CH-14-16 Organizational Structure – Organizational Behaviour: Understanding and Managing Life at Work: Book Guide

This Document Contains Chapters 14 to 16 CHAPTER 14 ORGANIZATIONAL STRUCTURE SAMPLE ANSWERS TO DISCUSSION QUESTIONS 1. Discuss the division of labour in a restaurant. What methods are used to coordinate this divided labour? Do differences exist between fast-food versus more formal restaurants? Answer: There is a vertical division of labour and horizontal division of labour in most restaurants. The vertical division of labour usually consists of the restaurant manager who is responsible for planning and decision making. Below the manager and the horizontal division of labour are the cooks, servers, dishwashers, and cashier, and in some restaurants there are also host(ess), bartenders, and bus boys. Some restaurants might also have assistant managers who report to the manager. The methods used to coordinate the labour in a restaurant include direct supervision (the manager is responsible for coordinating the work of the restaurant’s employees) as well as the standardization of work processes and skills as follows: Servers take orders from customers and give them to cooks; cooks prepare the meals; servers take the meals to the customers; servers take dirty dishes and cutlery to the kitchen; dishwashers wash the dishes and cutlery; the cashier prepares the bill and completes the transaction. Thus, the task associated with each job is very clear as is the work process which ensures the coordination of the labour. Workers in each job know what to expect from those in other job categories. The standardization of the process and skills are especially likely in fast-food restaurants which are more mechanistic than formal restaurants which tend to be more organic and might also allow for some mutual adjustment through informal communication between workers. Formal restaurants often allow for customer requests and often have special items added to the menu on a daily basis. This requires some deviation from the kind of rigid rules and regulations and stringent routine found in fast-food restaurants. Thus, more discretion is possible and allowed in formal restaurants compared to fast-food restaurants where the tasks are more routine. 2. Is the departmentation in a small college essentially functional or product-oriented? Defend your answer. (Hint: In what department will the historians find themselves? In what department will the groundskeepers find themselves?) Answer: For the most part, labour in a small college is divided by function. Historians are in the history department, groundskeepers in the groundskeeping department, registration personnel in the registrar’s office, and so on. 3. Which basic method(s) of coordination is (are) most likely to be found in a pure research laboratory? On a football team? In a supermarket? Answer: The complex, unique tasks performed in a pure research laboratory would most likely be coordinated through standardized skills (acquired through common scientific training) and informal mutual adjustment. The division of labour on a football team would be coordinated through direct supervision provided by coaches and the quarterback. Also, playbooks that specify particular plays would lead to standardized work processes that supplement direct supervision. In a supermarket, coordination would occur through direct supervision, standardization of work processes, and standardization of outputs. Standardization of work processes and outputs is inherent in the routine way food products enter the store, become displayed, and make their way out as purchases. 4. What are the relative merits of mechanistic versus organic structures? Answer: Mechanistic structures may have merits in larger organizations which need a greater degree of control than smaller organizations. You could also argue that organizations that can be crippled financially by poor investment decisions need to have mechanistic structures. Finally, the military, because of the importance of the span of control and the formal levels of authority, need mechanistic structures to function effectively. 5. Discuss the logic behind the following statement.’ “We don’t want to remove the differentiation that exists between sales and production. What we want to do is achieve integration.” Answer: Differentiation exists when members of sales and marketing departments have different time spans, goals, and interpersonal styles. The speaker is saying that these differences are natural, appropriate, and helpful for the organization as long as the departments are coordinated. Integration achieves coordination without removing needed differences in orientation. 6. As SpinelIi Construction Company grew in size, its founder and president, Joe SpinelIi, found that he was overloaded with decisions. What two basic structural changes should SpinelIi make to rectify the situation without losing control of the company? Answer: Joe Spinelli should delegate some authority to decentralize the company. He may have to add a layer of management. This will mean that fewer decisions reach his desk. To maintain control, he may wish to increase formalization by developing specific rules for bidding contracts, dealing with subcontractors, and so on. 7. Describe a situation in which a narrow span of control might be appropriate and contrast it with a situation in which a broad span might be appropriate. Answer: Narrow spans are appropriate when subordinates are poorly trained, inexperienced, represent a number of functional specialties, and when a boss is the best coordinating mechanism. Broad spans are appropriate when subordinates are well-trained, experienced, essentially all engaged in similar work, and when other coordinating mechanisms exist. 8. Make up a list of criteria that would define a good downsizing effort. Answer: Downsizing can be effective in bureaucratic structures which sometimes, because they have grown large and complacent, may: (1) stifle employee growth and achievement; (2) result in a lack of innovation, especially from lower-level members; (3) promote resistance to change; (4) cause members to peg their performance at the minimal acceptable level, and (5) cause members to confuse means with ends and lose sight of organizational goals. If the downsizing effort is effective, the new, slimmed down organization may regain some of its lost vitality. Good communication and careful implementation is essential, as is job design that is appropriate to the new structure and role demands. SAMPLE ANSWERS TO INTEGRATIVE DISCUSSION QUESTIONS 1. How do the structural characteristics of organizations influence leadership, communication, decision making, and power in organizations? Discuss the implications of each of the structural characteristics (i.e., span of control, organization levels, formalization, centralization, and complexity) for leadership behaviour, communication and decision making processes, and the distribution and use of power in organizations. Answer: This question is designed to help students understand the connection between the more macro aspects and the micro and meso aspects of organizational behaviour. Students may not realize that organizational structure has important implications for things like leadership, communication, decision making, and power. A good way to organize this answer and discussion is to first note the relationship between the structural characteristics and mechanistic and organic structures. Mechanistic structures tend to have narrow spans of control, high centralization and formalization, many levels of authority, and tall rather than flat structures. Organic structures tend to favour wider spans, fewer authority levels, less specialization, less formalization, and decentralization. In terms of leadership behaviour, communication and decision making processes, and the distribution and use of power in organizations, it is important to first recognize that organic structures favour flexibility and informal communication over rigidity and the strict chain of command along the lines of the human relations movement. Communication in mechanistic structures is more likely to be formal and probably more downward than upward. In terms of leadership, you are more likely to find directive and transactional leadership behaviour in mechanistic structures. Organic structures are more likely to have participative, transformational, and empowering leaders. Decision making is more likely to be centralized at the higher levels of the organization in mechanistic structures. In organic structures, decision making is more likely to be decentralized, participative, and to employ groups. Finally, power in mechanistic structures is likely to be based on legitimate authority along with the reward and coercive power that is associated with it. Expert and referent power are more likely to be found in organic structures along with the empowering of individuals throughout the organization. a. Span of Control: • Leadership: Wide span leads to more delegative styles; narrow span allows for closer supervision. • Communication: Wide span can complicate communication; narrow span enables more direct communication. • Decision Making: Wide span often decentralizes decision-making; narrow span centralizes it. • Power Distribution: Wide span distributes power; narrow span centralizes power. b. Organization Levels: • Leadership: Different styles at different levels; top for strategic, lower for operational. • Communication: More levels can distort communication; fewer levels streamline it. • Decision Making: More levels centralize decision-making; fewer levels decentralize it. • Power Distribution: Many levels centralize power; fewer levels distribute it more broadly. c. Formalization: • Leadership: High formalization leads to transactional styles; low allows for transformational styles. • Communication: High formalization standardizes communication; low allows for informal communication. • Decision Making: High formalization follows strict procedures; low formalization is more adaptive. • Power Distribution: High formalization centralizes power; low formalization distributes it. d. Centralization: • Leadership: Centralized structures lead to top-down leadership; decentralized structures allow for participative leadership. • Communication: Centralization leads to top-down communication; decentralization allows for bidirectional communication. • Decision Making: Centralization slows decision-making but maintains consistency; decentralization speeds up decision-making. • Power Distribution: Centralization concentrates power; decentralization distributes it. e. Complexity: • Leadership: Requires managing diverse functions and collaboration. • Communication: Complex structures need effective communication strategies. • Decision Making: Involves coordination and collaboration. • Power Distribution: Power is distributed among various departments and functions. 2. How do the new forms of organizational structure, such as virtual, modular, and boundaryless organizations, influence the culture of an organization? In other words, what is the relationship between these types of structures and an organization’s culture? What is the relationship between these structures and the use and effectiveness of teams? Answer: The new forms of organizational structure tend to be more flexible than traditional structures and they break down external and internal boundaries. Virtual and modular organizations represent structures that breakdown or modify external organizational boundaries. The boundaryless organization removes external and internal boundaries. Because of the greater fluidity, flexibility, and openness of these structures, they are likely to be associated with particular values and organizational cultures. Such cultures are likely to be open, informal, and participative. They can also be expected to place a high value on risk taking, creativity, and innovation. Teams that consist of members from different partner organizations, various functions and specialties, suppliers, and customers are also likely to be an important characteristic of these organizational structures. SAMPLE ANSWER TO ON-THE-JOB CHALLENGE QUESTION: SPAN OF CONTROL AT GOOGLE What does this structural feature tell you about how work is organized at Google? How does a large span of control promote grassroots innovation? Answer: The large span of control reported at Google is typical of a flat organic structure in which direct supervision plays little role in day-to-day operations. Work is coordinated by standardization of skills and mutual adjustment. Under this structure, well trained and fairly treated individuals will tend to innovate because they are intrinsically motivated and the boss is not looking over their shoulder. Indeed, as described in Chapters 8 and 16, Google employees are given free time to devote to innovative products that might help Google clients. This reinforces the lack of direct supervision provided by the wide span of control. EXTRA ESSAY QUESTIONS 1. Most of the advocates of the classical approach to organizational structure were practicing managers or management consultants working in the early part of this century. Most of the advocates of the human relations approach were academics. How might these different backgrounds have affected their views about organizational structure? Answer: • Classical Approach Advocates: As practicing managers or consultants, they focused on efficiency, control, and clear hierarchies to streamline operations and improve productivity. • Human Relations Approach Advocates: Academics emphasized the importance of employee needs, motivation, and interpersonal relationships, advocating for more flexible and supportive organizational structures. 2. Review the comparative strengths and weaknesses of product versus functional departmentation. Answer: • Product Departmentation: • Strengths: Better focus on specific products, improved coordination within product lines, and enhanced accountability. • Weaknesses: Duplication of resources, potential for competition between product lines, and higher costs. • Functional Departmentation: • Strengths: Specialization, efficient use of resources, and streamlined operations within functions. • Weaknesses: Limited focus on specific products, potential for poor interdepartmental communication, and slower response to market changes. 3. Describe the relationship between organizational size and centralization, complexity, and formalization. Answer: • Size and Centralization: Larger organizations tend to have more centralized decision-making to maintain control. • Size and Complexity: As organizations grow, they become more complex with additional layers, departments, and processes. • Size and Formalization: Larger organizations often have higher formalization with more standardized procedures and rules. 4. Describe the concepts of differentiation and integration. Is integration an attempt to do away with differentiation? Answer: • Differentiation: Refers to the process of dividing an organization into specialized units or functions. • Integration: The process of coordinating and combining these differentiated parts to work together effectively. • Integration vs. Differentiation: Integration is not an attempt to do away with differentiation but rather to ensure that the differentiated parts work harmoniously. 5. Discuss the strengths and weaknesses of bureaucratic organizations. Answer: • Strengths: Clear hierarchical structure, well-defined roles and procedures, and efficient management of large-scale operations. • Weaknesses: Rigidity, resistance to change, slow decision-making, and potential for reduced employee morale. 6. In what ways do formal integrators provide a unique means of organizational coordination? Answer: • Formal Integrators: Such as project managers or liaison officers, bridge gaps between departments, ensure alignment with organizational goals, and facilitate communication and coordination across different functions. 7. Using the material in the chapter, describe how an organization might be well conceived at the individual and small group level (in terms of motivation and so forth) and still not be effective. Answer: • Effective at Individual/Small Group Level: Motivating and engaging employees individually and in small teams may not address larger organizational issues like coordination, resource allocation, or overall strategy. • Ineffectiveness: The organization might struggle with aligning these motivated individuals and teams with broader goals, facing challenges in scaling, or encountering systemic issues that undermine overall effectiveness. 8. Compare and contrast ambidextrous, virtual, modular, and boundaryless organizations. What are the advantages and disadvantages of each form of structure? Answer: • Ambidextrous Organizations: • Advantages: Balances exploration and exploitation, adaptable to change. • Disadvantages: Can be complex to manage, potential for internal conflict. • Virtual Organizations: • Advantages: Flexibility, cost savings, access to global talent. • Disadvantages: Potential communication issues, lack of physical presence. • Modular Organizations: • Advantages: Flexibility, ability to quickly adapt and scale. • Disadvantages: Coordination challenges, dependency on external partners. • Boundaryless Organizations: • Advantages: Enhanced communication, flexibility, and collaboration. • Disadvantages: Potential for ambiguity in roles, management challenges. 9. What is downsizing and what are some of the problems with downsizing? Answer: • Downsizing: The process of reducing the number of employees and restructuring the organization to improve efficiency. • Problems: Can lead to decreased morale, loss of valuable talent, increased workload for remaining employees, and potential long-term damage to organizational culture. 