managing organizational transformation 1

8/2/2019 Managing Organizational Transformation 1

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Organization effectiveness

constituency (strategic)system resource - bargain

internal process (adaptability,identity, perception)

legitimacygoal


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Organizational goals (Perrow, 1961)

Official goals described in charters, public statement;serve as legitimating devices for the organization

Operative goals organizational ends pursued throughactual policies and decisions of the organization

Operative goals may be in line with official goals The goals most often utilized to assess effectiveness of an

org. are the operative ones


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Healthy organization internal process

Healthy good adaptability with environmentstrong identity

ability to perceive the world and herself correctly

Adaptability problem solving (internal integrity & external

adaptation)

Identity - goals are understood and accepted by members

perceived by members

Concepts of organizations (manifest formally displayed onorganizational chart, assumed members perceive as they way thingswork, extant revealed through systematic investigation, and requisite situation expected by members); healthy, when the four concepts areclosely in line with each other


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Adaptable learning organization

A learning organization is an organization skilledat creating, acquiring, and transferring knowledge,and at modifying its behavior to reflect newknowledge and insights

Learning organizations are skilled at five mainactivities: systematic problem solving,experimentation with new approaches, learning

from their own experiences and past history,learning from the experiences and best practices ofothers, and transferring knowledge quickly andefficiently throughout the organization


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organization Consciously coordinated social unit, composed of two

or more people, that functions on a relativelycontinuous basis to achieve a common goal or set ofgoals

A tool used by people to coordinate their action toobtain something they desire or value


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To be cont. Organizations increase value

create knowledge

core competence competitive

diversity

efficiencyinnovation


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To be cont. Organizational stakeholders

those having interest, claim, stakein what the organization does and

how well it performs

inside (shareholder, manager, workforce)

outside (customer, supplier, government,

union, local communities, general public)


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To be cont. Ethics CSR

societal ethics

sources professional

individual familyfriends

school

religion

organizationproblem self-interest

outside pressure (e.g. Enron, Lapindo)


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Visi, misiVisi, misi titik awal renstra

Pencapaian visi libatkan perubahan

Visi, misi bukan hanya diformulasikan saja, tapiharus dikomunikasikan dan di sharedprogram visioning VIA (cf. strategy in action)

Visi menarik

menantangdapat dipercaya

memberikan inspirasi


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Visimimpi seorang pemimpin berdasarkankenyataan (campuran antara kenyataan dan mimpi)

Visionthe right one is the toughest task and the

truest test of great leadership (Nanus)Visi konotasi ideal

image yg hidup

standard excellence


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Managing in a changing global environment Cf. system theory open

Organization strategic environment (fig.3-1, p. 57)

general specific

Domain good, services, customers &other stakeholders

protected & enlarged to increase values


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system Cf. Ludwig von Bertalanffy, Austrian biologists, 1969 General System theory Katz & Kahn

open system (input-process-output) An entity that has interdependent parts and a purpose All systems have basic characteristics:

operate within an environment (things outside andimportant to the org. but largely beyond its control)

focus on the interrelatedness among systems

negative entropy

feedback

dynamic homeostasis/balance

differentiation

equifinality


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Organizational environment

The organization

customers distributors

suppliers competitors

government unions

Demographic

and culturalforces

Internationalforces Politicalforces

Environmentalforces

Economicforces

Technologicalforces


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To be cont. Environment uncertain

complexity dynamism

richness

Resource

resource dependence theory Strategies for managing resource dependence

symbiotic vs competitive interdependencies


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Strategies for managing symbiotic resource

interdependencies Developing a good reputation Co-optation political tool, by neutralizing

problematic forces Strategic alliances sharing resources to develop

joint new business opportunitiesnetworks

long-term contract

joint venture (jointlyestablish & share ownershipof a new business)

minority ownership (cf. The Fuyo Keiretsu)


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Strategies for managing competitive resource

interdependencies

collusion and cartels(-) (+)

third party linkage mechanism

strategic alliances

merger and takeover


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To be cont. Transaction cost theory

minimize cost of managing exchangingresources in the environment and of managingexchanges inside the org.

