to-day behavior in the workplace. 6. The role of culture in influencing employee behavior appears to be increasingly important. The shared meaning of a strong culture ensures that everyone is pointed in the same direction. © Copyright Virtual University of Pakistan 171 Organizational Behavior - MGT502 VU 7. Who receives a job offer to join the organization, who is appraised as a high performer, and who gets the promotion is strongly influenced by the individual-organization “fit.” Culture as a Liability 1. We are treating culture in a nonjudgmental manner. 2. Culture enhances organizational commitment and increases the consistency of employee behavior, but there are potentially dysfunctional aspects of culture.]] 3. Barrier to change: Culture is a liability when the shared values are not in agreement with those that will further the organization’s effectiveness. This is most likely to occur when an organization’s environment is dynamic. This helps to explain the challenges that executives at companies like Mitsubishi, General Motors, Eastman Kodak, Kellogg, and Boeing have had in recent years in adapting to upheavals in their environment. 4. Barrier to diversity: Hiring new employees who, because of race, gender, disability, or other differences, are not like the majority of the organization’s members creates a paradox. Management wants new employees to accept the organization’s core cultural values but, at the same time, they want to support the differences that these employees bring to the workplace. Strong cultures put considerable pressure on employees to conform. They limit the range of values and styles that are acceptable. Organizations seek out and hire diverse individuals because of their alternative strengths, yet these diverse behaviors and strengths are likely to diminish in strong cultures. Strong cultures, therefore, can be liabilities when: b. They effectively eliminate the unique strengths that diverse people bring to the organization. b. They support institutional bias or become insensitive to people who are different. 5. Barrier to acquisitions and mergers: Historically, the key factors that management looked at in making acquisition/merger decisions: a. Financial advantages b. Product synergy Cultural compatibility has become the primary concern. Whether the acquisition actually works seems to have more to do with how well the two organizations’ cultures match up. How Employees Learn Culture Stories 1. During the days when Henry Ford II was chairman of the Ford Motor Co., the message was Henry Ford II ran the company. 2. Nordstrom employees are fond of the story when Mr. Nordstrom instructed the clerk to take the tires back and provide a full cash refund. After the customer had received his refund and left, the perplexed clerk looked at the boss. “But, Mr. Nordstrom, we don’t sell tires!,” “I know,” replied the boss, “but we do whatever we need to do to make the customer happy. 3. Stories such as these typically contain a narrative of events about the organization’s founders, rule breaking, rags-to-riches successes, reductions in the workforce, relocation of employees, reactions to past mistakes, and organizational coping. 4. They anchor the present in the past and provide explanations and legitimacy for current practices: For the most part, these stories develop spontaneously. 5. Some organizations actually try to manage this element of culture learning. © Copyright Virtual University of Pakistan 172 Organizational Behavior - MGT502 VU Rituals 1. Rituals are repetitive sequences of activities that express and reinforce the key values of the organization, what goals are most important, which people are important, and which are expendable. 2. College faculty members undergo a lengthy ritual in their quest for permanent employment— tenure. The astute faculty member will assess early on in the probationary period what attitudes and behaviors his or her colleagues want and will then proceed to give them what they want. Material Symbols 1. The headquarters of Alcoa does not look like your typical head office operation: There are few individual offices. The informal corporate headquarters conveys to employees that Alcoa values openness, equality, creativity, and flexibility. 2. Some corporations provide their top executives with a variety of expensive perks. Others provide fewer and less elaborate perks. 3. The layout of corporate headquarters, the types of automobiles top executives that are given, and the presence or absence of corporate aircraft are a few examples of material symbols. 4. These material symbols convey to employees who is important, the degree of egalitarianism desired by top management, and the kinds of behavior that are appropriate. Language 1. Many organizations and units use language as a way to identify members of a culture or subculture. By learning this language, members attest to their acceptance of the culture and help to preserve it. 2. Organizations, over time, often develop unique terms to describe equipment, offices, key personnel, suppliers, customers, or products that relate to its business. 3. New employees are frequently overwhelmed with acronyms and jargon that, after six months on the job, have become fully part of their language. 4. Once assimilated, this terminology acts as a common denominator that unites members of a given culture or subculture. Components of Organizational Culture 1. Routine behaviors. 