10. Discuss the relationship between size and structure. Answer: • Size and Structure: As organizations grow in size, they typically adopt more complex structures, such as hierarchical levels, formalized procedures, and specialized departments, to manage increased complexity and coordination needs. TEACHING NOTES FOR ORGANIZATIONAL STRUCTURE PREFERENCE SCALE EXPERIENTIAL EXERCISE The purpose of this exercise is for students to get some idea of their preference for a mechanistic versus an organic organizational structure. In most organizations, there are differences of opinion and preferences as to how the organization should be structured and how people should conduct themselves. This exercise can be used to introduce the topics of traditional structural characteristics and organic and mechanistic organizational structures. To begin class discussion, the instructor might ask students to describe the structure of organizations that they have worked in with respect to the structural characteristics described in the text. Additional discussion questions could include the following: Teaching Notes for Organizational Structure Preference Scale Experiential Exercise 1. How effective was the organization? Answer: • Effectiveness can be assessed based on various factors such as productivity, employee satisfaction, and the ability to meet organizational goals. Organizations with well-aligned structures and clear processes often perform effectively, while those with misaligned structures may face challenges in achieving their objectives. 2. What role did the structural characteristics play in terms of the organization’s effectiveness? Answer: • Structural Characteristics: Characteristics such as span of control, centralization, formalization, and complexity directly influence how effectively an organization operates. A well-designed structure facilitates communication, decision-making, and resource allocation, leading to higher effectiveness. Conversely, a poorly designed structure can create bottlenecks, confusion, and inefficiencies. 3. Was the organizational structure mechanistic or organic? Answer: • Mechanistic Structure: Characterized by a rigid hierarchy, formal rules, and centralized decision-making. • Organic Structure: Features a flexible hierarchy, decentralized decision-making, and a focus on collaboration and adaptability. • The nature of the structure can often be determined by evaluating factors such as the level of formalization, degree of centralization, and the adaptability of the organization to changes. 4. Why do you think the structure was mechanistic or organic? Answer: • Mechanistic Structure: Often used in stable environments requiring efficiency and routine, with clear hierarchies and formal procedures. • Organic Structure: Preferred in dynamic environments where flexibility, innovation, and quick adaptation to changes are needed, resulting in more informal communication and decentralized decision-making. 5. Did you like working in a mechanistic or organic organization? Answer: • Personal Preference: Students might prefer one structure over the other based on their own work style, needs, and experiences. For example, some may thrive in the structured environment of a mechanistic organization, while others may find the flexibility of an organic structure more satisfying and conducive to their productivity and job satisfaction. This discussion can then lead into the Organizational Structure Preference Scale. You might have students work in groups to compare and discuss their scores and determine the group average. A class discussion might follow in which the instructor calculates the class average. The following questions can be used for group or class discussion: Teaching Notes for Organizational Structure Preference Scale 1. What is your score on the Organizational Structure Preference Scale and what are the implications of it? Answer: • Score Interpretation: The score reflects your preference for either a mechanistic (structured, hierarchical) or organic (flexible, decentralized) organizational structure. • High Score for Mechanistic: Indicates a preference for clear roles, rules, and a structured environment. • High Score for Organic: Suggests a preference for flexibility, informal communication, and adaptability. • Implications: Understanding your score can help you identify the types of work environments where you might thrive and align your career choices or management style accordingly. 2. Based on your previous work experiences in mechanistic and/or organic organizations, how accurate is your score? Answer: • Accuracy Check: Compare your score with your actual experiences. For instance, if you scored high for organic structures but found yourself struggling in a mechanistic organization, this may highlight a mismatch between your preferences and your work environment. Conversely, if your experiences align well with your score, it confirms the accuracy of your preferences. 3. Describe how you have felt working in a mechanistic or organic organization, and how does your score on the Organizational Structure Preference Scale help you to understand your attitudes and behaviour? Answer: • Personal Experience Reflection: Reflect on how you felt in each type of organization. For example, you might have felt constrained and frustrated in a mechanistic structure but empowered and engaged in an organic one. • Score Interpretation: Your score helps explain these feelings by aligning with your preferences. A high score for organic structures might indicate why you felt more satisfied in such environments, while a low score could explain discomfort in highly structured settings. This understanding can guide you in choosing future roles or improving your current work environment to better match your preferences. TEACHING NOTES FOR CONWAY MANUFACTURING CASE INCIDENT 1. Describe the structure of Conway Manufacturing. What are some of the problems that Conway is having? Is organizational structure a factor? Answer: The structure of Conway Manufacturing is a classic functional departmentation. That is, employees with closely related skills and responsibilities (functions) are located in the same department. Thus, those with skills in sales and advertising are assigned to the marketing department, and those with skills in research are assigned to the research and development department. The main problems that Conway is having stem from the disadvantages of functional departmentation. These disadvantages include a high degree of differentiation – differences in terms of goals, time spans, and interpersonal styles - between functional departments, poor coordination, slow response to organizational problems, open conflict between departments, and neglect of customers’ needs. 2. What would be the most effective structure to design new, high-quality products in a short period of time? What are some methods for improving coordination? Answer: Conway needs an organizational structure that will improve coordination between the functional specialties and increase the response time to develop new products. One possibility would be a matrix departmentation in which employees remain members of their functional department while also reporting to a product or project manager. A project manager might be assigned to each one of Conway’s best selling products. Members of each of the functional departments (i.e., research and development, engineering, production, and marketing) would then report to the project manager as well as the manager of their own function. This would be similar to the use of cross-functional teams as described in Chapter 7. Being focused on a particular product or project can lead to better communication among the representatives from the various functional areas. Another possibility would be a boundaryless organizational structure. The boundaries that divide employees such as hierarchy, job function, and geography as well as those that distance companies from suppliers and customers can be broken down in order to improve coordination, cooperation, and communication among those groups who have a vested interest in improving the company’s products. As a result, employees and managers from different functions and specialties, customers, and suppliers can work together, share ideas, and identify the best ideas for the organization’s products. In addition, instead of being organized around functions, the organization would be made up of self-managing and cross-functional work teams that are organized around core business processes that are critical for satisfying customers’ needs. Improving coordination requires integration – coordination across differentiated departments. Each of the three methods of achieving integration discussed in the text can be considered. Liaison roles can be used so that a person serves as a link between two departments in order to achieve coordination between the departments. Task forces can be set up to design new products consisting of representatives from each department involved. This would probably be the best approach given that task forces are used to address coordination problems that involve several departments simultaneously, which is the case at Conway. Finally, integrators can also be used. They are organizational members who are permanently assigned to facilitate coordination between departments. They are especially useful for dealing with conflict between (1) highly interdependent departments, (2) which have very diverse goals and orientations, (3) in a very ambiguous environment. All conditions appear to hold for Conway. TEACHING NOTES FOR TROJAN TECHNOLOGIES INC. CASE STUDY 1. Discuss how Trojan Technologies coordinated labour in its early days. Answer: In the early days when Trojan had less than 50 employees and worked on a limited number of wastewater bids and projects, customer support was a collective effort across the entire company. Everyone often knew the details of all the major projects in process at any given time. There were as few as two employees in a “department” and every project received immediate and constant attention from start to finish. The “close-knit” nature of the workforce allowed for a seamless transition between “departments.” Employees were able to work on a project from start to finish and ensure the customer was satisfied. Thus, coordination in the early days was largely through mutual adjustment which relies on informal communication and processes to coordinate tasks. 2. Discuss the kind of departmentation and the related structure used by Trojan at the time the change is being contemplated. Critique it from the standpoint of differentiation and integration. Answer: The departmentation at Trojan was primarily functional and consisted of the following functional areas: marketing department, project engineering department, operations department, service department, and a call centre at the head office which handled orders for replacement parts and was separate from the other departments. There is also some product departmentation in that Trojan has a smaller product line, the cleanwater segment which focuses on a different customer base from wastewater. Finally, with branch offices set up in The Hague, Netherlands and California there is some geographic departmentation. With growth and expansion, there has been an increase in differentiation with each function focusing on its own goals, tasks, and problems and working autonomously. Communication has become focused internally within departments. When a particular department finished their components of a project, they immediately would turn their attention to other projects creating the potential for a lag before the next department picked up the customer files. As a result, coordination and integration across these differentiated departments has become a problem. There is a need for greater integration across the departments which have become highly differentiated. It has become increasingly difficult to ensure timely and effective communication on projects between departments. 3. Discuss the tensions between centralization and decentralization that Trojan faces. What are the merits and demerits of more or less centralization as they apply to Trojan? Answer: There is a structuring conflict within the service area on how best to serve the customer. The service department must respond to customer calls immediately. However, the timing of calls is uncertain and the geographic distribution of calls is not predictable. Thus, service employees could all be out servicing customers at one time or one area. It also required a great deal of traveling on the part of service employees. The uncertainty of the timing and unpredictability of geographic distribution, however, lent itself to the centralized pooling of resources that Trojan used. However, the constant travel on the part of service employees was a concern because it might lead to “burnout.” However, with a decentralized system service employees might not be used as efficiently. For example, service employees in one area might not be available but in other areas they are waiting for calls. A decentralized approach, however, would require less traveling for service employees who would be less likely to burnout. It might also mean that service employees would be able to respond more quickly to customers if they were placed physically as close to the end-customer as possible. 4. The Trojan call centre actually uses technology to supplement organizational structure. Explain this. Answer: The head office call centre was created to ensure a reliable response to calls for assistance from customers. This was in response to the constant travel required of service employees which presented a risk of “burnout.” Service technicians who were at risk for burnout were now able to respond to many customer situations over the phone. The technology involved sophisticated remote monitoring of the UV installments. The technology supplements the organizational structure because it enables the service employees to respond immediately to customer calls and to be able to monitor the UV installment that would normally require one to be present at the site. Thus, it provides a kind of geographic departmentation in that it enables the service employee to service a customer in any geographic region. It also provides some decentralization to what is a centralized pooling of resources as described in the previous question. 5. Given the material in the chapter, reflect on how the change in size due to business growth has affected Trojan. Answer: The increase in size has made the organization more complex and resulted in coordination problems. The departments have grown and coordination and transition problems have made it more difficult to service customers in a timely manner. It has become impossible for everyone to know all the customers and active projects. Timely and effective communication on projects between departments has become more difficult and the situation has been described as one where “things began to slip between the cracks” in terms of customer service excellence. Growth has made it increasingly difficult to maintain service levels to the end-customer. Company growth also made it difficult to ensure that employees received adequate training. 6. What kind of departmentation and structure is being contemplated at the end of the case? Answer: At the end of the case, the structuring team refers to a regional, team-based approach to customer interaction that would replicate the structure used by the company in the early days. In other words, they are contemplating a geographic departmentation that would allow teams to deliver the organization’s products and services in a specific geographic territory. Further, if this is to replicate the structure used by the company in the early days, then it would mean that the teams would work on a project from start to finish and ensure the customer was satisfied. 7. Compare the current and contemplated structures in terms of responsiveness to customers. Answer: The current structure has had a negative effect on customer responsiveness and service. This stems in part from the growth and increasing complexity of the functional departmentation and increased differentiation. As indicated in the case, “things began to slip between the cracks” in terms of customer service excellence because it was no longer possible for employees to shepherd a project through the company from start to finish as had been done in the early days. With the current structure, customers must deal with as many as four different departments when they purchase a product. When a department completes its part of a project they move on to other projects which creates the potential for a lag before the next department picks up the customer file. The new structure with teams servicing a particular region, would allow for much more immediate responses to customers and it would also ensure that the customer is taken care of by the same team from start to finish thereby preventing the so-called slips between the cracks. It would prevent a lag between stages of the process and like the early days, ensure that everyone is familiar with the details of all the major projects in process at any given time. There is also the benefit of being physically close to the customer when they require assistance and therefore being able to provide quick response for in-person assessments and action by service employees. CHAPTER 15 ENVIRONMENT, STRATEGY, AND TECHNOLOGY SAMPLE ANSWERS TO DISCUSSION QUESTIONS 1. Construct a diagram of the various interest groups in the external environment of CBC Television. Discuss how some of these interest groups may make competing or contradictory demands on the CBC. Now do the same for your organization or the most recent organization you worked in. Answer: The interest groups might include the following: The general viewing public; commercial advertisers; public service groups seeking free air time; the CRTC; groups concerned with too much emphasis on stories about sex and violence; television critics; television production companies, and so on. A common contradictory demand is reflected in the divergent views of production companies and groups concerned with the coverage of sex and violence on television. The production companies decry censorship while the citizens’ groups demand “clean” programming. The fray is often joined by local stations who refuse certain programming and commercial sponsors who fear boycotts of their products. Students should be able to come up with similar examples of organizations they have worked at noting how some interest groups made competing or contradictory demands on the organization. 