Case How Ford manages its environment (p.85)


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Creating and managing organizational

culture Corporate culture relatively new focus in studying

organizations (cf. Pettigrew, 1979) he felt that culture wasneglected in the field of organizations

Early 1980s research in industrial sociology, psychology,and management science two major journals inorganizational studies:ASQ (1983), and OrganizationalDynamics (1983)

Culture is fuzzy and difficult to define terms bearing a

family resemblance notions of shared values, commonunderstandings, patterns of beliefs and expectations, andbehavioral norms


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culture Culture set of shared values and norms that

controls organizational members interactionswith each other and with people outside theorganization

Values terminalinstrumental

Layers of culture artifactpatterns of behavior

behavioral normsvalues

fundamental assumptions


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culture System of shared symbols and meanings (Geertz, 1973) System of publicly and collectively accepted meanings

(Pettigrew, 1979)

Values, beliefs, and expectations that members come toshare (Van Maanen & Schein, 1979) The set of symbols, ceremonies, and myths that

communicate the underlying values and beliefs of theorganization to its employees (Ouchi, 1981)

The way we do things around here (Uttal, 1983) The glue that holds together an organization through

shared patterns of meaning (Martin & Siehl, 1983) Socially constructed realities that provide learned ways of

coping with experiences (Thompson & Luthans, 1990)


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Hofstedes dimensions of cultural values: Individualism vs collectivism Power distance Uncertainty avoidance

Feminity vs masculinity Short-term vs long-term oriented (Chinese Value Survey)

Do the cultural frameworks really explain cultural differences? Do American theories apply abroad? Martin Gannon & associates, 1994 cultural metaphors:

country metaphor

england traditional british housegermany symphonyitaly opera

japan gardennigeria marketplacerussia balletturkey coffeehouseUS football


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culture How is it formed?

property right system

characteristics culture org. structure

of people in the org.

organizational ethics


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How is an organizations culture

transmitted to its members? Socialization Role orientation institutionalized

individualized

how newcomers respond to a situation

Collective, formalSequential, fixed

Serial, diverstiture

Individual, informalRandom, variable

Disjunctive, investiture


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Stories, ceremonies, and organizational language

Rites

Type example purpose

Rite of passage Induction & basic

training

Learn & internalize

norms and values

Rite of integration Office christmasparty

Build common norms& values

Rite of enhancement Presentation ofannual award

Motivate commitmentto norms and values


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Where does organizational culture come

from?

Characteristics of people within the organization

Organizational ethics

Property rights (managers vs workforce)

Organizational structure (cf. mechanistic vs. organic)

Tall, highly centralized,standardized

Flat, decentralized,Rely on mutual

adjustment


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To be cont.

Levels of culture (Rousseau, 1990fundamentalassumptions, values, behavioral norms, patterns of behavior,artifact/manifest culture Sathe, 1985 manifest culture,expressed values, basicassumptions cf. iceberg phenomenon

manifest

eExpressed values Water line

iceberg

Basic assumption


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Culture to be cont. Managing cultures? Social responsibility!Approaches defensive

accomodativeproactive

Case for analysis

A tale of two cultures (p. 201)-Southwest flat, informal, creative, cooperative-- Value Line efficiency, clean surfaces report, noculture of cooperation,etc


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Culture-performance link Culture long-term economic performance!

Kotter & Heskett: strong, strategically appropriate,adaptive

Iswanto: integrative, congruent with strategy, unique,employee-oriented, consistent, adaptable, mission-driven


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Transformasi nilai (cf. Kasali, 2005)

Culture is what keeps the herd (of employees) movingroughly west (Walton)

Pada masa transisi setidaknya ada 7 budaya negatifyang mengontaminasi organisasi (Deal & Kennedy,1998):

culture of fear, of denial, of self-interest, of cynicism(mencela), of distrust, of anomie, and the rise ofunderground subculture (mengedepankan kelompok)


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Ketika ada tuntutan peran baru, muncul nilai-nilaiikutan yang tidak dikehendaki:

