Causes and Effects of Organisational Structure Change

Causes and Effects of Organisational Structure Change airliftThis dissertation de fibre help to generalize the reasons, why shapings turn and its view on the organisational organize. To comprehend the selected upshot variant numberary sources from the habitual domain has been moven. Information from these sources has been addressed under the heading literary models review. It gives an everyplaceview of the jaunts of trade in the first incision with special reference to role of the variety show doer in the variegate process, followed by a section how the memorial tabletal building is affected by recesss of permute. Next section addresses the contri aloneion of the organize towards flip-flop followed by employees attitude to the deviate process. This literature review helped to recognize already established concepts on the theme. And to rattlingize the commercial application of the vigilance theories ii companies have been selected, Atari and Oticon. O ne of them commuted its expression because of triggers in the remote purlieu and it was successful and still performing well but the sepa prize did not interpolate and it perished. At the end this dissertation helped to look at the ship commission of qualification the ever- changing process a subtle experience kinda of make it a knee-jerk incident as suggested by m each authors in the field.AIMS AND LEARNING OBJECTIVESThis dissertation is an attempt to examine the relevance of theoretical studies to real commercial topographic points. And it gives us an opportunity to demonstrate our understanding and application of the concepts and theories taught in the MSc programme. While under fand so forthing this task it as well as tested our transaction tracker to exhibit pargonntage look skills and to make a clear show of findings. And finally at the end it allows us to do a tiny evaluation of our future career path.METHODOLOGYAs a crack up of MSc Management course en gage this dissertation is to be handed based on secondary research. And it consists of published journals, books, annual reports of the companies, corporate and other websites. Most of the published journals are easy by the University of Glasgow library database be to varied disciplines from psychology to management reviews. There are sure limitations and challenges face up during its completion uniform it did not allow any primary research which subject matter restriction of lam only by secondary research. merely the avail susceptibility of kindle amount of research lay downs on the selected topic posed another challenge. It was challenging to sieve by it and extract the germane(predicate) information which would help to conclude the topic. Other challenges faced are the succession limit of only four months, and word limit of maximum xii thousand which is quite less to compress all the work from literature review, company history to analysis of severally part.I have called this principle, by which each slight variation, if useful, is preserved, by the term Natural Selection Charles DarwinCharles Darwin was the British naturalist who was renowned for his theories of evolution and natural selection (www.lucidcafe.com). As the speculation of natural selection suggests that in the biological world organisms develop certain characteristics that help them to survive in the surround. That is, the arduousest survive in certain environmental conditions and these characteristics are transferred from one generation to the next through genes (www.allaboutscience.org).Change is inescapable and environment is changing at a much faster rate than anticipated, influencing all levels of the society, from mortal to the corporate delimitatetings making the world a vivacious place to live.From makeupal perspective, trade in an organization nookie be triggered by advancement of technology, to the quest of the management to excel in the food market. A nd to empty annihilation one has to transform itself and adapt to its environment. To understand each construction of substitute from organizational point of view allow for be an massive task with amount of literature available. So the core focus will be to understand the triggers of change, role of a change agent in the changing process. The next position is to know why changes within the organization affect its expression. Subsequently the temper of change, that is how organizations change and finally the aspect of employees reception to the change.And for a go against understanding of all the aspects, first it is an attempt to understand the literature available on this topic and to comprehend their application in real life locating two companies have been chosen, Oticon and Atari as the cocktail dress studies.LITERATURE REVIEW5.0 INTRODUCTIONLiterature review is an effort to work the research work done by mingled authors ranging from 1958 to 2008. The main topic of this research is to understand what makes organizations change and its consequences on the grammatical construction.It includes an introduction on various forms of triggers of change comprising of a discussion on the role of a change agent, its drawing cardship style and indi shagt skills in the first section. The second section is about how change affects organizational social organisation. Next section consists of the disposition of change that is, the type of change that organizations go through. And the last section deals with employees re effect to change with a discussion on Hofstedes work on culture.There has been an all overwhelming amount of research work on different aspect of organizational change and it will be beyond the scope of this dissertation in terms of time and words to cover each topic. So it has been resolute to get an overview on a part of organizational change as mentioned above.SECTION 5.1TRIGGERS OF CHANGEThis section would cover the reasons that mig ht activate a change process in