2. Give an example of vertical integration. Use the concept of resource dependence to explain why an organization might choose a strategic response of vertical integration. Answer: A paper-making company integrated backward by buying a forestry company and forward by establishing a wholesale paper supply company. Organizations that are highly resource dependent are at the mercy of environmental shocks on the supply end (in this case wood) and on the distribution end (in this case paper sales to retailers). A vertical integration response helps smooth these environmental shocks, although it can bind an organization into an inflexible situation by virtue of its increased size and dedication to a single product. 3. Discuss how interlocking directorates can reduce environmental uncertainty and help manage resource dependence. Answer: A director who serves on one board can apply his or her experience to decision making on another board. For example, the person who sits on the board of a steel manufacturing company and an automobile manufacturing company can apply information about future car production to reduce uncertainty and manage resource dependence in the steel company. If the car manufacturer is using more plastics, the steel company had better develop a new product or search for additional markets. The interlocking directorate can also manage uncertainty and resource dependence more directly by providing a channel for better prices, payment terms, delivery schedules, and so on. This is especially likely to occur in “vertical” interlocks such as in the steel/auto example. 4. Explain why organizations operating in more uncertain environments require more organic structures. Answer: Organic structures are more adaptable than mechanistic structures and can respond more efficiently to the complexity and high rate of change that characterize uncertain environments. Organic structures are adaptable and responsive because they are less formalized, centralized, and specialized. Decision-making is less constrained and diffused further down the hierarchy. 5. Distinguish among pooled interdependence, sequential interdependence, and reciprocal interdependence in terms of the key problem each poses for organizational effectiveness. Answer: Pooled technologies require each unit in the system to “pull its weight” and act in accordance with organizational guidelines. Rules, regulations, and procedures are used to ensure uniformity among units and to provide a basis for identifying units that are not performing adequately. Sequential interdependence requires good communication links between adjacent units in the workflow sequence. Reciprocal interdependence demands excellent communication and coordination among all units. Mutual adjustment and development of a viable organic structure are necessary for such technologies to operate effectively. 6. Give an example of unit technology, mass technology, and process technology. For which type of technology are the prescriptions of the classical organizational theorists best suited? Answer: Unit technology includes the tailoring of custom clothing or the fabrication of a few large units such as yachts. Mass technology includes assembly line work or large batch production such as is done in a bakery. Process technology includes the continuous production of products such as gasoline. Classical theorists would best manage mass technology, because a mechanistic structure is most suited to this technology. 7. Imagine that a company is converting from conventional mass technology to a highly flexible, computerized, integrated production system. List structural and behavioural problems that the company might have to anticipate in making this conversion. Answer: Advanced technology systems require flatter structures than conventional mass production systems. Middle managers who formerly handled much information processing and diagnosis are less necessary. Because of the high integration of the system, routine tasks such as ordering materials and scheduling production may become more centralized. On the other hand, decentralization of coping with non-routine problems may occur, putting decision making in the hands of systems specialists. Greater integration among functional specialists in design, marketing, and production will be necessary. Behavioural problems such as middle management resistance must be confronted, and workers must be trained in new tasks of a technical (computer operation) and human (social skills) nature. Jobs will have to be redesigned to correspond to the flexibility of the new system. This often results in job enrichment and a breakdown of traditional distinctions between crafts. 8. Discuss this statement: The effects of advanced information technology on job design and organizational structure are highly predictable. Answer: In fact, advanced information technology is highly flexible in its applications, to the extent that the same systems could have opposite effects. For example, systems that monitor and control (e.g., by timing phone operators’ time per customer) can also be used to provide positive, non-threatening feedback. Thus, information technology is not highly deterministic of job design or organizational structure. Its impact often depends on management values and organizational culture. 9. What is the meaning of the expression “the two faces of advanced technology” and what are the implications of advanced technology for organizational structure and job design? Answer: The two faces of advanced technology means that a given form of advanced information technology can have exactly opposite effects, depending on how it is employed. For example, a technology that can de-skill jobs can also build skills into jobs. This is because information technology is so flexible. In general, advanced manufacturing technology tends to result in flatter, more organic structures and the design of jobs according to the principles of job enrichment. Advanced office technology has enabled a reduction in the number of supervisory and middle-management personnel and enables a wider range of people at more levels to be involved in organizational decision making. As for job design, for clerical and secretarial employees there is the potential for de-skilling and reduced motivating potential. However, technology can upgrade skills if it is used to optimal capacity and the work is not highly fragmented. 10. Why are mergers and acquisitions a common and popular form of strategic response? What are the advantages and disadvantages of each? Answer: Mergers and acquisitions are popular forms of strategic responses because they can reduce environmental uncertainty and resource dependence and they have a number of advantages. For example, they are often stimulated by simple economies of scale. They can also be an attempt for greater vertical integration. They can occur within the same industry or across different industries. When they occur in the same industry they can help to reduce the uncertainty associated with competition. When they occur across different industries, they can reduce dependence on a particular segment of the environment. As a result, if resources become threatened in one part of the environment, the organization can still survive in another part of the environment. A good example of some of the other advantages of mergers and acquisitions can be found in the You Be the Manager feature, Loblaw Companies Limited Buys T&T Supermarket. A disadvantage of mergers and acquisitions is the difficulty and challenge of integrating organizations with different cultures and the high potential for failure. The greatest threat to the success of a merger or acquisition is the potential clash of cultures of the two firms. Strong cultures can mix as badly as oil and water when a merger or acquisition pushes them together under one corporate banner. Thus, although mergers and acquisitions are an increasingly common strategic response, they often do not work and many result in failure. The primary reason for such problems is the inability to merge the cultures of the two organizations. SAMPLE ANSWERS TO INTEGRATIVE DISCUSSION QUESTIONS 1. Consider the effect of environmental uncertainty and resource dependence on power and politics in organizations. To what extent is subunit power and organizational politics a function of environmental uncertainty and resource dependence? Does environmental uncertainty and resource dependence predict and explain the distribution and use of power and politics in organizations? Answer: Environmental uncertainty and resource dependence are important for understanding power and politics in organizations. Subunit power is the degree of power held by various organizational subunits. Subunits obtain power through the control of strategic contingencies - critical factors affecting organizational effectiveness that are controlled by a key subunit. This means that the work performed by other subunits is contingent on the activities and performance of a key subunit. The conditions under which subunits can control strategic contingencies involve scarcity, uncertainty, centrality, and substitutability. Environmental uncertainty exists when the external environment is vague, difficult to diagnose, and unpredictable. Uncertainty obscures cause and effect relationships, stimulates political jockeying, and increases information processing demands. Increasing uncertainty has several predictable effects on organizations including being less clear about cause-and-effect relationships, more difficulty agreeing on priorities, and more information must be processed by the organization to make adequate decisions. Organizations will act to cope with or reduce uncertainty because uncertainty increases the difficulty of decision-making and thus threatens organizational effectiveness. Since organizations dislike uncertainty, those subunits with the ability to cope with the unexpected are most likely to obtain power. Those functions that can provide the organization with greater control over what it finds problematic and can create more certainty will acquire more power. For example, the intervention of governments into human resource policies has allowed human resource departments to gain power by coping with the various uncertainties. Resource dependence refers to the dependency of organizations on environmental inputs, such as capital, raw materials, and human resources. Carefully managing and coping with this resource dependence is a key to survival and success. Although all organizations are dependent on their environments for resources, some organizations are more dependent than others. Subunits tend to acquire power when they are able to secure scarce resources that are important to the organization as a whole. When resources such as budget dollars become scarce, subunits that are able to secure additional resources from outside the organization can obtain power. For example, university departments that have the ability to bring in external funding through consulting contracts and research grants gain power in this way. In effect, they reduce the organization’s dependence on the environment. Thus, environmental uncertainty and resource dependence have implications for subunit power in organizations because those subunits that can reduce uncertainty and make the organization less dependent on the environment for scarce resources will have more power. Furthermore, to the extent that such power is used in the pursuit of self-interest within an organization, environmental uncertainty and resource dependence also have implications for organizational politics. In sum, environmental uncertainty and resource dependence can predict and explain the distribution and use of power and politics in organizations. 2. How does technology influence job design? Discuss the effect of technology according to Perrow, Thompson, and Woodward on the following approaches to job design described in Chapter 6: traditional views of job design, the Job Characteristics Model, job enrichment, and relational job design. Answer: Although job design is covered in Chapter 6 on Motivation in Practice, it is important that students understand how technology can influence the way jobs are designed. The effect of technology on job design can be understood by relating the basic dimensions of technology to the different approaches to job design. According to Perrow, technological routineness is a function of exceptions and problems. The exceptions and problems dimensions can be arranged to produce a matrix of technologies. Craft technologies typically deal with standardized inputs and outputs, but analysis of exceptions may be difficult. Routine technologies deal with standardized inputs and outputs, and problems can be easily analyzed. Non-routine technologies deal with exceptional inputs and outputs, and analysis is often difficult. Engineering technologies encounter many exceptions of input or required output, but these exceptions can be dealt with using standardized responses. In terms of job design, routine technologies such as assembly-line operations tend to consist of jobs designed according to the principles of scientific management. Non-routine technologies such as a research unit tend to have enriched jobs that are high on the core job characteristics. Craft and engineering technologies fall between routine and non-routine. The relational architecture of jobs refers to the structural properties of work that shape employees’ opportunities to connect and interact with other people who benefit from their work. Workers involved in non-routine technologies would be most likely to see the impact of their work on others. Thompson’s technological interdependence refers to the extent to which organizational subunits depend on each other for resources, raw materials, or information. More interdependence requires increased coordination and communication. Thompson proposed three types of technology in increasing order of interdependence. Mediating technologies operate under pooled interdependence. Each organizational unit depends to some extent on the pooled resources generated by the other units. However, the units are fairly independent in terms of their activities. Long-linked technologies operate under sequential interdependence. Each unit is dependent on the resources generated by the preceding units to produce a product or service. Intensive technologies operate under reciprocal interdependence. All units require considerable interplay and mutual feedback to accomplish a task. In terms of job design, long-linked technologies such as mass production assembly lines usually are comprised of jobs designed according to scientific management. Intensive technologies such as a multidisciplinary research team consist of highly enriched jobs that are high on the core job characteristics. These jobs have the greatest potential for workers to connect with those who benefit from their work. Mediating technologies would fall between them. Joan Woodward classified technologies in terms of unit (production of single units or small batches), mass (production of large batches or mass production), and process (input transformed as an ongoing process) technologies. Mass production technology results in jobs designed according to scientific management. Specialization of labour, controls, and formalization are characteristic of such jobs. Unit and process technologies tend to consist of enriched jobs that are high on the core job characteristics and have the potential for workers to connect with those who benefit from their work. Unit production involves custom-building complete units to customer specifications. It relies on skilled labour, teamwork, and coordination by mutual adjustment and standardized skills. Process production requires workers who are skilled technicians who monitor and maintain the system and work in teams. Workers can monitor and maintain the machinery at their own pace. Informal relationships with supervisors replace close control. 