2. Norms shared by teams. 3. Dominant values. 4. Guiding philosophy for policies toward employees and customers. 5. The rules of the game for getting along in the organization. 6. The climate of the organization. Dimensions of Culture 1. Innovation 2. Stability 3. People orientation 4. Outcome orientation 5. Easygoingness 6. Detail orientation 7. Team orientation 8. Communications 9. Training & Development © Copyright Virtual University of Pakistan 173 Organizational Behavior - MGT502 VU 10. Rewards 11. Decision-making 12. Risk taking 13. Planning 14. Teamwork 15. Management practices Functions of Culture Supports the organization’s business strategy. Prescribes acceptable ways for managers to interact with external constituencies. Makes staffing decisions. Sets performance criteria. Guides the nature of acceptable interpersonal relationships in the company Selects appropriate management styles. Keeping Culture Alive Four Functions of Organizational Culture Selection Organizational – Concerned with how identity well the candidates will fit into the organization. Sense-making Organizational Collective device culture commitment – Provides information to candidates about the organization. Social system Top Management stability – Senior executives help establish behavioral norms that are adopted by the organization. Socialization – The process that The Bottom Line: Developing an helps new employees adapt Effective Organizational Culture to the Identify the Core organization’s Develop a Formulate Strategic Values and culture. Mission Objectives to Operating Principles Statement for Support the That Support the the Firm Mission Mission and Strategic Five Most Important Objectives Elements in Managing Culture Develop Formal Hire New Socialize New Mechanisms for What leaders pay Employees into the Employees Who Communicating attention to Are Compatible with Culture of the Firm the Elements of the the Firm’s Culture How leaders Culture to Employees react to crises How leaders behave How leaders allocate rewards How leaders hire and fire individuals © Copyright Virtual University of Pakistan 174 Organizational Behavior - MGT502 VU Strengthening organizational culture Embedding Organizational Culture Strengthening ƒ Formal statements of Organizational Culture organizational philosophy, Founders mission, vision, values, and leaders and materials used for recruiting, selection and Selection Culturally and Strengthening consistent socialization socialization Organizational rewards ƒ The design of physical Culture space, work environments, and buildings Managing the Stable cultural ƒ Slogans, language, and network workforce sayings ƒ Deliberate role modeling, training programs, teaching and coaching by managers and supervisors ƒ Explicit rewards, status symbols (e.g., titles), and promotion criteria ƒ Stories, legends, and myths about key people and events ƒ The organizational activities, processes, or outcomes that leaders pay attention to, measure, and control ƒ Leader reactions to critical incidents and organizational crises ƒ The workflow and organizational structure ƒ Organizational systems and procedures ƒ Organizational goals and the associated criteria used for recruitment, selection, development, promotion, layoffs, and retirement of people How to Change a Culture ƒ If the culture no longer supports the goals and strategy of an organization, it should be changed. ƒ Mergers and acquisitions generally result in a change in culture. Requirements for Successfully Changing Organizational Culture ƒ Understand the old culture first. ƒ Support employees and teams who have ideas for a better culture and are willing to act on those ideas. ƒ Find the most effective subculture in the organization and use it as a model. ƒ Help employees and teams do their jobs more effectively. ƒ Use the vision of a new culture as a guide for change. ƒ Recognize that significant cultural change takes time. © Copyright Virtual University of Pakistan 175 Organizational Behavior - MGT502 VU Lesson 37 ORGANIZATIONAL CHANGE How to Change a Culture If the culture no longer supports the goals and strategy of an organization, it should be changed. Mergers and acquisitions generally result in a change in culture. Requirements for Successfully Changing Organizational Culture Understand the old culture first. Support employees and teams who have ideas for a better culture and are willing to act on those ideas. Find the most effective subculture in the organization and use it as a model. Help employees and teams do their jobs more effectively. Use the vision of a new culture as a guide for change. Recognize that significant cultural change takes time. Guidelines for Managing Cultural Diversity Organization members must: – Recognize and value a variety of opinion and insight. – Recognize the learning opportunities and challenges presented by the expression of different perspectives. The organizational culture must: – Foster high performance expectations for everyone. – Stimulate personal development. – Encourage openness. – Make workers feel valued. The organization must have: – A well-articulated and widely understood mission. Effects of Organizational Culture on Employee Behavior and Performance Allows employees to understand the firm’s history and current approach. Fosters commitment to corporate philosophy and