Yönetim Esasları - II Organizational Change and Stress Chapter 1 3- Organizational Change and Stress Defining Changing an Organization: This is the process of modifying existing organization to increase organizational effectiveness — that is, the extent to which an organization accomplishes its objectives. These modifications involve any organizational segment, but typically affect the lines of organizational authority, the levels of responsibility and the lines of communication. An organization must continually change in response to significant developments in the environment such as changing customer needs, technological breakthroughs, and new government regulations. Managers must encourage employees to continually search for areas in which beneficial changes can be made. Change versus Stability: subsidiary Hellriegel and Slocum showed the relative importance of change and stability to organizational survival. The model stresses that organizational survival and growth are most probable when both stability and adaptation (change) are high within the organization (number 3 on the model). When stability is low the probability of organizational survival and growth declines. Factors to Consider When Changing an Organization : The following factors should be considered whenever change is being contemplated. The change agent 1- Determining what should be changed 2- The kind of change to make 3- Individuals affected by the change 4- Evaluation of the change 5- The Change Agent: Who will be the change agent — the individual inside or outside the organization who tries to modify the existing 1- organizational situation. The change agent might be a self-designated manager within the organization or an outside consultant hired due to a special expertise in a particular area. This individual might be altering the culture of the whole organization or designing and implementing a new safety program or a new quality program. Determining What Should Be Changed: In general, managers should make only those changes that will increase organizational 2- effectiveness. Organizational effectiveness depends primarily on activities centering around three factors: - People factors: They are attitudes, leadership skills, communication skills and all other characteristics of the human resources within the organization. - Structural factors: They are organizational controls, such as policies and procedures. - Technological factors: They are any types of equipment or processes that assist organization members in the performance of their jobs. These factors are not independent determinants of organizational effectiveness. They should be matched with each other appropriately (See Figure 13.3). The Kind of Change to Make: Most changes can be categorized as one of three 3- kinds: - Technological Change: It emphasizes modifying the level of technology in the management system. It involves outside experts and highly technical language. - Structural Change: It aims at increasing organizational effectiveness by changing controls that influence organizational members during the performance of their jobs. Structural change modifies the existing organizational structure in order to increase effectiveness. These modifications are: * clarifying and defining jobs , * modifying organizational structure to fit the communication needs of the organization , * decentralizing the organization to reduce the cost of coordination Matrix organization provides a good illustration of structural change. According to C. J. Middleton, a matrix organization is a traditional organization that is modified primarily for the purpose of completing some kind of special project. Individuals from various functional departments are assigned to a project manager responsible for accomplishing some specific task. They are also called project organizations. Employees who are borrowed from different organizational segments have to complete the project. John Mee showed how a traditional organization can be changed into a matrix organization. Figure 13.4 shows a portion of a traditional organizational structure based primarily on product line. This structure makes it impossible for organization members to give adequate attention to three government projects of extreme importance. Figure 13.5 illustrates one way management could change this traditional structure into a matrix organization to facilitate completion of the three government projects. a manager would be appointed for each of the three projects and allocated personnel with appropriate skills to complete the project. The three project managers would have authority over the employees assigned to them and be responsible for the performance of those people. Three projects are labeled as Venus Project, Mars Project, and Saturn Project. The work flow related to each project would go from right to left on the chart. After the projects are completed, the organization chart would revert to its original design. Advantages of matrix design :* Better control of projects , * better customer relations , * shorter project development time , * lower project costs * Allowing managers to shift resources to special projects as needed Disadvantages of matrix design : * Creating more complex internal operations which give rise to conflict, encourage inconsistency in the application of policy, and result in a more difficult situation to manage - People Change: We discuss people change and examine grid organization development, one commonly used means of changing organization members. People change is a type of organizational change that emphasizes modifying certain aspects of organization members to increase organizational effectiveness. The focus of this change is on factors such as employee’s attitudes and leadership skills. The process of people change can be referred to as organization development (OD) that mainly emphasizes changing an organization by changing organization members and bases these changes on an overview of structure, technology, and all other organizational ingredients. Grid OD (Organization Development) is a commonly used organization development technique to change people in organizations. The managerial grid, a basic model describing various managerial styles is used as the foundation of for grid OD. According to managerial grid, various managerial styles can be described by means of two primary attitudes of the manager: concern for people and concern for production. Within this model, each attitude is placed on an axis, which is scaled 1 through 9 and is used to generate five managerial styles. Figure 13.6 shows five managerial styles and the factors that characterize each of these styles. 