3. Discuss the implications of mergers and acquisitions for organizational culture. In particular, consider mergers and acquisitions in light of the assets and liabilities of strong cultures. How will culture influence the success or failure of mergers and acquisitions, and what can organizations do to increase the chances of success? Answer: Although mergers and acquisitions are an increasingly common strategic response, they often do not work and many result in failure. The primary reason for such problems is the inability to merge the cultures of the two organizations. This is especially likely to be a problem when the two firms involved have strong cultures. While strong cultures tend to be good at coordination and conflict resolution and are often key to a firm’s financial success, they have a number of liabilities that can damage the potential success of a merger or acquisition. Strong cultures tend to be resistant to change which can work against the dramatic changes that are associated with mergers and acquisitions. Thus, a strong culture that was appropriate prior to a merger or acquisition might not be appropriate after a merger or acquisition. A strong culture can make it difficult to change, and might resist the formation of a new culture and more appropriate culture. Another problem might arise if one of the cultures is pathological. Pathological cultures threaten organizational effectiveness and they might also threaten the success of a merger or acquisition. However, the greatest threat to the success of a merger or acquisition is the potential clash of cultures of the two firms. Strong cultures can mix as badly as oil and water when a merger or acquisition pushes them together under one corporate banner. Thus, a critical factor for the success of mergers and acquisitions is to carefully manage the integration of the two cultures. This requires careful attention and understanding of each firm’s culture as well as an understanding of the kind of culture that the newly formed organization will require to succeed. Task forces and committees might be set up to work with members of each organization in the development of a new culture. SAMPLE ANSWER TO ON-THE-JOB CHALLENGE QUESTION: THE LEARJET 60XRS What environmental factors contributed to the termination of Bombardier’s business jet order? Comment on the role of environmental uncertainty and resource dependence. What can Bombardier do to reduce environmental uncertainty and resource dependence? What strategic responses should they consider and why? Answer: Changes in the external environment (events and conditions surrounding an organization that influence its activities) had an unexpected effect on Bombardier and contributed to the termination of its business jet orders. The most important component of the environment was the general economy and the global recession as well as competitors who sell used business jets. In addition, customers were changing their attitudes towards the use of business jets as corporate jets began to be seen as an example of the financial excess that contributed to the global recession. This also represents social and political factors in that public attitudes towards big business and executive pay contributed to public outrage and government interventions. As a result, business jet orders were being terminated and on the decline. This also provides a good example of the effects of environmental uncertainty and resource dependence. Environmental uncertainty is a condition that exists when the external environment is vague, difficult to diagnose, and unpredictable. Uncertainty depends on the environment’s complexity (simple versus complex) and its rate of change (static versus dynamic). Organizations try to cope with or reduce uncertainty because uncertainty increases the difficulty of decision-making and thus threatens organizational effectiveness. Bombardier faces a dynamic environment in which the components are in a constant state of change. The high degree of uncertainty prevented the company from being able to predict the termination of contracts and the decline in the use of business jets. Resource dependence refers to the dependency of organizations on environmental inputs, such as capital, raw materials, and human resources as well as outputs such as customers. Carefully managing and coping with this resource dependence is a key to survival and success. Some components of the environment such as customers represent valuable resources on the output end. Bombardier is dependent on customers to purchase its products and the customers of business jets have stopped using business jets to travel. The management and coping with this resource dependence is key to survival and success. Strategy is the process by which top executives seek to cope with the constraints and opportunities that an organization’s environment poses. What can Bombardier do to cope with environmental uncertainty and resource dependence? The obvious response is to have other products besides business jets and other customers besides business executives. This is of course what Bombardier does. As indicated on its webpage, Bombardier designs, manufactures, and sells the widest range of world-class products in the aerospace and rail transportation sectors including commercial and business jets, as well as rail transportation equipment, systems, and services. Bombardier Aerospace is the world’s third largest civil aircraft manufacturer. Its products and services include: business aircraft, commercial aircraft, amphibious aircraft, jet travel aircraft, specialized aircraft solutions, and aircraft services and training. In addition, Bombardier transportation leads the world in rail equipment manufacturing and servicing. This in effect represents a diversification strategy which means that Bombardier can continue to survive and prosper when one of its divisions (in this case business aircraft) is faltering because it operates other divisions in different environments. Thus, Bombardier is able to cope with the environmental uncertainty and resource dependence associated with its business aircraft division because of its diversification – it designs and manufactures other kinds of aircraft and it also operates in the rail transportation industry. Obviously, if it only had business aircraft it would be facing a more uncertain future. As it is, it can weather the storm facing business aircraft until things improve. What if this was about a company that was not so diversified? It might be looking at a merger or acquisition for the purpose of diversification. As indicated in the text (page 544), when mergers and acquisitions occur across different industries (a diversification strategy), the goal is often to reduce resource dependence on a particular segment of the environment. A portfolio is created (which is in effect what Bombardier has done – created a number of diversified portfolios) so that if resources become threatened in one part of the environment, the organization can still prosper. EXTRA ESSAY QUESTIONS 1. Explain why organizations operating in certain environments often employ mechanistic structures. Answer: Organizations in stable and predictable environments often use mechanistic structures due to their efficiency in handling routine tasks. Mechanistic structures, characterized by a high degree of formalization, specialization, and a clear hierarchy, are effective in environments where tasks are repetitive and changes are minimal. This structure provides clear roles and procedures, facilitating coordination and control. 2. Explain the minimum conditions under which an interlocking directorate exists. Answer: An interlocking directorate exists when individuals from one organization serve on the board of directors of another organization, creating a network of influence and connections. The minimum conditions for this include having at least one person who sits on the boards of multiple organizations, which facilitates information flow and potential strategic alignment between these organizations. 3. Explain why Woodward found that unit and process organizations performed well under organic structures. Answer: Woodward found that unit and process organizations, which deal with complex and non-routine tasks, performed better under organic structures because these environments require flexibility, innovation, and adaptability. Organic structures, with their decentralized decision-making and informal communication, enable these organizations to respond more effectively to changing conditions and complex tasks. 4. How is the concept of resource dependence related to the practices of vertical integration and interlocking directorates? Answer: Resource dependence theory posits that organizations seek to reduce their dependency on external resources by controlling their supply chain or securing strategic alliances. Vertical integration involves expanding the organization’s operations into different stages of production or distribution to control more resources. Interlocking directorates help organizations manage resource dependence by creating connections with other firms, influencing resource allocation, and enhancing strategic coordination. 5. Give an example of long-linked technology. What structure does this technology usually require, and why? Answer: An example of long-linked technology is an assembly line in manufacturing. This technology requires a mechanistic structure because it involves sequential, standardized tasks that benefit from formalized procedures, clear roles, and tight coordination. This structure ensures efficiency, consistency, and control over the production process. 6. How should organizations be structured to cope with environmental uncertainty? Answer: To cope with environmental uncertainty, organizations should adopt an organic structure that emphasizes flexibility, decentralized decision-making, and adaptive practices. This structure allows for quick responses to changes, encourages innovation, and fosters informal communication, which helps organizations navigate unpredictable and dynamic environments. 7. Discuss the connection between environment, structure, and effectiveness. Answer: The environment influences organizational structure and, in turn, affects effectiveness. In stable environments, mechanistic structures (with formal rules and centralized control) may be effective due to their efficiency and stability. In dynamic environments, organic structures (with flexibility and decentralization) enhance effectiveness by allowing quick adaptation and innovation. The key is aligning the organizational structure with the environmental demands to optimize effectiveness. 8. Discuss the implications of advanced technology for job design and organizational structure. Answer: Advanced technology often leads to more complex job designs and necessitates changes in organizational structure. It can lead to the creation of specialized roles, greater reliance on cross-functional teams, and more decentralized decision-making to handle the increased complexity and rapid changes. Organizations may need to adopt organic structures to facilitate coordination and integration across specialized functions. 9. Explain the meaning and implications of organizations as open systems. Answer: Organizations as open systems means they interact with and are influenced by their external environment. This perspective implies that organizations must adapt to external changes, such as market trends and regulatory shifts, to survive and thrive. It underscores the need for organizations to be flexible, responsive, and capable of managing relationships with external stakeholders. 10. When should an organization establish legitimacy and what are the ways that an organization can achieve legitimacy? Answer: An organization should establish legitimacy when it is new, entering new markets, or facing stakeholder scrutiny. Legitimacy can be achieved through: • Adhering to industry norms and regulations: Ensures compliance and builds trust. • Building relationships with key stakeholders: Engages with customers, suppliers, and partners. • Demonstrating competence and reliability: Shows consistent performance and quality. • Engaging in corporate social responsibility: Contributes positively to the community and environment. TEACHING NOTES FOR DIAGNOSING AN ORGANIZATION EXPERIENTIAL EXERCISE The purpose of this exercise is for students to learn how the degree of “fit” among organizational structure, environment, strategy, and technology influences the effectiveness of organizations. Students are instructed to choose an organization and to diagnose it in terms of the concepts covered in the chapter. To conduct the diagnosis, students should answer the questions on pages 560-561 of the text. This exercise is suitable for an individual or group project completed outside the class or a class discussion guided by the instructor. In the case of the group project completed outside the class, each group might choose and contact a local organization for information. Alternatively, library resources might be consulted to diagnose a prominent national or international organization. As the instructor, you might want to suggest one or more organizations. It might be particularly interesting to suggest an organization that has received considerable coverage in the press at the time of the course. When presenting or discussing their diagnosis in class, make sure students understand the influence of the environment on the organization and the links between strategy, structure, and technology. Make sure they understand why the organization is structured the way it is and the impact the environment has had on strategy and the organization’s structure. You might ask students to relate Lawrence and Lorsch’s research to their diagnosis. Do their findings support Lawrence and Lorsch? Students should also explain how the organization has managed uncertainty and resource dependence and how technology has influenced the organization’s structure and job design. TEACHING NOTES FOR EFFECTS OF ADVANCED INFORMATION TECHNOLOGY EXPERIENTIAL EXERCISE The purpose of this exercise is for students to learn about an organization that has implemented advanced information technology and the effect it has had on organizational structure and job design. Students should be able to explain the effect that the technology has had on the organization especially in terms of its structure and job design. To complete this exercise, students should answer the questions on page 561 of the text. This exercise is suitable for an individual, a group project completed outside the class, or a class discussion guided by the instructor. In the case of the group project, each group might choose and contact a local organization for information. You might suggest one or more organizations for this exercise. Alternatively, you can have students choose their own organization if they are currently employed or an organization they have previously worked for. The main requirement is that they choose an organization that has recently implemented some form of advanced information technology. When presenting or discussing the technology and their answers to the questions, make sure students understand the influence of the technology on the organization and the links between technology, structure, and job design. Make sure they understand why the organization has implemented the technology and its impact on the organization’s structure, job design, and employees. When discussing the effect of the technology on the organization’s structure, make sure students refer to the structural characteristics and methods of coordinating divided labour (questions 3a, b, c, and d). When discussing the effect of the technology on job design, make sure students refer to the various approaches to job design (questions 4a, b, c, and d). Make sure to ask students about any other effects the technology has had on employees and the organization. The exercise and discussion should conclude with some mention of the advice that should be given to organizations about the implementation of advanced information technology and the effects it can have on an organization’s structure, job design, and employees. TEACHING NOTES FOR THE TECHNOLOGY AT THE TORONTO DISTRICT SCHOOL BOARD CASE INCIDENT NOTE: THIS CASE INCIDENT CAN BE USED ALONG WITH THE ON-THE-JOB CHALLENGE QUESTION IN CHAPTER 2 (PLAYING HOOKY) AS THEY ARE RELATED. THE USE OF THE GPS TRACKING DEVICES FOLLOWS FROM THE INCIDENTS DESCRIBED IN THE CHAPTER 2 ON-THE-JOB CHALLENGE QUESTION. 1. Do you think the use of GPS tracking devices is a good use of technology? Explain your answer in terms of the two faces of advanced technology. Answer: The two faces of technology means that a given form of advanced information technology can have exactly opposite effects, depending on how it is employed. This is possible because information technology is so flexible that it enables it to be used in ways that have opposite effects (e.g., checking up on employees versus sending them more timely information). This flexibility gives organizations choices about how to organize work. In this case, the GPS tracking technology can be used to check up and monitor the behaviour and work of employees or it can be used to help employees keep track of their time and be a form of feedback for them. Thus, from the employees’ perspective it can be seen in a negative light as a form of control or in a positive light as a form of feedback. It can be seen as either giving employees more freedom and autonomy to keep track of their time or as a form to remove autonomy by constantly monitoring and controlling their every move throughout the day. 2. What effect do you think the GPS tracking devices will have on employees? What effect will it have on the organization? Answer: As indicated in the text, it is believed that the GPS tracking devices will reduce fuel consumption and optimize scheduling as well as increase the productivity of workers. Chris Bolton states, “It is important to know where the vehicles are at any time. What it really allows for is better oversight.” Thus, it is possible that the GPS tracking devices will have some benefits at least in terms of fuel consumption and scheduling. However, it is questionable if it will increase the productivity of workers. What it really comes down to is how the tracking devices are used and how they are perceived by employees. Based on Bolton’s comment and the issues that led up to this (see on-the-job challenge question in Chapter 2, Playing Hooky), this seems to be an attempt to monitor employees and keep track of where they are during the day. As a result, employees are probably going to see this in a negative light and as an attempt to control their behaviour and keep watch of them throughout the day. They will probably react negatively to it and find other ways to circumvent the system and do what they want. Thus, following from the notion of the two faces of technology, the tracking devices can have a positive effect on employees and the organization and if they can be used by employees to monitor their own performance or they can have a negative effect on employees and the organization and result in resentment and feelings of being controlled if they are used to monitor and track employees throughout the day. TEACHING NOTES FOR THE RISE AND FALL OF SATURN CASE STUDY This case should help students see how many of the topics discussed in the chapter come together. Saturn is clearly the result of environmental factors and various constraints and opportunities. Strategies to manage environmental uncertainty and resource dependence have been incorporated into the structure and work process. The philosophy and strategy of Saturn required an organizational structure that differs from the rest of GM and the more traditional approach to automobile manufacturing. There is also evidence of how structure is matched to technology. Thus, the Saturn experiment shows how the environment, strategy, structure, and technology are all linked right to the very end when the environment once again changed and spelled the end of Saturn. 