an organization. Some authors have classified trigger of change into assorts based on their relation to the organization, spot others have a more than generalised view.Triggers of change have been categorized into away and home(a) triggers. External triggers would include change in client needs, competition, innovative technology, radically opportunities, change in social and cultural values, change in job conditions, change in legislation and presidential term policies (Huczynski and Buchanan, 2000a). Scarcity of essential resources also results in change and stack lead to formulation of refreshed strategies, policies, rules and regulations, innovative ways of talk, encouraging squad work, developing upstart technology which can lead to the change of the entire coordinate of the organization (Chackerian and Mavima, 2000). Globalization of marketplace, heighten technologies, fierce competition, liberalization of economies, single Euro pean currency, electronic-trading, reduction of cost in production, information and transportation through economies of scale, supply chain integration (Daft, 2006), environmental awareness towards global warming, industrial waste disposal management, use of renewable and non-renewable raw materials, health awareness towards obesity, diabetes and so onteramaking con philiaers move towards natural nutrition from the synthetic ones, change in lifestyle over collect to summation in disposable income leading to the change in attitude towards work, leisure-time and society etc. Changing perspective towards work style from traditional to tele work, outsourcing, advances in intercourse allows organization to be multinationals without leaving their own countries (Paton and McCalman, 2000a).Internal triggers would include identification of a new senior administrator, new and better ways of religious service clients, infra social structure relocation, innovative product development ( Huczynski and Buchanan, 2000b). Presence of influential group within the organization can trigger change (Greenwood and Hinings, 1996) or change in top hierarchy may lead to change through accepting and implementing innovation (Boeker, 1997a Kraatz Moore, 2002). Change of managers within the hierarchy of the organization may lead to change (Boeker, 1997b), new responsibility can bring new motivation to do better and can lead to change through enhance learning, communication and introducing new technology etc (Fernandez and Pitts, 2007a). constitutions experience several types of triggers and so implement several types of changes. It has been reported that 50% of organizations adapts changes overdue to crisis (Beddowes and Wille, 2007a). organisational crisis can a feeler from external triggers such as competitors which can be a new firm or a rival, change in legislation, action of a stake h ancienter by selling or purchase a pregnant amount of shares, buy-out from an organisat ion etc (Eccles, 1994a). And 23% of organizations proactively change while anticipating threats and while doing so 44% percent of organizations change their organizational structure. (Beddowes and Wille, 2007b). harmonise to a study of 100 companies, majority showed re-structuring as successful, as thither are examples of companies running in losses for millions of dollars for a decade and matchly turning into a profit making company in two years with evidence of efficacious work through teams and employee empowerment. So triggers of change can be financial losses leading to drop in profits which can attract new lead and which may lead to changes in the structure (Haveman, Russo and Meyer, 2001a), increased competition leading to loss of market share, industry in recession, appointment of new chief executive smudger, proactive action (opportunities or threats foreseen), technological development and effective ways of ply utilisation (Beddowes and Wille, 2007c). agree to Champ y and Nohria (1996) at that place are three major triggers of change technology, government and globalization. Technology especially information technology has transformed business concern in many different ways. For example e-banking has opened new strategies for the banks of doing their business electronically and over the net, giving better access to customers with someonealised services. other example is the use of information technology in the field of issue of research journals. It has helped in speeding up the process of research and its publication. The government role as a trigger of change is by changing the policies which affects businesses. Deregulation, privatisation and free trade etc are opening up new ways for businesses and encouraging them to change their strategies. This type of change in government policies has been termed as regulatory punctuation which gives organizations new opportunities for expansion (Haveman, Russo and Meyer, 2001b). Another trigger of change is the discernible fact of globalization. It has helped in developing new concepts of this century like outsourcing and forced companies to work in virtual environment. Change can be a powerful energizer and creative force which can be good and would lead to development of innovative ways of getting a competitive advantage as well as bad with cauterize demands on employees and other measures like downsizing for cost cutting etc.As mentioned earlier organizations appoint change agent to deal with external triggers which leads to familiar changes in the organization.There is evidence that 16% of changes takes place due to appointment of new Chief Executive Officer (CEO) with characteristics like magnetized personality, with a clear idea of what and how changes are to be made, capable of taking a holistic view of the organization and who remembers in team work (Beddowes and Wille, 2007d). Managers do play a crucial role in proviso and in implementing organizational change (Fernandez and Pitts, 2007b). For effective implementation of