Tuntutan peran baru Nilai ikutan yg takdikehendaki

Daya saing

Efisiensi

Pelayanan

KeterbukaanKewirausahaan

Manipulasi

Perilaku kurang loyal

Ketidakpercayaan

Self-interest

Korupsi

Kedaerahankekuasaan


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Budya korporat

Cf. Konosuke Matsushitamisi sebuah industri

membebaskan masyarakat dari kemiskinan dankesulitan-kesulitan hidup, menjadi sebuahkemakmuran yang sejahtera (1932)

Dia yakin bahwa perubahan harus dimulai dengan

figur, kerja keras, dan filosofi Ketika masa sulit, dia bersama kepala pab rik turun ke

toko-toko, dan memberikan contoh pelayanan


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Lapisan budaya korporat

Visible artifacts:

Simbol kasat mata

(logo, merek)

Seremoni

Slogan

Ritual, perilaku dsb

Nilai dasar & keyakinanAsumsiKepercayaanSikapPerasaanSejarah korporat


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Karakteristik budaya korporat Dibentuk oleh keyakinan individu korporat

Mencerminkan aspirasi anggota Memiliki sosiodinamika

Memiliki konsekuensi

Sulit dipahami

Membentuk identitas, memperkuat image, positioning,dan pencapaian tujuan

Menuntut keseimbangan antara nilai-nilai

belajar

Adalah pola Membentuk hubungan sinergi

Terdiri atas subkultur


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Hubungan antara lingkungan dan strategi manajemen

terhadap budaya

Budaya adaptasi Budaya misi

Budayapartisipatif

Budayakonsisten

ekstern

intern

Fokus adatasi

labil stabil

Keadaan lingkungan


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Memperkuat budaya baru

Budaya disiplin utk meraih keunggulan bersaing(Collins, 2001 all companies have a culture; somecompanies have discipline; but few companies have aculture of discipline):

rekrut yg terbaikberikan pengertian yg terbaik

letakkan pada kursi yg tepat

keluarkan yg di bawah standar


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Organizational design and strategy in a

global environment Organizations vie/exist, grow, create

values competitive

advantage

core competence strategy (decisions & actions)

skill, abilities efficiency, quality,innovation, etc


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Design & strategy Core competence strategy create

values competitive adv. Sources functional

organizationalcoordination abilityglobal expansion

transferring core competence abroad:global network, access to globalresources & skills, global learning


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Strategy -- levels Functional-level functional resources

organizational resources

coordination ability Business-level combining functional

core competences

top-management team

Corporate-level protect, enlarge, andexpand into new domains

Global expansion


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strategy Strategic goal core competence competitive adv.

Lower costs differentiate products

Design?

structure! (cf. fig.8-3, p. 236) culture

level!


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Design -- strategy Strategy plan of action to create value

organizations at all levels (functional,

business, corporate, global) developvalue-creation skills and abilities

Managers manage strategy, structure, and culture to protect its domain , to create value tosatisfy stakeholders (cf. p. 259

Analyze case Levi Strauss goes global


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Organizational change Hiraclituss penta rei

(planned) changeto find new/improved ways of

using resources and capabilities in order toincrease an organizations ability to create valuesand improve returns to its stakeholders

Levels of change human resources

functional resources

technological capabilities

organizational capabilities


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levels of change Human resources training & dev.

organizational culture

diversitypromotion & reward system

organizational learning & decision

Functional resources structureculture

technology


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To be cont. Technological capabilities redesign of

organizational activities

Organizational capabilities through design of

structure & culture

The four levels are interdependent!

Human resource change new functional

resource/new technological capabilities, etc


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Forces for change Competitive forces

Economic, political, and global forces (cf. Nafta, Afta,Apec, EU, ACFTA, etc)

Demographic and social forces (diverse work force, cf.learning to live together)

Ethical forces (!?) Nike, adidas, etc.