1. Discuss the role that environmental constraints and opportunities may have played in the creation and fall of Saturn. What contributed to its inception and its end? Answer: A strong impetus for the Saturn venture was the $2,000 cost advantage per small car that Japanese competitors held at the time. However, cost reductions mean little unless the quality of the Saturn automobile is comparable with that of Japanese makes. To enhance quality, GM exercised particular control over parts suppliers, inducing them to locate within or near the plant to facilitate communication with Saturn engineering and manufacturing personnel. During the recessionary early 1980s, the general economy faltered, and unions lost considerable bargaining power. Union membership fell, and GM capitalized on changing social attitudes toward unions to forge an innovative contract with the United Auto Workers. However, an interest group, the National Right to Work Legal Defence Foundation, challenged the legality of the contract. This group, which provides legal aid to workers who do not wish to join unions, argued that it was improper for GM to specify the United Auto Workers as a bargaining agent in advance of any workers having been hired. The challenge failed. Several technological advances were exploited at Saturn, although not as many as GM envisioned at the start of the project. Still, the plastic body parts are innovative, as is a sophisticated paperless database operation. Finally, GM gambled that it could exploit a segment of customers that would not normally consider a domestic car—dedicated import buyers. It did not wish to develop a new car only to divert sales from existing GM product lines. Finally, the global automobile crises and recession spelled the end of Saturn as GM had to restructure itself and become leaner and more efficient. This meant the end of several of its brands including Saturn. Clearly, the inception and end of Saturn was the result of environmental constraints and opportunities. 2. Apply the concepts of environmental uncertainty, resource dependence, and strategy to the Saturn case. To what extent does the strategy correspond to the constraints and opportunities of the environment? Answer: Environmental uncertainty exists when the environment is vague, difficult to diagnose, and unpredictable. Resource dependence refers to the dependency of organizations on environmental inputs such as capital, raw materials, and human resources as well as outputs such as customers. Strategy is the process by which top executives seek to cope with the constraints and opportunities that an organization’s environment poses. Saturn used a number of strategies to manage environmental uncertainty and resource dependence. To control quality and reduce transport costs, much of the subassembly is done by suppliers that are located close to the plant or even within the plant itself. Parts that come from the outside are delivered precisely when they are needed and directly to the location where they are used in assembly. In terms of labour, GM agreed to a labour contract with the United Auto Workers in which the workers would be on salaries and restrictive work rules were eliminated. In exchange, GM provides performance incentives and profit sharing and 80 percent of the workforce is guaranteed lifetime employment security. The innovative agreement between GM and the United Auto Workers regarding Saturn is an attempt to cope with environmental uncertainty. General Motors’ strategy involved guaranteeing itself a ready supply of flexible labour at somewhat less than the going wage rate at its other plants. 3. Consider the relationship between the strategy and structure of the Saturn plant. What came first and how and why is the structure different from the rest of GM? Answer: Part of the GM Saturn organization strategy is to reduce the development time for new models and to get them to the market more quickly. It was also to be a testing ground for innovations that could be applied throughout the rest of the organization. To implement the strategy, the company opted for a flatter, more organic, less bureaucratic structure for Saturn. The more traditional, hierarchical and bureaucratic structure would not be likely to result in innovations such as getting new models to the market more quickly. Thus, in the case of GM Saturn, the strategy came first and determined the structure, rather than the other way around. This is a reasonable approach given that GM Saturn involved the formation of a new organization and a new approach to manufacturing automobiles. The structure differs from the more mechanistic structure found in the rest of GM which was necessary in order to be able reduce development time. Such a structure was also necessary in order to overcome the traditional difficulties of automobile manufacturing. 4. What strategic responses were used by Saturn to try to cope with environmental uncertainty? What other strategic responses might have been considered? Answer: As indicated above, a key strategic response was the organizational structure of Saturn which was flatter and more organic than the rest of GM. As a result, tasks traditionally performed by management are now performed by assembly workers and self-managed teams assemble the cars, maintain their own equipment, order supplies, set work schedules, and even select new team members. Employees also participate in a consensus-based decision-making process. In terms of other strategic responses, there is a form of vertical integration in that much of the subassembly is done by suppliers that are located close to the plant or even within the plant itself. This is a way of exerting greater control over sources of organizational supply. Technology as described below also represents a strategic response. Establishing legitimacy was also probably important as shown by the establishment of the Group of 99 with members of the UAW, GM managers and staff from 55 plants and 14 UAW regions. 5. Describe the technology of Saturn in terms of Perrow’s routineness, Thompson’s interdependence, and Woodward’s production processes. Does the structure fit the technology? Explain your answer. Answer: In Woodward’s terms, the core technology at Saturn is obviously mass production. However, some of its unique features, such as building automatic and manual transmissions on the same line to exactly match a car order, mean that the technology is somewhat less routine (in Perrow’s terms) than the conventional monolithic assembly line. Instead of passing designs from department to department (Thompson’s sequential interdependence), early involvement of all critical departments was obtained (Thompson’s reciprocal interdependence). According to Perrow, routine technologies should function best under mechanistic structures, while non-routine technologies call for more organic structures. According to Thompson, mediating and long-linked technologies should be structured mechanistically while intensive technologies require intensive coordination which is best achieved by mutual adjustment and an organic structure. According to Woodward, unit and process technologies have organic structures, while mass production uses mechanistic structures. Thus, all three suggest a leaning towards a more organic structure which is consistent with the flatter and more organic structure of Saturn compared to the rest of GM. 6. Describe the nature of advanced manufacturing technology at Saturn. What effect did the technology have on organizational structure and job design? Answer: As indicated in the text, advanced manufacturing technology often results in a movement toward flatter, more organic structures to capitalize on the technology’s flexibility and greater integration among specialties. Some things might become more highly centralized while in other cases decentralization might be called for. This suggests the increased use of integrators, task forces, planning committees, and other mechanisms that stimulate coordination. With respect to job design, technology can reduce worker control and water down existing skills or provide the ability for employees to have greater input into their jobs and enrich skills. Since advanced technology tends to automate routine tasks, operative workers usually acquire advanced skills and they must be flexible and fast to respond to problems. As a result, the design of jobs for advanced manufacturing technology often follows the principles of job enrichment and self-managed teams. The design of the Saturn organization shows evidence of an attempt to match structure to technology. The shop floor organization, with its work teams and reduced supervision, is more organic than is typical for the North American auto industry. This is also reflected in the managerial and professional ranks, in which the technology for designing cars was modified. Early involvement of all critical departments also points to a more organic structure backed up by sophisticated electronic aids to facilitate coordination and communication. The changes in technology also required the enrichment of the assembly workers jobs. The formation of self-managing teams in which team members maintain their own equipment, order supplies, set work schedules, and select new team members represents a major change in job design. Thus, the advanced manufacturing technology of Saturn had the expected effects on the structure (flatter and more organic) and the design of jobs (greater employee input into their jobs and enriched skills). 7. What does the story of Saturn teach us about the linkages between environment, strategy, and technology? What lessons can be learned from the Saturn experiment? Answer: The story of Saturn demonstrates the linkages between environment, strategy, and technology. The origin of Saturn was the result of the need to compete in the small-car market where Japanese manufacturers held a cost advantage. This led to the strategy of separating Saturn from the existing corporate structure in order to overcome the traditional difficulties of automobile manufacturing. The strategy was to reduce the development time for new models and to get them to the market more quickly. It was also to be a testing ground for innovations that could be applied throughout the rest of the organization. As a result, Saturn opted for a flatter, more organic, less bureaucratic structure. The more traditional, hierarchical and bureaucratic structure would not be likely to result in innovations such as getting new models to the market more quickly. Thus, the strategy came first and determined the structure. This is a reasonable approach given that GM Saturn involved the formation of a new organization and a new approach to manufacturing automobiles. The structure differs from the more mechanistic structure found in the rest of GM which was necessary in order to be able reduce development time. Such a structure was also necessary in order to overcome the traditional difficulties of automobile manufacturing. The implementation of the strategy and structure had implications for technology. The design of the Saturn organization shows evidence of an attempt to match structure to technology. This had implications for how the cars were to be built or the technology – those activities, equipment, and knowledge necessary to turn organizational inputs into desired outputs. The technology of building Saturn cars was a result of the new strategy and it involved providing employees with a sense of ownership and better understanding of the business. Employees performed tasks that were traditionally performed by management. They were extensively trained and participated in decision making through a consensus-based process in which they were involved in decisions that affected them. The shop floor organization, with its work teams and reduced supervision, is more organic than is typical for the North American auto industry. This is also reflected in the managerial and professional ranks, in which the technology for designing cars was modified. Early involvement of all critical departments also points to a more organic structure backed up by sophisticated electronic aids to facilitate coordination and communication. The changes in technology also required the enrichment of the assembly workers jobs. The formation of self-managing teams in which team members maintain their own equipment, order supplies, set work schedules, and select new team members represents a major change in job design. The story of Saturn demonstrates how the environment was responsible for the strategy that led to the creation of Saturn, and the Saturn strategy had direct implications for structure and the technology used to build Saturn cars. Of course, when the environment changed the Saturn strategy was no longer viable and this led to its demise. However, some of the technology that was created in the design of Saturn vehicles as part of the new approach to building automobiles such as collaborative work practices, teams, and work role flexibility, have in fact spread throughout the rest of GM. What can we learn from the Saturn experiment? For starters, it demonstrates the importance of strategy and structure in responding to the environment as well as the need to match technology to strategy. The Saturn story also shows us how difficult it is to implement a new strategy and innovations in a large organization. Some say that if the Saturn strategy had been adopted throughout the auto industry the situation facing North American auto makers during the recent economic crises would have been very different. Others say that Saturn represents a missed opportunity for building more competitive fuel-efficient cars and for better labour-management relations throughout the auto industry. Interestingly, today’s more flexible plants such as Ford Motor’s Michigan Assembly Plan described at the beginning of the chapter, require specially trained workers who have more skills, are more flexible, and are more involved in their work. Perhaps the Saturn experiment has had more of an impact on the auto industry than we think! CHAPTER 16 ORGANIZATIONAL CHANGE, DEVELOPMENT, AND INNOVATION SAMPLE ANSWERS TO DISCUSSION QUESTIONS 1. Describe an example of resistance to change that you have observed. Why did it occur? Answer: A young man with a recent M.B.A. was hired to head an important branch of a government agency. He was the first of several “new look” executives the government had hired to upgrade the administrative skills and practices in the agency. The young man was sure that the long-time bureaucrats that staffed the branch could improve its operations and efficiency if they pooled their efforts. To this end, he established a program of Management by Objectives and participation that was to extend throughout the branch. After a year, the manager was dismayed to find that the program was not working — his employees were simply “going through the motions,” and the programs were considered something of a joke by the bureaucrats. The lower level managers had resisted the programs because they found them a threat to their power. They had implemented the programs in a way that would be sure to result in their failure. 2. You have been charged with staffing and organizing an R&D group in a new high-tech firm. What will you do to ensure that the group is innovative? Answer: In terms of staffing, you might look for people with very high technical expertise in their specialty. A record of past creativity (showing the presence of creativity-related skills) would be helpful. Also, people who are likely to be truly intrinsically motivated by the particular kinds of projects the group is going to be involved in is also important. A diversity of experience would be good, as would be an interest in learning from others. Some people with active outside technical interests and connections would be good for their potential as technical gatekeepers. You should support them with generous funds for phones, databases, journal subscriptions, and so on. Finally, you should try to develop a succession and transfer plan so that the group does not get stale, reducing communication and productivity over time. Try to serve as an idea champion for the group and/or to cultivate line managers in this role as appropriate to the development of the idea. Keep the group small, informal, and organic to stimulate the free flow of information. 3. What qualities would the ideal gatekeeper possess to facilitate the communication of technical information in his or her firm? Answer: He or she would possess strong technical credibility inside and outside of the organization. Also, strong social skills are necessary to obtain and transmit new ideas. He or she would also be well read, creative, and able to tolerate ambiguity. 4. Suppose a job enrichment effort in one plant of a manufacturing firm is judged to be very successful. You are the corporate change agent responsible for the project, and you wish to diffuse it to other plants that have a similar technology. How would you sell the project to other plant managers? What kinds of resistance might you encounter? Answer: In selling the project, it would be useful to stress the objective benefits that should accrue to the manager and his or her own plant. In some cases, these benefits might be by-products of enrichment (such as reduced absenteeism), even if the original program was established to meet loftier, “softer” goals (such as humanizing the organization). It would also be useful to cite examples of the relative ease of implementing the program to show that worker resistance can be overcome. Management resistance might cite a different production process, a more militant union local, or some other factor that seems to differ from the pilot plant. Also, plant management might feel that it will not receive the top management support or the rewards for success that were offered to the management of the pilot plant. 5. What personal qualities and skills would be useful for an OD change agent to possess? Describe the relative merits of using an internal staff change agent versus an external consultant. Answer: It would be most helpful for the change agent to be perceived by all parties as expert, unbiased, and trustworthy. These qualities should minimize resistance, help provoke unfreezing, and establish a favourable climate for change. Perceived expertise means that the change agent has “something to give,” while trustworthiness and lack of bias mean that the agent has no “hidden agenda” behind his or her expertise. Internal change agents know the organization well and have a long-term stake in the success of change efforts. External change agents bring a fresh perspective to the organization and may be less susceptible to internal political pressures. 