change in that respect are three factors that need to be considered, the attitude, motivation and mind set of the change agent designing the change (Newman, 1973a).Previous research suggests that there exists a digression in the role of a change agent in the public sector and the private sector organizations. For example, there is significant amount of work directing towards the fact that public organizations although show more resistance to change but they often change according to Peters and Hogwood (1988) cited in Fernandez and Pitts (2007c). yet some authors argued that organizational change has little to do with managerial leadership. As suggested by Hannan and Freeman (1984a) organizations survive because they are square full for a particular environment marked by size, age and compoundness of the organization. simply an organization stands for collective work of individuals and groups to transact the object ives and goal through set of rules, which needs direction and sight which is the responsibility of the organizational leader (Burke, 2002).And in tack to influence individuals to work collectively towards a coarse goal is a complex task in itself on the part of the organizational leader.As stated influence is the essence of leadership (Yulk, 2002 P 141). The role of a change agent becomes effective when there is suitable leadership skill or influencing power to let others follow the vision and reach the goal. There is a list of twelve traits which consist of strong drive for responsibility , focus on completing the task , diligent and persistence in pursuit of goals, venturesomeness and originality in problem lick drive to exercise initiative in social settings, self-confidence , grit of personal identity, willingness to accept consequences of decisions and actions, readiness to absorb interpersonal stress, willingness to tolerate foiling and delays, ability to influence the behaviour of others, capacity to structure social systems to the social occasion in hand according to Stogdill (1950, 1954) cited in Huczynski and Buchanan (2007c). While studying American executives, 15 indispensible leadership traits were identified, which are judgement, initiative, integrity, foresight, energy, drive, human relations skill, decisiveness, dependability, emotional stability, fairness, ambition, dedication, objectivity and co- performance according to Stewart (1963) and there are as many as 80 leadership traits, identified in various studies as cited in Huczynski and Buchanan (2007d).As leadership is all about influential skills or power skills on the part of the change agent so that the vision of the change is followed by others (followers). The power to influence others measures the extent of leadership value (Huczynski and Buchanan, 2007e). At individual level power can be seen as a motivational tool when an individual tries to laterality and influence events and when this is manifested in terms of observable action by others then power is seen as a behavioral aspect. Power in behavioural terms has been divided into eight categories reward, coercive, referent, legitimize, honest power (French and Raven, 1958a), informative, affiliation and group power (Benfari, et.al, 1986a).Reward power describes the ability to influence others in such a manner that followers believe the leader have the capacity to offer valuable reward or incentive in return of the obedience shown to the leaders demand. Coercive nature of power shows that the leader has the capacity to punish in the form of penalties and sanctions in return of noncompliance to the leaders demand. Referent power describes the ability of the leader to go through by his/her enigmatic personality. Power is said to be of legitimate nature based on the authoritative position of the leader which is followed by the others as a compulsion. And the expert power which is described by its im age that leader has expert knowledge and experience to make other pack follow the instructions as it is regarded as of superior nature (French and Raven, 1958b). enlightening power is similar to expert power and describes the leader to have undisclosed information crucial to the organization which makes the leader superior and thusly followed by others. Affiliation power shows the leader to have strong relations with influential figures in the organization and society and thus followed on this basis. And the last syndicate is the group power which is associated with the leaders ability to lead a team or group with sharing of power and responsibilities. All the eight categories are perceived either as positive (P+), beneficial or minus (P-) as exploitation or mixed response (P+ and P-) by the receiving company according to its characteristics. For example reward and referent power are original as P+. Coercion and information form of power as P-(Benfari, et.al, 1986b). But all a re situational that is they have different influential power when used under different situation and the most effective leadership style that has emerged with time is the group power with sharing of power amid the leader and others, as it can give the feeling of responsibility to take decision which can be rewarding (Huczynski and Buchanan, 2007f).SummarySo in brief triggers are mainly external that pressurises organizations to undertake internal changes. And it is a crucial responsibility of the change leader to assess the external situation and act accordingly so that the internal changes are done in a subtle way. When an organization becomes successful in making the relevant changes and performs well, it will pose a threat to other organizations and thus trigger another set of changes taking the course of a chain reaction.But why does an organization has to change its structure? This can be still in the next section of the literature review.Section 3. 