9.9 is the ideal managerial style. Managers have a high concern for both people and production. Managers using any other style have lesser degrees of concern for people or production, and are thought to reduce organizational success. 9.1 management style is concerned with efficiency in operations that is the outcome of arranging work conditions in such a way that human elements interfere to a minimum degree. 1.9 management style is related to the high attention to the needs of people with a low concern for production. 1.1 management style is concerned with minimum effort to get required work done and giving less concern for people. The purpose of grid OD is to change organization managers so they will use the 9.9 management style. The grid OD program has six main training phases that are used all managers. The first two stages focus on acquainting managers with the managerial grid concept and assisting them in determining which managerial style they use. The last four phases of the program encourage managers to adopt the 9.9 management style and showing them how to use this style within their specific job situation. The grid enhances profit and positively changes managerial behavior and values. Individuals Affected By the Change: To increase the chances of employee support, managers should be aware of the following 4- factors: The usual employee resistance to change: Behind this resistance to change by the organization members lies the fear of some personal loss, such as a reduction in personal prestige, a disturbance of established social and working relationships, and inability to carry out new job responsibilities. How this resistance can be reduced: Resistance can usually be lowered by the following guidelines: Avoid surprises: whenever possible individuals who will be affected by a change should be informed of the kind of change being considered and ? the probability that it will be adopted Promote real understanding: ensuring that organization members thoroughly understand a proposed change is a major step in reducing fear. ? Understanding may even generate enthusiastic support for the change if it focuses employees on individual gains. People should be given information about following change-related questions. Will I lose my job? Will my old skills become obsolete? Am I capable of producing effectively under the new system? Will my power and prestige decline? Will I be given more responsibility? Will I have to work longer hours? Will it force me to betray or desert my good friends? Set the stage for change: the management’s positive attitude to change should be displayed openly by the top and middle management as well ? as lower management. Management should also encourage change for increasing organizational effectiveness rather than for the sake of trying something new. Some portion of organizational rewards should be earmarked for those organization members who are most instrumental in implementing constructive change. Make tentative change: a trial period during which organization members live under a change is the best way of reducing feared personal loss. ? According to Judson, there are benefits of using the tentative approach such as (1) employees test their reactions to the new situation before committing themselves irrevocably to it, (2) employees acquire more facts on which to base their attitudes and behavior toward the change, (3) employees assess the change with objectivity, consequently they may modify their preconceptions, (4) employees are less likely to regard the change as a threat, (5) management evaluates the method of change and makes necessary modifications before its implementation. Evaluation of the Change: The purpose of change is both to gain insights into how the change itself might be modified to further 5- increase organizational effectiveness and determine whether the steps taken to make the change should be modified to increase organizational effectiveness. Evaluation of change involves watching for symptoms that indicate the further change is necessary. For example, if organization members continue to be oriented more to past than the future, if they recognize the obligations of rituals more readily than they do the challenges of current problems, or if they pay greater allegiance to departmental goals than the overall company objectives, the probability is high that the further change is necessary. Defining Stress : It is the bodily strain that an individual experiences as a result of coping with some environmental factor. According to Hans Selye , stress constitutes the factors affecting wear and tear on the body. This wear and tear in organizations is caused primarily by the body’s unconscious mobilization of energy when an individual is confronted with work demands. The Importance of Studying Stress : There are several sound reasons for studying stress: * Damaging psychological and physiological effects on employees’ health (e.g., heart diseases) and on their contributions to organizational effectiveness , * Causing employee absenteeism and turnover , * Affecting the safety of other workers and even the public , * Giving rise to significant costs to the organization such as money treating stress-related e mployee problems through medical programs and absorbing expensive legal fees when handling s tress-related lawsuits M anaging Stress in Organizations M anagers must do the following in order to appropriately manage stress in organizations. Understanding how stress influences worker performance: managers must understand the ? relationship between the amount of stress felt by a worker and the worker’s performance. Figure 13.7 demonstrates that extremely high and extremely low levels of stress tend to have negative effects on production. While increasing stress tends to bolster performance up to some point (Point A), when the level of stress increases beyond this point, performance will begin to deteriorate. In sum, too much or too little stress is generally disadvantageous for the organization, whereas a certain amount of stress among employees is advantageous for the organization because it increases production. Identifying where unhealthy stress exists in organizations: After areas of stress have been ? pinpointed, managers must then determine whether the stress is at an appropriate level or is too high or too low. Managers must know how to relieve undesirably high levels of stress. Managers often find it difficult to identify the people in the organization who are experiencing high levels of stress. Nevertheless, there are observable symptoms of high stress that managers can learn to recognize: (1) constant fatigue, (2) low energy, (3) moodiness, (4) increased aggression, (5) excessive use of alcohol, (6) temper outbursts, (7) compulsive eating, (8) high levels of anxiety, (9) chronic worrying.