6. Discuss: The best organizational structure to generate innovative ideas might not be the best structure to implement those ideas. Answer: Generating innovative ideas is usually thought to occur best under organic structures. A lack of bureaucracy, little red tape, and informality (not to mention small size) seem to stimulate communication and cross-fertilization. Implementing innovative ideas may sometimes proceed best under a somewhat more mechanistic structure because the basic task is more routine. Of course, this doesn’t obviate the use of participation. 7. Discuss some of the things that an organization can do to improve organizational learning and to become a learning organization. What should organizations know about the linkages between organizational learning and change and innovation? Answer: Organizational learning refers to the process through which organizations acquire, develop, and transfer knowledge throughout the organization. There are two primary methods of organizational learning. First, organizations learn through knowledge acquisition. This involves the acquisition, distribution, and interpretation of knowledge that already exists but which is external to the organization. Second, organizations also learn through knowledge development. This involves the development of new knowledge that occurs in an organization primarily through dialogue and experience. Organizational learning can be improved by stimulating and encouraging knowledge acquisition and knowledge development. A learning organization is an organization that has systems and processes for creating, acquiring, and transferring knowledge in order to modify and change its behaviour to reflect new knowledge and insights. In order to become a learning organization, leaders must communicate a clear vision of the organization’s strategy and goals in which learning is a critical part and key to organizational success; the culture must support learning; employees need to be challenged to think, solve problems, make decisions, and act according to a systems approach by considering patterns of interdependencies and by “learning by doing”; there needs to be systems and structures to acquire, code, store, and distribute important information and knowledge so that it is available to those who need it, when they need it. Organizations should know that learning is a key requirement for change and innovation. In other words, it is not possible to change or innovate without first learning. Recall that effective communication with the external environment and effective communication within the organization are vital for successful innovation. What is communicated is largely a function of knowledge acquisition and development. Therefore, organizations must improve their learning and ideally become a learning organization in order to facilitate change and innovation. 8. Debate this statement: Survey feedback can be a problematic OD technique because it permits people who are affected by organizational policies to generate data that speak against those policies. Answer: Although the response is a matter of opinion, the statement makes some assumptions that are worthy of attention. One assumption is that the responses collected by surveys will always be negative. Clearly, this is untrue, and surveys enable the organization to see what are considered its positive, as well as negative, points. Furthermore, the feedback mechanism publicizes these positive points to all employees. A second assumption is that negative responses will be wrong or problematic rather than constructive and useful. Third, the statement assumes that surveys are a poor mechanism for gathering data about organizational policies. On the contrary, a scientific survey would seem to be much more useful than hearsay, and employees will have developed views about policy whether or not they are surveyed. Finally, the statement assumes that the organization must react in a knee-jerk fashion to survey results. In fact, the results should guide, rather than dictate, organizational policy. Statement for Debate: Survey feedback can be a problematic OD technique because it permits people who are affected by organizational policies to generate data that speak against those policies. In Favor of the Statement: 1. Bias and Self-Interest: Employees who are directly affected by organizational policies may provide feedback that reflects their dissatisfaction or self-interest rather than objective observations. This can result in skewed data that may unfairly criticize policies without considering their overall effectiveness or benefits. 2. Resistance to Change: Employees may use survey feedback as a platform to voice their resistance to organizational policies, which can lead to a focus on negative aspects and hinder constructive discussions about potential improvements. This resistance can create a biased view of the policies, making it challenging to address underlying issues effectively. 3. Limited Perspective: Those who are affected by policies may lack a comprehensive understanding of the reasons behind these policies or the broader organizational context. Their feedback may, therefore, be based on partial or uninformed views, potentially leading to recommendations that do not align with the organization’s strategic goals. Against the Statement: 1. Valuable Insights: Survey feedback provides valuable insights into employee perceptions and experiences with organizational policies. This feedback can reveal issues and areas for improvement that management might not be aware of, leading to more informed decision-making and the opportunity to address concerns that impact employee satisfaction and performance. 2. Encourages Transparency: Allowing employees to voice their opinions through surveys fosters transparency and trust within the organization. It demonstrates a commitment to listening to employees and addressing their concerns, which can enhance engagement and morale. 3. Opportunity for Improvement: Constructive criticism and feedback can be a catalyst for positive change. By identifying areas where policies may be flawed or misaligned with employee needs, organizations can make necessary adjustments to improve overall effectiveness and employee well-being. 4. Broad Scope of Data: While individual feedback may reflect specific concerns, survey feedback typically encompasses a wide range of responses from various employees. This broader data set helps in understanding patterns and trends, providing a more balanced view rather than relying on isolated or extreme opinions. Conclusion: Survey feedback can indeed pose challenges, such as potential bias and resistance, but it also offers significant benefits by providing valuable insights and fostering transparency. The key is to approach survey feedback with a balanced perspective, recognizing its limitations while leveraging its strengths to drive meaningful organizational improvements. SAMPLE ANSWERS TO INTEGRATIVE DISCUSSION QUESTIONS 1. Do leadership, organizational culture, and communication influence the effectiveness of organizational change programs? Discuss the effect that leadership behaviour, strong cultures, and personal and organizational approaches to communication have on the change process and change problems. What should organizations do in terms of leadership, culture, and communication to overcome problems and ensure that the change process is effective? Answer: Leadership, organizational culture, and communication are all important in organizational change. To begin with, leadership is required to provide strong support for a change program and throughout the change process. The success of a change program is highly dependent on the way that change is implemented and managed. Transformational leadership is particularly relevant for organizational change and for overcoming resistance to change. Transformational leaders are effective because they unfreeze current thinking and initiate new practices that constantly examine and question the status quo. Transformational leaders have been found to use a number of unfreezing practices to create a revised vision of what the organization can do or be. Organizational culture is also an important factor. In fact, one of the most important changes that an organization can make is to change its culture. Culture is so critical to change that the main reason reported for the failure of organizational change programs is the failure to change an organization’s culture. In fact, as noted in Chapter 8, one of the liabilities of a strong culture is resistance to change. As a result, a strong culture can damage an organization’s ability to innovate and change. Therefore, a change in culture must be considered as part of a change program. Finally, communication is a key factor for the success of organizational change. As noted in the section on dealing with resistance, communication is a key mechanism for dealing with resistance. It is critical that lower-level managers understand the diagnosis underlying an intended change and the details of the change so that they can accurately convey this information to employees. Management needs to take the time to communicate with employees about a change program and the change process by using a number of mediums. Particularly important is the use of information rich media given the importance of change and the emotional nature of change programs. 2. How can organizational learning practices, pay, and socialization influence organizational learning and innovation in organizations? Design a program to improve an organization’s ability to learn or generate and implement innovative ideas that combines organizational learning practices (Chapter 2), pay systems (Chapter 6), and socialization methods (Chapter 8). What effect does organizational culture have on an organization’s ability to learn and innovate? Answer: Innovation is the process of developing and implementing new ideas in an organization. In order to influence innovation in organizations, there a number of things that organizations can do. First, learning practices such as organizational behaviour modification and employee recognition programs can be designed to reward and reinforce innovative behaviour. Second, pay systems can be designed to provide incentives to employees who develop and implement innovative ideas. Third, socialization programs can be designed so that new hires learn the importance of innovation during their socialization. In effect, a rigorous socialization program can ensure that new hires understand that innovation is a core organizational value. An organizational culture that encourages and supports innovation is also likely to be an important factor in an organization’s ability to develop and implement new ideas. Organizational learning is the process through which organizations acquire, develop, and transfer knowledge throughout the organization. There are two primary methods of organizational learning. First, organizations learn through knowledge acquisition. This involves the acquisition, distribution, and interpretation of knowledge that already exists but which is external to the organization. Second, organizations also learn through knowledge development. This involves the development of new knowledge that occurs in an organization primarily through dialogue and experience. Organizational learning can be improved by stimulating and encouraging knowledge acquisition and knowledge development. This can be aided by learning practices such as organizational behaviour modification and employee recognition programs that reward, reinforce, and recognize employees’ for their acquisition and development of knowledge. Second, pay and incentives can be tied to knowledge acquisition and development. Third, socialization programs can be designed so that new hires are made aware of the importance of learning and their role in knowledge acquisition and development. A rigorous socialization program can ensure that new hires understand that learning is a core organizational value. An organizational culture that encourages and supports learning is also likely to be an important factor in an organization’s ability to learn. 3. Review the chapter opening vignette on Best Buy and identify some of the most relevant issues that have been covered in previous chapters. In particular, consider the vignette in terms of some of the following topics: (1) Learning (Chapter 2), (2) Perceptions (Chapter 3), (3) Groups and teamwork (Chapter 7), (4) Culture (Chapter 8), (5) Leadership (Chapter 9), (6) Communication (Chapter 10), (7) Organizational structure (Chapter 14), and (8) Strategy (Chapter 15). Answer: The Chapter opening vignette provides a great example of organizational changes in strategy and culture. However, it is much more. The issues associated with the Best Buy story touch upon many other topics in organizational behaviour that have been covered in the text. As a result, it is a great way to review and conclude the course. You might ask students to reflect on some of the things they have learned about organizational behaviour in your course that are evident and relevant in the Best Buy vignette. Here are some of the things that might be worth discussing in each of the eight topic areas: 1. Learning. Learning has been fundamental to the continual renewal of Best Buy beginning with Dick Schulze learning the importance of turning inventory over unit margins and the need to make discount shopping enjoyable for the consumer. Learning was also important for employees, especially for learning the firm’s customer-centric approach. 2. Perceptions. The Best Buy strategy helped to create the perception that the company was focused on the customer and was a cost leader in the industry. 3. Groups and teamwork. As indicated in the vignette, Best Buy stores consist of sales teams and they are encouraged to predict customer wants, not just satisfy them. Further, the company empowered local management teams to meet the needs of customer segments. 4. Culture. The focus on the customer is central to the Best Buy culture and in fact its customer-centric approach generated a 22 percent growth in earnings by 2006. 5. Leadership. Leadership played a key role in the evolution of Best Buy and in the execution of strategy not only from its founder, Dick Schulze, but also from Brad Anderson who took over from Schulze as CEO. Particularly important is strategic leadership: a leader’s “ability to anticipate, envision, maintain flexibility, think strategically, and work with others to initiate changes that will create a viable future for the organization. 6. Communication. Communication plays an important role in communicating to customers and employees the Best Buy culture and strategy. 7. Organizational structure. Best Buy quantified the profitability of each customer segment and characterized each segment in terms of its needs. Value propositions were established for each segment and local management teams were empowered to meet the needs of these segments. This structure helped to support the customer-centric approach. 8. Strategy. Strategy has been key to Best Buy from the beginning with its continual renewal strategy that included a series of progressive concepts to bring the company as close to the customer as possible. The various concepts included: adopting the name Best Buy and a focus on a niche market, the adult male shopper; being a cost leader within the industry; increase profitability by combining both low- and high-end products within the same store; tailoring products to consumer needs and launching www.bestbuy.com; a move toward selling solutions from selling individual items; and getting closer to the customer. Another example of strategy is the company’s international expansion. Brad Anderson picked up where Schulze left off and moved directly to Concept VII – getting closer to the customer. SAMPLE ANSWER TO ON-THE-JOB CHALLENGE QUESTION: THE HACKER WAY AT FACEBOOK Given that Facebook itself is the frequent target of malicious hacking, Zukerberg’s use of the term and glorification of the spirit of hacking is ironic. Why does he extol the Hacker Way? How is it connected to the concept of organizational learning? What does it signal to organizational insiders and outsiders about change and innovation? Answer: Mark Zukerberg most likely extols the Hacker Way as a means of reinforcing an organizational culture predicated on the need for continuous change directed toward innovation. This need is dictated by rapid change in technology and evolving norms concerning communication and the role of social media. Espousing the Hacker Way is also a motivational device that supports innovation, persistence, and perfection. The Hacker Way supports organizational learning by encouraging information sharing as a means for improvement. Hackathons are positive status contests that showcase the collective nature of innovation. The espousal of the Hacker Way has symbolic as well as instrumental aspects. It says that even though Facebook is now a large publically traded company, it is true to its roots, a good place to work that fosters self-expression, thus attracting and retaining bright talent. EXTRA ESSAY QUESTIONS 1. Give three reasons why change might be resisted and in each case give a tactic for overcoming resistance. Answer: 1. Fear of the Unknown: Employees may resist change due to uncertainty about how it will impact their roles. Tactic: Provide clear communication and training to explain the change and its benefits, and involve employees in the planning process to reduce uncertainty. 2. Loss of Control or Status: Change can threaten individuals’ perceived control or status within the organization. Tactic: Involve employees in decision-making and provide opportunities for feedback to ensure they feel valued and part of the process. 3. Increased Workload: Changes often come with additional tasks or responsibilities that can lead to resistance. Tactic: Offer support through resources, training, and time adjustments to help employees adapt to new responsibilities. 2. Describe sources of external and internal pressures to change. Answer: 1. External Pressures: Market competition, regulatory changes, technological advancements, and economic conditions can drive organizations to adapt to remain competitive and compliant. 