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Resistances to change Organization-level power & conflictdifferences in functional orientation

mechanistic structureorganizational culture

Group-level groupthink (Janis, 1972) members of highly cohesive groupunable to evaluate each others inputs critically:

Illusions of invulnerability Illusions of unanimity Illusions of group morality Stereotyping of the enemy as weak, evil or stupid Self-censorship by members Mind-guarding Direct pressure


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To be cont.Groupthink develops under these conditions:

There are highly cohesive individualsThe group closes itself from outside

information/opinion

Group members seldom systematically evaluatealternatives to come to appropriate conclusion

The group is under pressure to reach a decision

The group is dominated by a strong figure


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To be cont. Individual-level uncertain, insecure, habit, perceptual process selective

Managing change

Approaches leadershiptop-down change fails

(lower level employees know best what requires change)no agreement what and how to change

OD applying social sciences research and theories tocreate more rational organization

Improve efficiency & effectivenessOrganizational health

building capacity to change


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To be cont. Lewins planned model of change (modified)

diagnosis

unfreezingmovement

refreezing (institutionalizationof change)

renewal


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To be cont. Cf. fig. 10-2, p. 309

forces for change and resistance to change are equalno change!

To changemanagers must increase forces forchange, or reduce resistance to change, or do both


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change Evolutionary (cf. incremental, operasional)

sociotechnical system theory

total quality management

creation of empowered, flexible work group

Revolutionary (strategis, radikal)

reengineeringrestructuring

innovation


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OD-dealing with resistance to change Education & communication

Participation & empowerment

Facilitation Bargaining & negotiation

Manipulation

Coercion


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OD to promote change The more revolutionary, the more likely the org. to use

OD techniques at three levels individual, group,organization

Changing attitudes & behaviorcounseling

sensitivity training

process consultation

Case Sears changes again and again, p. 334


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Organizational transformations: birth,

growth, decline, and death Organizations may survive, prosper, fail or die

ability to manage strategies,

structures, cultures to gain accessto environmental resources

life cycle: birth, growth, decline,

death at different rates


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Organizational birth Entrepreneurs recognize and take advantage ofopportunities to use skills and competence to create values

Risky stage new experience, uncertainty Lacks formal structure flexiblewritten! Environment may be hostile! Develop a business plan!

goods/services, customers/marketSWOT analysis!

FSdetailed business plan (mission, vision,strategy, resources, schedule)


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To be cont. Population ecology model

explaining factors that affect the

rate at which new organizations

are born in a population of existing

organizations

birth can be rapid or decrease!strategies r vs k-strategy

specialist vs generalist


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Organizational growth Develop value-creation skill and competences,

allowing to acquire additional resources

Institutional theory studies how organizations

can increase ability to grow and survive in acompetitive environment by becoming legitimatein the eyes of stakeholders

Adopting institutional environment (values,

norms, goals, structures, cultures etc) Organizational isomorphism: coercive, mimetic,

normative


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Implications for managersAnalyze the resources in the environment to

determine a niche

Then, how you compete

Develop the competence/strategy to attractresources

Analyze the institutional environment to learnvalues, norms, benchmark

Anticipate/prepare for problems, managementteam

Manage crisis


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To be cont.

Greiners model

grow through creativity crisis of leadership

grow through direction crisis of autonomy

grow through delegation crisis of control

grow through coordination crisis of red tape

grow through collaboration crisis of ?


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Organizational decline and death Decline fail to anticipate, recognize, avoid, neutralize, or

adapt to external or internal pressures that threaten long-term survival

Decline grow too muchorganizational inertia (forces

resistant to change)

risk aversion

desire to maximize rewardsoverly bureaucratic culture

changes in the environment


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Organizational declineWeitzel and Johnsons model five stages

blinded unable to recognize

internal & external probleminaction little action to correct problem

faulty action wrong decision, conflict

crisis radical changes!

dissolution cannot recover, death!


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Implications for manager To prevent decline, continually analyze theorganization to identify inertia

Analyze the environment, niche, to identify

changes in resourcesWhen facing difficulties to pinpoint problems, call

on other managers, outside consultants for helpYou have concern for stakeholders satisfaction. So,

be prepared to step aside if new leadership isrequired case analysis: The Body Shop reaches middleage (p. 364)


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Managing conflict, power, and politics Organization consists of different groups of

stakeholders, each contributing to the org. inreturn for rewards

To grow, change, and survive, an organizationmust manage cooperation and competition amongstakeholders

Each stakeholder group has its own goals andinterests, which overlap somewhat with those ofother groups

Stakeholders goals and interests are not identicalconflict arises goals, preferences, interestsdiffer


