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Chapter 8: OD Interventions: Strategy and Structure
Chapter 8: OD Interventions: Strategy and Structure
Techno-structural intervention
Organization structure:
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3. Matrix Structure components and products, and manage the
A combination of functional and self- supply chain.
contained unit. The organization develops the best solution for
It superimposes a lateral structure that the customer by offering a customized bundle
focuses on product or project coordination of products, services, support, and education.
on a vertical functional structure. Their core structures focus attention and
Now widely used in manufacturing, resources on customers with market-facing
service, non-profit, governmental, and units organized around large individual
professional organizations. customers or customer segment teams that
attempt to maximize customer profit and loss.
6. Network Structure
Manages the diverse, complex and dynamic
relationship among multiple organizations or
units.
Organizations that use network structures
have been called shamrock organizations
and virtual, modular, or cellular corporations.
4 basic types of networks:
i. Internal market network – exists when
a single organization establishes each
unit as an independent profit centre that
is allowed to trade in services and
resources with each other as well as
with the external market.
ii. Vertical market network – composed
4. The Process Structure of multiple organizations linked to a
A structure consist of multidisciplinary teams
focal organization that coordinates the
around CORE/MAJOR processes such as
movement of resources from raw
product development, customer support etc.
materials to end consumer.
“Process Owners” are identified to manage the
iii. Intermarket network – represents
process. alliances among a variety of
Emphasizes on lateral relationships.
organizations in different markets and is
There are several hierarchical levels, and the
exemplified by the Japanese “keiretsu”
senior executive is relatively small, typically
the Korean “chaebol”, and the Mexican
consisting of CEO, COO, and the heads of a
“grupos”.
few key support services such as strategic iv. Opportunity network – most advanced
planning, human resources, and finance. form of network structure. It is a
temporary combination of organizations
brought together to pursue a single
purpose. Once accomplished, the
network disbands.
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Refers to interventions that are aimed at reducing Re-engineering will permit entirely new ways of
the size of the organization. producing and delivering product/services – how to
Reducing the size of the organization can be done produce products and services.
through decreasing the number of employees such Reengineering has been applied to work processes
as layoff, early retirement, VSS, reducing the in manufacturing and service industries, in
number of organizational unit and managerial level. business firms, not-for-profits, and government
agencies; and in diverse global settings.
Application stages:
Implementation Steps:
i. Clarify the organisation’s strategy (e.g. Major
restructuring of MAS) i. Prepare the organization – assess the
ii. Assess downsizing options and make relevant competitive environment, strategy and
choices (Who, how) objectives.
iii. Implement the changes (plan execution) ii. Fundamentally rethink the way work gets done –
iv. Address the needs of survivors and those who understand the business process, work process,
leave (e.g. reskilling, redeployment) value chain and plan for change to the new
v. Follow through with growth plans (formative
business process.
evaluation e.g. quarterly) iii. Restructure the organisation around the new
Downsizing Tactics (Cameron, Freeman and Mishra, business processes – changing the
1991) Figure 8.6 organization’s structure to support the new
business process.
WORK DESIGN
I. Engineering approach
Focuses on efficiency and simplification and
results in traditional jobs (usually repetitive
work done by individual) and work groups
Results of Downsizing redesigns (member perform jobs relatively
routine jobs and interrelated task).
i. Negative consequences e.g. employee Most prevalent approach to design a job –
dissatisfaction, lower productivity. based on engineering concepts and methods.
ii. Positive consequences e.g. reduce cost etc. It proposes that the most efficient work designs
The way (how) in which downsizing is conducted can be determined by:
i. Clearly specifying the tasks to be
may explain these divergent outcomes.
performed (task identity)
Following a well-planned application of the process
ii. Work method to be used (how to perform
seems to improve outcomes. the job)
TYPE 3: REENGINEERING iii. Workflow among individuals (task
significant).
A radical redesign of core business processes in II. Motivational approach
order to achieve dramatic improvements in Uses motivational theories
performance. Job enrichment – Focuses on enriching the
It transforms how organizations traditionally work experience by give more opportunity for
produce and deliver goods services. autonomy, responsibility and performance
Re-engineering frequently takes advantage of new feedback.
information technology e.g. teleconferencing, The motivational method provides people with
expert system, shared database and wireless opportunities for autonomy, responsibilities,
communication. closure (that is doing a complete job), and
performance feedback.
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Example: For example, let's say Molly works as III. The Sociotechnical Systems Approach
a receptionist at a beauty salon. Because Molly (Self-managed team)
is also a marketing arm of the salon, the Seeks to optimise both the social and
manager might assign Molly to do research technical aspects of work systems
and develop new promotional campaigns each Require employee involvement and innovative
month to increase the amount of clients that work design.
come into the salon. Molly's manager would Work design based on STS derived from
need to also give Molly the authority to make action research.
decisions relating to promotional campaigns. Also refers to self-directed, self-regulating,
high performance work systems – member
Job Enrichment: Obstacles and Results performing interrelated tasks.
Not all people react in similar ways to job STS Conceptual Background
enrichment interventions.
Individual differences can impact negatively: STS theory is based on two fundamental
i. a worker’s knowledge and skill levels premises: sociotechnical system and
ii. growth-need environmental relationship.
Four system level barriers have also been identified: (1) Sociotechnical system:
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When technical uncertainty is high and people
must process more information and make
decisions, work should be designed for high-
levels of employee self-control, as might be
found in professional work and hospital
emergency room.
1. Social needs
The desire for significant social
relationships
Determines whether work should be
STS Application Stages: designed for individual jobs or work
1. Sanction the design effort – support (top groups.
People with low needs for social
management, union, expert) to diagnose the
relationships are more likely to be
work system
2. Diagnose the work system satisfied working on individualized jobs
3. Generate appropriate designs than in interacting groups.
4. Specify support systems (e.g. for self-managed People with high social needs are more
team require team performance evaluation likely to be attracted to group forms of
instead of individual performance appraisal). work than to individualized forms.
5. Implement and evaluate the work design 2. Growth needs
6. Continually change and improve Determines whether work designs should
be routine and repetitive or complex and
Effective work design: Depends of technical and
challenging.
personal factors People with low growth needs are not
(1) Technical Factor attracted to jobs offering complexity and
challenge but more satisfied performing
1. Technical interdependence routine forms of work that do not require
Extent to which cooperation among workers is high levels of decision making.
required to produce a product or service People with high growth needs are
Determines whether work should be designed satisfied with work offering are satisfied
for individual jobs or for work groups. with works offering high levels of
When interdependence is low, there is little discretion, skill variety, and meaningful
need for worker coordination. feedback.
When interdependence is high, employees
must coordinate their task activities (e.g., oil Employee Involvement in techno-structural
refining, assembly lines, and major surgery). intervention
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- Can include data about results, business I. They can improve communication and
plans, competitive conditions, and etc. coordination among employees and
iii. Employees have requisite skills and knowledge organizational departments, and help integrate
to make decision the different jobs or departments that
- Employees should have requisite skills contribute to an overall task.
and knowledge to make good decisions. II. EI interventions can improve employee
- Provide training if employees lack of skills motivation, particularly when they satisfy
and knowledge. important personal needs.
iv. Linking reward to the contribution and - Motivation is translated into improved
performance performance when people have the necessary
- Rewards can encourage people to get
skills and knowledge to perform well and when
involved in the organization.
the technology and work situation allow people
- Internal rewards: feelings of self-worth
to affect productivity.
and accomplishment.
III. EI practices can improve the capabilities of
- External rewards: pay and promotions
employees, thus enabling them to perform
How Employee Involvement Affects Productivity better.
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