2. Internal Pressures: Organizational growth, shifts in leadership, employee feedback, and operational inefficiencies can necessitate changes to improve performance and meet internal goals. 3. Discuss the factors that organizations can change and the implications of them. Answer: 1. Structure: Changing organizational structure can improve efficiency but may disrupt existing workflows and employee roles. 2. Processes: Modifying processes can enhance productivity but might require retraining and adaptation from staff. 3. Culture: Shifting organizational culture can boost morale and alignment with strategic goals but may face resistance from employees accustomed to the existing culture. 4. Technology: Implementing new technology can improve capabilities and competitiveness but may involve significant costs and learning curves. 4. What are the stages of the change process and what kinds of problems can occur at each stage? Answer: 1. Unfreezing: Recognizing the need for change. Problems can include denial or lack of urgency among employees. 2. Change: Implementing new methods. Issues may arise from resistance to new practices or inadequate training. 3. Refreezing: Stabilizing the change to make it permanent. Challenges can include insufficient reinforcement of the new behaviors or regression to old habits. 5. Discuss the effectiveness of organizational development techniques. What are some of the problems associated with evaluating organizational development interventions? Answer: Effectiveness: Organizational development techniques can enhance team dynamics, improve processes, and foster change. Techniques like team building, survey feedback, and process consultation are often effective in improving organizational performance and employee satisfaction. Problems with Evaluation: • Attribution Issues: Difficulties in isolating the impact of interventions from other factors affecting performance. • Measurement Challenges: Difficulty in quantifying qualitative outcomes like improved morale or teamwork. • Time Lag: The benefits of interventions may not be immediately visible, making it hard to assess their effectiveness promptly. 6. Differentiate between creativity and innovation. Answer: • Creativity: The ability to generate new and original ideas. It is about thinking outside the box and imagining possibilities. • Innovation: The process of implementing creative ideas into practical solutions or products. It involves turning ideas into actionable, value-creating outcomes. 7. Discuss the qualities of creative people. Can people be trained to be creative? Answer: Qualities of Creative People: Curiosity, open-mindedness, persistence, and risk-taking. Creative individuals often have a broad range of interests and are not afraid to challenge conventional thinking. Training Creativity: While some aspects of creativity can be fostered through training and practice, such as brainstorming techniques and problem-solving skills, intrinsic qualities like curiosity and risk tolerance may be more innate. Training can enhance and channel existing creative potential. 8. What are the factors that contribute to the diffusion of innovations? Answer: 1. Relative Advantage: The perceived benefit of the innovation over existing solutions. 2. Compatibility: How well the innovation fits with existing values, past experiences, and needs of potential adopters. 3. Complexity: The ease of understanding and using the innovation. 4. Trialability: The ability to experiment with the innovation on a limited basis. 5. Observability: The visibility of the benefits of the innovation to others. 9. Differentiate between survey feedback and team building. Answer: • Survey Feedback: A technique where employees complete surveys to provide feedback on various organizational aspects, which is then analyzed and used to make improvements. • Team Building: Activities and exercises designed to improve team cohesion, communication, and collaboration. It focuses on enhancing relationships and teamwork among group members. 10. Differentiate between organizational learning and learning organizations and describe how they are related. Why is organizational learning important for organizational change and innovation? Answer: • Organizational Learning: The process by which organizations acquire, share, and utilize knowledge to improve performance and adapt to changes. • Learning Organizations: Organizations that actively foster a culture and processes that support continuous learning and adaptation at all levels. Relationship: Organizational learning is a key component of a learning organization. Learning organizations emphasize continuous improvement and adaptability, leveraging organizational learning to drive change and innovation. Importance: Organizational learning helps organizations identify and respond to new opportunities and challenges, enabling them to innovate and remain competitive in a rapidly changing environment. 1. What is tolerance for ambiguity? What is your tolerance for ambiguity score and how does it compare to the average reported in the text (p.600)? Answer: Tolerance for ambiguity refers to an individual's ability to handle and embrace uncertain or ambiguous situations. It reflects how comfortable a person is with unpredictability and lack of clear structure. According to the text, the average score is around 45. Compare your own score to this average: if your score is lower, you likely have a higher tolerance for ambiguity, while a higher score suggests you may prefer more structured and predictable environments. 2. What role does personality play in organizational change? What role does tolerance for ambiguity play in organizational change? Answer: Personality influences how individuals react to organizational change. Traits like openness to experience and flexibility can make individuals more receptive to change. Tolerance for ambiguity plays a crucial role in this context; those with high tolerance for ambiguity are generally more adaptable and resilient in the face of change. They can better handle uncertainty and are often more proactive in navigating and implementing changes. 3. What role does personality play in creativity and innovation? What role does tolerance for ambiguity play in creativity and innovation? Answer: Personality traits such as openness to new experiences and risk-taking are closely linked to creativity and innovation. Individuals who are open-minded and willing to explore new ideas tend to be more creative. Tolerance for ambiguity is also vital for creativity and innovation, as it enables individuals to experiment with novel ideas and approaches without being deterred by uncertainty or the lack of clear outcomes. 4. Based on your tolerance for ambiguity score, what does it say about how you respond to and cope with change? What does it say about how creative and innovative you are? Answer: If your tolerance for ambiguity score is low, it indicates that you are likely more comfortable with uncertainty and change, which can facilitate a smoother adaptation to new situations. This high tolerance can also enhance your creativity and innovation, as you are more open to experimenting and exploring new ideas. Conversely, a high score suggests you might prefer structured environments and may need additional support to effectively cope with change and contribute to innovative processes. 5. Should organizations be concerned about employees’ tolerance for ambiguity? What are the implications of this and what can organizations do when they embark on a change program or want to enhance innovation? Answer: Yes, organizations should be concerned about employees' tolerance for ambiguity, as it affects their ability to handle change and contribute to innovation. Employees with high tolerance for ambiguity are generally more adaptable and better suited for roles that involve uncertainty and innovation. Organizations can address this by providing training and support to help employees develop their tolerance for ambiguity, creating a culture that embraces change, and offering clear communication and resources during transitions to mitigate the impact of uncertainty. TEACHING NOTES FOR LEADERSHIP JAZZ EXPERIENTIAL EXERCISE (APPLICATION TO CREATIVITY) This exercise was described in Chapter 9. Because the task involves creativity, this exercise can also be used with Chapter 16. Of course, the focus will be on creativity rather than leadership. As indicated in the instructor notes in Chapter 9, this exercise is from an article called “Leadership Jazz: An Exercise in Creativity” by Mark L. Lengnick-Hall and Cynthia A. Lengnick-Hall (1999; Journal of Management Education, 23(1), 65-70). A key focus of the article and exercise is the role of leadership in fostering creativity. As stated by the authors, “A key role of outstanding leaders is to unleash the creativity in their followers. To foster creativity in their followers, organization leaders must be like jazz leaders…” (p.65). Lengnick-Hall and Lengnick-Hall describe creativity as “a way of thinking that involves the generation of new ideas and solutions. It is the process of associating known things or ideas into new combinations and relationships.” (p.65). They further note that effective leaders must develop their own creative capacities and nurture creativity in their followers and that “an effective leader fosters an environment that allows the inherent creativity within individuals and groups to surface and result in productive outcomes.” (p.66). For the purpose of this chapter, you can run the exercise as described in Chapters 9 of the text except that you don’t assign a leader to the group. When you take up the exercise you focus more on group creativity and performance rather than leadership. Some things to focus on during class discussion are as follows: 1. What is creativity? Answer: Creativity is the process of generating new and original ideas or solutions by combining known elements in novel ways. It involves thinking outside conventional boundaries and coming up with innovative concepts that have not been previously explored. 2. What makes a person creative? Answer: A person is often considered creative if they exhibit traits such as openness to new experiences, curiosity, and the ability to think divergently. Creativity also involves the capacity to make unusual connections between ideas, persistence in pursuing innovative solutions, and a willingness to take risks and challenge the status quo. 3. What are creativity-relevant skills and how can they be improved? Answer: Creativity-relevant skills include divergent thinking, problem-solving, and the ability to generate a variety of ideas. These skills can be improved through practices such as engaging in brainstorming sessions, exposing oneself to diverse experiences and perspectives, and practicing mindfulness to enhance cognitive flexibility. Encouraging a supportive environment that values experimentation and exploration also helps in developing these skills. 4. How important is creativity for innovation in organizations? Answer: Creativity is crucial for innovation in organizations as it drives the development of new products, services, and processes. Creative thinking leads to novel solutions and improvements, helping organizations to stay competitive, adapt to changes, and address challenges in unique ways. Innovation often stems from the ability to think creatively and implement new ideas effectively. 5. What can organizations do to foster creativity? Answer: Organizations can foster creativity by creating an environment that encourages experimentation and risk-taking. This includes providing resources and time for creative pursuits, promoting a culture that values and rewards innovative thinking, offering training and development opportunities to enhance creative skills, and ensuring a supportive and open atmosphere where ideas can be freely shared and discussed. Some things you might ask the class that are more specific to the exercise are as follows: 1. What are some of the obstacles to creativity? Answer: Obstacles to creativity include a lack of time and resources, rigid organizational structures, fear of failure or criticism, and a lack of support from leadership. Additionally, an environment that discourages risk-taking or values conformity over innovation can hinder creative efforts. 2. What strategies did you use to create your musical instruments, choose a tune/song, and prepare for your performance? Answer: Strategies might include brainstorming and collaborating with group members to come up with creative ideas for the instruments, selecting a tune/song that allows for creative expression, and dividing tasks effectively to ensure all aspects of the performance are well-prepared. Emphasizing experimentation, flexibility, and leveraging each member's strengths can also enhance the creative process. 3. What roles did group members take during the exercise? Answer: Group members might take on various roles such as the leader who coordinates efforts, the designer who creates the musical instruments, the musician who performs, and the organizer who manages logistics and ensures the group's performance runs smoothly. Each role contributes to the overall creative outcome by focusing on specific aspects of the exercise. 4. What factors contributed to the group’s creativity? Answer: Factors contributing to the group’s creativity include open communication, a collaborative environment, diverse perspectives and skills among members, and a willingness to experiment and take risks. Encouraging and valuing each member’s input can also enhance the creative process and result in more innovative outcomes. 5. What else might have helped the group to be more creative? Answer: Additional factors that could enhance the group’s creativity include providing more time for brainstorming and experimentation, seeking external inspiration or feedback, offering resources for skill development, and creating a more relaxed atmosphere to reduce stress and encourage free thinking. Ensuring that all members feel equally involved and valued can also boost collective creativity. TEACHING NOTES FOR DANDY TOYS CASE INCIDENT 1. Comment on the change process at Dandy Toys. What advice would you give the President about how to improve the change process? What are some of the things that might be changed at Dandy Toys as part of the change process? Answer: The change process at Dandy Toys can be understood by examining the three basic stages of unfreezing, changing, and freezing and the issues in the change process. First, the surprise and shock of the managers in response to the new direction suggested by George Reed indicates a lack of unfreezing. In other words, there is no recognition among the managers that the current situation or state of affairs is unsatisfactory. After all, there does not appear to be any serious problem or threat facing the organization. Second, there does not appear to be any program or plan to move the organization to a more satisfactory state. Although George Reed suggests that a more satisfactory state would be the manufacture of new in-house quality toys, no program or plan is suggested as a way to achieve this. Third, there is no refreezing. That is, although some of the managers made suggestions for new toys, business continued as always and nothing really changed. There were not any new behaviours, attitudes, or structures to speak of. To improve the change process, George Reed needs to first ensure that unfreezing takes place. He might be more successful if a diagnosis is performed to clarify the need to change and suggest some courses of action. He should then develop a clear program or plan in order to move the organization to a new satisfactory state. This should involve a consideration of resistance to change as well as ways to deal with resistance such as good communication and involving those who are the targets of the change process. Third, he needs to ensure that any newly developed behaviours, attitudes, or structures are subjected to refreezing. This can be aided by evaluation and institutionalization. Finally, some of the things that might be changed at Dandy Toys as part of the change process include goals and strategies, technology, structure, processes, culture, and people. 2. Why wasn’t the innovation process more successful at Dandy Toys, and what can be done to improve it? Answer: The innovation process at Dandy Toys was unsuccessful for a number of reasons. First, there might have been a problem in terms of creative thinking and creativity. Creativity involves the production of novel but potentially useful ideas. The lack of creative ideas could be due to a lack of creativity on the part of management at Dandy Toys. Given that creativity-related skills can be improved by training, the company might want to invest in creativity training. Second, idea champions are required to recognize an innovative idea and guide it to implementation. Although some of the managers did suggest some ideas for new toys, the problem might have been a lack of idea champions. Therefore, perhaps the company needs to assign people to be champions as part of their regular job duties. Innovation also requires effective communication with the external environment and within the organization. The lack of communication from outside the organization and within might also be a problem. Along these lines, the company might assign some people the role of gatekeeper to span the boundary between the organization and the environment in order to import new information, translate it for local use, and disseminate it within the organization. In this way, relevant information might be useful for coming with new and innovative product ideas. Internal communication can be stimulated with in-house training, cross-functional transfers, and varied job assignments. Finally, resources and rewards are also important for successful innovation. Thus, the company needs to provide funds as an investment for innovation as well as providing managers with time to work on innovations. Reward systems can also be helpful, although freedom and autonomy have been found to be among the most important organizational factors leading to creativity. Rewards and incentives can also be used to stimulate managers to sponsor new ideas and then push them into the implementation stage and to turn them into real products. 