values. Serves as a control mechanism for employee behaviors. Certain cultural types may produce greater effectiveness and productivity. Organizational Change The need for change has been implied throughout this text. “A casual reflection on change should indicate that it encompasses almost all our concepts in the organizational behavior literature. Think about leadership, motivation, organizational environment, and roles. It is impossible to think about these and other concepts without inquiring about change.” If environments were perfectly static, if employees’ skills and abilities were always up to date and incapable of deteriorating, and if tomorrow were always exactly the same as today, organizational change would have little or no relevance to managers. The real world, however, is turbulent, requiring organizations and their members to undergo dynamic change if they are to perform at competitive levels. Managers are the primary change agents in most organizations. By the decisions they make and their role-modeling behaviors, they shape the organization’s change culture. For instance, management decisions related to structural design, cultural factors, and human resource policies largely determine the level of innovation within the organization. Similarly, management decisions, policies, and practices will determine the degree to which the organization learns and adapts to changing environmental factors. © Copyright Virtual University of Pakistan 176 Organizational Behavior - MGT502 VU We found that the existence of work stress, in and of itself, need not imply lower performance. The evidence indicates that stress can be either a positive or negative influence on employee performance. For many people, low to moderate amounts of stress enable them to perform their jobs better by increasing their work intensity, alertness, and ability to react. However, a high level of stress, or even a moderate amount sustained over a long period of time, eventually takes its toll and performance declines. The impact of stress on satisfaction is far more straightforward. Job-related tension tends to decrease general job satisfaction. Even though low to moderate levels of stress may improve job performance, employees find stress dissatisfying. Organizational change is the movement of an organization away from its present state and toward some future state to increase its effectiveness. Forces for organizational change include competitive forces, economic, political, global, demographic, social, and ethical forces. Organizations are often reluctant to change because resistance to change at the organization, group, and individual levels gives rise to organizational inertia. Sources of organizational-level resistance to change include power and conflict, differences in functional orientation, mechanistic structure, and organizational culture. Sources of group-level resistance to change include group norms, group cohesiveness, groupthink, and escalation of commitment. Sources of individual-level resistance to change include uncertainty and insecurity, selective perception and retention, and habit. According to Lewin’s force-field theory of change, organizations are balanced between forces pushing for change and forces resistant to change. To get an organization to change, managers must find a way to increase the forces for change, reduce resistance to change, or do both si- multaneously. Types of change fall into two broad categories: evolutionary and revolutionary. The main in- struments of evolutionary change are socio-technical systems theory and total quality man- agement. The main instruments of revolutionary change are reengineering, restructuring, and innovation. Change When we speak of change, we mean an alteration in organization design, strategy or processes, or some other attempt to influence an organization’s members to behave differently. External What Are the Forces for Change? Internal Forces For Change Internal Forces for Change External Forces Economic Forces Company Technology Declining Crisis Social and Effectiveness Political Change Process Behavioral Changing Changing Employee Work Climate Expectations Internal Forces © Copyright Virtual University of Pakistan 177  Organizational Behavior - MGT502 VU Forces for change 1. The changing nature of the workforce: A multicultural environment. Human resource policies and practices changed to attract and keep this more diverse workforce. Large expenditure on training to upgrade reading, math, computer, and other skills of employees 2. Technology is changing jobs and organizations: Sophisticated information technology is also making organizations more responsive. As organizations have had to become more adaptable, so too have their employees. We live in an “age of discontinuity.” Beginning in the early 1970s with the overnight quadrupling of world oil prices, economic shocks have continued to impose changes on organizations. 3. Competition is changing: The global economy means global competitors. Established organizations need to defend themselves against both traditional competitors and small, entrepreneurial firms with innovative offerings. Successful organizations will be the ones that can change in response to the competition. 4. Social trends during the past generation suggest changes that organizations have to adjust for: The expansion of the Internet, Baby Bo