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conflict Pondys model of conflict process of five sequential

stages

latent - potential

perceived - escalates

felt respond emotionally

manifest open aggression

conflict aftermath resolved(combative or cooperative)


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Sources of conflict Interdependence

Differences in goals and priorities

Bureaucratic factors

Incompatible performance criteria

Competition for resources


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Pandangan mengenai konflik Tradisional (1930-1940-an) negatif, merugikan,

jelek, bikin kelompok kacau dihindari

Hubungan manusiawi (1940-1970-an) lumrah,alami, tidak bisa dihindari, malah bisa merupakandaya positif yang meningkatkan kinerja kelompok

Interaksionis (1970- sekarang) tidak hanya bisa

positif, tetapi justru diperlukan, bahkan mutlakperlu, agar kelompok bisa efektif


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Conflict resolution If conflict escalates, it may sour organizational culturemanage!

Method? depending on the source of the problem

level of structure

level of attitude & indiv.

Good conflict aftermath!cooperative attitudes canbe maintained over time


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Teknik resolusi konflikProblem solving face-to-face meetingSuperordinate goals creating a shared goal

Expansion of resourcesAvoidanceSmoothingCompromiseAuthoritative commandAltering human variable trainingAltering structural variable


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powerAll organizations control their participants, esp.formal ones

Essence of organizational control power

Power ability to get others to do what one wantsthem to doAuthority has a narrower scope than powerWebers def: probability that (certain specific)

commands from a given source will be obeyed by agiven group of persons Types of authority: charismatic (non rational,

affective or emotional), traditional, legal


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To be cont. Sexual harassment isnt about sex but Power described as the last dirty word (cf. money) Power concerns dependencyA has the capacity to influence the behavior of B;

so B acts in accordance with As wishes Cf. leaders achieve goals; power is a means of

facilitating the achievement

Sources/bases of power (French & Raven, 1959):coercive, reward, legitimate, expert, referent

T b


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To be cont. Mintzbergs typology of power: power stems from control over a

resource, a technical skill, or a body of knowledge, legal prerogatives,those who have access to power holders Etzioniconcept of power and subordinates response to power

compliance; three types of power: coercive, remunerative, normative Reactions to power from subordinates:

commitment intense positive involvement

alienation intense negative involvementcalculation mild positive or mild negative involvement

Dependency postulate: the greater Bs dependence on A, the greater thepower A over B; dependence is inversely proportional to the alternativesource of supply (cf. intelligence, monopoly, expertise etc)

What creates dependency?importance

scarcitynonsubstitutability


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To be cont. Power tactics how power bases are translatedinto actions

reason

friendlinesscoalition

bargainingassertiveness (defending )

higher authoritysanctions


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Politics power in action Usage of power tacticswhen managers managers-

influence superiors subordinates

most popular reason reason

coalition assertiveness

friendliness friendliness

bargaining coalition

assertiveness bargainingless popular higher authority higher authority

sanctions

S f i ti l


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Sources of organizational

powerAuthority Control over resources

Control over information

Nonsubstitutability Centrality

Control over uncertainty

Controlling the premises of decisionmaking/unobtrusive power


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Authority (cf. Dessler, 1998) the right to take action, to make decisions, and todirect the work of others

Essential part of organizing

Derives from several sources: personsposition/rank, personal traits (intelligence,charisma), expertise (cf. bases of power)

must come from the bottom up and be based onsubordinatess acceptance of supervisors orders (!)

Cf. workers empowerment and team-building!


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Politics (cf. organization is a political

arena!?) Politics acquisition and use of power Integral part of decision making To benefit, an organization must establish a

balance of power in which alternative views andsolutions can be offered/ considered by all parties Power should flow to those who can be of most

help to organization

Prevent a political manager/group from pursuingtheir interest at the expense of organizationalinterest


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Authority, power, influence The words are often used interchangeably

Influence effect of

Power cf. Webers

Authority notion of legitimacy or ethicalsanctification; power does not have to be legitimate


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Winning at office politics Control vital information (cf. expert power)

Hook your career to a star

Minimize power vacuums

Open communication channels

Cases: The power of the Subordinates

(Robbins, 1998); The Shake-up in the GMs hierarchy

(Jones, 2004)

managing organizational transformation 1

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