3. Consider the relevance of organizational learning for change and innovation at Dandy Toys. What should the company do to improve learning and will this help to create change and improve innovation? Answer: Organizational learning is the process through which organizations acquire, develop, and transfer knowledge throughout the organization. There are two primary methods of organizational learning. First, organizations learn through knowledge acquisition. This involves the acquisition, distribution, and interpretation of knowledge that already exists but which is external to the organization. Second, organizations also learn through knowledge development. This involves the development of new knowledge that occurs in an organization primarily through dialogue and experience. Organizational learning is an important factor for change and innovation. Without learning, it is difficult for organizations to change or innovate. In order for innovation to occur at Dandy Toys, employees need to learn about the innovations by other organizations and in the market, and to then develop their own innovations. This requires knowledge acquisition and knowledge development. Therefore, organizational learning needs to be stimulated and facilitated perhaps first by training and then an incentive program that rewards and recognizes employees for knowledge acquisition and development. Cross-functional teams might also help as well as other changes that enable employees to interact and communicate. Learning and knowledge are important prerequisites for innovation. TEACHING NOTES FOR FIRST CANADIAN CLUB CASE STUDY 1. Was Sally Newton’s decision to centralize purchasing technically sound? That is, is this the kind of task that lends itself to centralization? Please explain your answers. Answer: By all accounts, Sally’s decision to centralize purchasing was technically sound. Before Sally joined the club, each centre was responsible for its own purchasing and most of them did it on an ad hoc basis and did not keep any inventory. Sally researched the idea of a centralized purchasing system and determined that it could save a considerable amount of money for the club as suppliers would reduce the cost of bulk purchases, something that was not possible under the current system. The new system that Sally designed would centralize all purchases in the head office. Given the need for purchases to be better controlled throughout the club not to mention the savings that could be obtained from bulk purchases, this was clearly the kind of task that lends itself to centralization. 2. Did Sally do a good job of introducing the change to the local fitness centre managers? Could she have used other tactics? Answer: Sally did a very poor job of introducing the change to the local fitness centre managers. After designing the new system on her own, she simply notified all of the centres with a memo that explained the reasons for the new purchasing system and the procedures for making the change. This was a sudden and unexpected change for the centres and one that they had not been told about until they received Sally’s memo. If Sally had also spent some time learning about the change process then she might have realized that change involves a sequence of organizational events or a psychological process that occurs over time. As described in the text, this sequence or process involves three basic stages – unfreezing, changing, and refreezing. Sally has skipped over the unfreezing stage and gone straight to the change stage. She should have started with the unfreezing stage which involves recognition that some current state of affairs is unsatisfactory. Along these lines, she should have let the centres know about the problems of the current purchasing system. As indicated in the text, employee surveys, customer surveys, and accounting data are often used to anticipate problems and to initiate change before crises are reached. Sally could have used accounting data to show the centres the cost of purchasing under the current system and how much they can save if they centralized their purchasing. Thus, Sally did have information that pertains to diagnosis but she has not shared this information with the centres. She should have used this information to show the centre managers that a problem exists; this would have initiated some unfreezing. She could have then focused on the problem and suggested some changes that could be implemented. She might have also discussed the problem with the centres and obtained diagnostic information through other means such as interviews. It might have also helped if a change agent had been brought in – an expert in the application of behavoural science knowledge to organizational diagnosis and change. It seems that having an independent, objective perspective to the diagnosis working with the centres and suggesting solutions might have been helpful. As for the refreezing stage, this of course has not happened and is the problem that Sally is now facing. Thus, the main problem in introducing the change is that there was no attempt at unfreezing and the centres do not understand the need for the new system. Sally should have introduced the change prior to its actual implementation so that the centres understand that the current purchasing system is not very effective and needs to be changed. As indicated in the text, the importance of careful diagnosis cannot be overemphasized as it clarifies the problem and suggests what should be changed and the appropriate strategy for implementing change without resistance. 3. Explain the motives for resistance. Why are the local centres against this change? Answer: Resistance to change occurs when people either overtly or covertly fail to support a change effort. As indicated in the case, the local centres have a number of problems with the new system and are highly resistant to it. For starters, the centre manager now has to fill in an order form and fax it to the head office by 5:00 on Monday. Then they have to wait a week to get the items they have ordered. Further, Sally has the authority to disapprove the order or reduce the amount requested. Although each centre would have $100 cash for urgent purchases, they no longer have the freedom to place orders as they need them and they now have to wait a week to obtain the items they order. The managers are refusing to fill in the order form and instead just phone in their orders whenever they want. In effect, an informal system that worked for the centres has been replaced by a more formal and bureaucratic system that has taken away the managers’ control to place orders for their centres as needed. With respect to the various common reasons for resistance described in the text, a number of them are likely relevant to the case including: Politics and self-interest-The managers have lost some control in their ability to order items on their own when they want. They must now go through head office and Sally can refuse the order or reduce it; Low individual tolerance for change-Some of the managers might be comfortable placing orders as they need them and the change in their routine makes them uncomfortable; Lack of trust-As Sally is relatively new to the club, the managers might not fully trust her motives for proposing the change; Different assessments of the situation-Given that the managers were never informed of the need for change, it is very possible that they do not feel that the situation warrants the change and that Sally does not really understand the current system and wrongly believes that a centralized purchasing system is required. The managers might also view the change as a way to monitor their spending and keep an eye on them, another reason why they might not trust Sally and her motives for the change; Strong emotions-The change might be inducing strong emotions in the managers making them upset and angry over a new system that takes away their freedom to place orders for their centres when they choose to and without the scrutiny of the head office. There are two major themes that underlie resistance to change: (1) change is unnecessary because there is only a small gap between the organization’s current identity and its ideal identity; (2) change is unobtainable (and threatening) because the gap between the current and ideal identities is too large. The problem Sally is facing is the first one – the managers do not feel that the change is necessary. 4. The new purchasing system is an innovation for First Canadian Club. In that context, explain why this innovation is not diffusing throughout the business. Answer: Innovation is the process of developing and implementing new ideas in an organization. Innovations can be classified as product (including service) innovations, process innovations, or managerial innovations. In the case of the centralized purchasing system, it represents a process innovation. Diffusion is the process by which innovations move through an organization. At First Canadian Club, the centralized purchasing system is obviously not diffusing throughout the club. Several factors can inhibit diffusion including: Lack of support and commitment from top management; significant differences between the technology or setting of the pilot project and those of other units in the organization; attempts to diffuse particular techniques rather than goals that could be tailored to other situations; management reward systems that concentrate on traditional performance measures and ignore success at implementing innovation; union resistance to extending the negotiated “exceptions” in the pilot project; fears that pilot projects begun in non-unionized locations could not be implemented in unionized portions of the firm; conflict between the pilot project and the bureaucratic structures in the rest of the firm. As for the First Canadian Club, although Sally has the support and approval of her boss, she does not have the support and commitment of the centre managers and this is a major reason for the lack of diffusion. A number of factors have been found to be critical determinants of the rate of diffusion including relative advantage (diffusion is more likely when the new idea is perceived as truly better than the one it replaces), compatibility (diffusion is easier when the innovation is compatible with the values, beliefs, needs, and current practices of potential new adopters), complexity (complex innovations that are fairly difficult to comprehend and use are less likely to diffuse), trialability (if an innovation can be given a limited trial run, its chances of diffusion will be improved), and observability (when the consequences of an innovation are more visible, diffusion will be more likely to occur). These determinants suggest that there is considerable advantage in thinking about how innovations are “packaged” and “sold” to increase their chances of widespread adoption. They also suggest the value of finding strong champions to sponsor the innovation at the new site. Along these lines, Sally might have been more successful if she had shown that a centralized purchasing system would be better than the current decentralized system (relative advantage); if she had first used the new system in a trial run then its chances of diffusion would have been greater (trialability); and if there were some visible consequences for the centres using the new system, perhaps showing them how much has been saved by placing their orders through head office rather than on their own (observability). 5. Could team building be helpful in dealing with the resistance to this innovation? If so, how and why? Answer: Team building attempts to increase the effectiveness of work teams by improving interpersonal processes, goal clarification, and role clarification. It can also be used to facilitate change. It can facilitate communication and coordination and it permits team members to anticipate problems. Team building might have been useful in dealing with the resistance to the new purchasing system because Sally could have met with the centre managers and helped them better understand the goals of the new purchasing system as well as their role in its implementation and in the change process. It would have also provided Sally a platform to communicate to the managers the need for change and how a new centralized purchasing system would be better than the current decentralized system. Because team building usually begins with a diagnostic session, it would provide Sally an opportunity to discuss the current purchasing system and how well it is functioning. In effect, it would allow her to do a better diagnosis and to have the managers involved. The result of this would be a better understanding among the managers of the strengths and weaknesses of the current system and a list of needed changes. At a subsequent session, Sally can involve the managers in a discussion of how to implement some of the needed changes identified during the diagnosis session. Subgroups of managers might be asked to come up with solutions and ideas for a new system. Sally might also hold confidential interviews with team members to anticipate any implementation problems and to deal with any resistance. This process would also change Sally’s role to more of a change agent who acts as a catalyst and resource person. This process would also help Sally build trust with the managers. Thus, team building can be helpful in dealing with the resistance to the new purchasing system and for facilitating the change. 6. Sally is especially concerned about the “Toronto alliance.” Could she use it to her advantage? Answer: The Toronto alliance seems to be a force for Sally to reckon with and failure to get them to use the new system could mean that others will also refuse to use it. Thus, Sally has much to gain if she can get them to use the system as the other centres will probably be more likely to follow and diffusion will be more likely. Sally should probably meet with them to discuss their concerns and to identify changes that might be more acceptable to them. In terms of greater diffusion, she needs their support and commitment and she should focus on some of the factors that are critical determinants of the rate of diffusion. For example, she should let them know why the new centralized system is better than the current decentralized system. She should also consider how she can implement a centralized system that will be compatible with their values, beliefs, needs, and current practices. She should then have them try the newly revamped system on a trial run during which the consequences of using the new system (savings associated with bulk orders) are made visible. In this respect, the centres should be able to see how much they are now saving on their orders as a result of using the new centralized system. As indicated in the text, Sally needs to focus on how the new system is “packaged” and “sold” to increase its chances of adoption. If she can get the Toronto alliance to use and accept the new system she will also be much more successful in getting the other centres to use it. Specific tactics for dealing with resistance to change are discussed below for question 6. However, one that seems particularly relevant for this question is for Sally to co-opt the managers of the Toronto alliance by providing them with a special role in the change process or perhaps offering incentives such as to return a percentage of the savings to them for using the new system. This would be especially helpful given the apparent power of the alliance and the fact that politics and self-interest might be behind their resistance. 7. What should Sally do now? Answer: Sally needs to go back to the start of the change process and focus on the unfreezing stage. She has not done a good job communicating the problem to the centres. She needs to do a better diagnosis by obtaining additional information from the centres either through interviews, questionnaires, or scrutiny of any records. She needs to involve the managers in the diagnostic process and then clarify the problem and discuss what needs to be changed and the appropriate strategy. She then needs to focus on how to avoid resistance to the change. Dealing with resistance to change can involve the use of a number of tactics such as co-optation, good communication, involving the targets of change in the change process, and using transformational leadership skills. Low tolerance for change is mainly an individual matter, and it can often be overcome with supportive, patient supervision. If politics and self-interest are at the root of resistance, it might be possible to co-opt the reluctant by giving them a special, desirable role in the change process or by negotiating special incentives for change. Resistance to change can often be reduced by involving the people who are the targets of change in the change process and ensuring good communication and this is exactly what Sally needs to do. She needs to do a better job communicating with the centre managers so they understand the need for change. Sally should involve the mangers in the diagnosis and get their input and involvement in the design of a new more centralized purchasing system. As indicated in the case, Sally herself developed the details of the centralized purchasing system without the input and involvement of the centre managers. She needs to get their input for some of the design details. Sally might also consider special incentives for the centres based on their use of the new system and the savings obtained as a result of using it. She might also consider co-opting the managers of the Toronto alliance by providing them with a special role in the change or perhaps offering to return a percentage of the savings to them as a result of using the new system. The key for Sally is to do a better job during the unfreezing and change stage of the change process by including the managers in the diagnosis and involving them in the change by employing tactics to deal with any resistance to change. This is a case where good communication and involving the targets of change in the change process is essential for success. Solution Manual for Organizational Behaviour: Understanding and Managing Life at Work Gary Johns, Alan M. Saks 9780133347500, 9780133951622