2 take up of change on th e organizational structureAs mentioned earlier 44% percent of organizations change their organizational structure (Beddowes and Wille, 2007e) while adopting internal changes.The structure of an organization can be defined simply as the sum total of the ways in which it divides its labour into distinct tasks and then achieves coordination among them.(Mintzberg, 1979a 2) agree to Newman (1973b xiii) Organization is a system for enabling peck to reach or attempt to reach certain objectives and it involves the use of resources to carry out activities towards those objectives. The raw material features of an organization involve presence of objective(s), people and the environment in which it operates. Objective(s) would be the reason behind its existence, people working in an organization communicate, orchestrate with occasional conflicts carry out activities in an organised way which is in par with the objective(s) of the overall organization. And these objective(s) are the opportun ities and constraints provided by the environment, within which an organization exists. In order to survive, an organization essential be able to understand the environment i.e. its complex surroundings and establish a relation with the trading market, products and services, suppliers, finances, customer preferences, competitors, employees, government policies, social settings, culture etc which would eventually help it to formulate the objective(s). Organization tends to establish family consanguinity between people, units, roles etc with a degree of consistency bosom all the relationships which is the underlying source of structure for an organization. The three basic features of organization that demands the need of a structure are first is the organizations desired bodily function in order to fulfil its objective(s) through effective use of available resources, second, the way of carrying out its activities i.e. the process and the third is the behaviour of the people wor king for the organization while carrying out the first two features. The function of a structure is to give stability, consistency, by holding things together giving it a form and reducing randomness while outlining its operations. The design of the structure must facilitate the fulfilment of the organizational objective(s). The conventional forms of organization design were the practicable form, the executive or administrative form and line or stave form. The functional form of the structure reflects the kind of function performed by the people. As required, new positions are developed along with new divisions or departments. But as complexity of work increases and it requires more coordination among divisions this structure becomes inadequate other this form works well for independent work in each divisions.TOP MANAGEMENT course of instruction ADIVISION BDIVISION CDIVISION D come The Functional Form (Newman, 1972c81)The administrative form separates the organizations actual work and the internal management of the organization. As it is unvoiced to separate the executive side of the organization which is more result orientated and the administrative side of the organization which retards the resources . Communication plays an important role in coordinating between the two otherwise it can give rise to conflicts. The line or supply form shows relationship between the operation and the people within the organization that is, work demand and it is an extension of the executive form. One problem faced in this form is the control of managers over the subordinates and another is the orientation of the structure to the kind of work the organization is active with. For example line structure can be marketing orientated, sales orientated and so on. But as demand from the environment increases there is a need for multi-functional structure. The inadequacies of the conventional forms led to the formation of the new structure called the matrix form.TOP MANAGEMENT FACILITIES STRUCTUREOUTPUT STRUCTURESource Matrix Form (Newman, 1972d85)Matrix structure is task based or project based that is, based on work demand. It is flexible as it changes according to the project or task at hand. And this type became prevalent among organizations dealing with large projects like civil engineering, research and development organizations etc. This structure deals with two basic objectives, first is the outfit of the organization and second is the ability to produce the return. Both are interconnected and interdependent on each other with the top management being responsible for its control and ensuring efficient utilization of resources. As it is project specific, unutilised resources needs to be reallocated or used for training etc.According to Mintzberg (1979b) there are cinque basic constituents of a structure, mutual adjustment, direct supervision, standardization of work process, work outputs and worker skills and these hold the organization togeth er. Mutual adjustment is achieved through cozy communication while coordinating work. Direct supervision is the process of scrutinizing and instructing others work by an individual which again ensures mutual adjustment. calibration of work process, output and worker skills can be achieved when they are precisely specified. In complex organizational environment these five factors work in a loop.StandardizationWork ProcessOfOutputMutual alterationMutual AdjustmentDirect SupervisionWorker SkillsSource The coordination mechanism among the five basic factors of a structure. (Mintzberg, 1979c P 7)Organizational change reflects re-organization in the structure of the organization which includes the patterns of roles, policies and surgerys which affects the relationship between them and thus affects the structure. The change can be due to new customer preferences, new work requirements, new strategies etc. In order to have an effective process of change, reviewing of the consequences of change is necessary and making relevant adjustments to the structure and policies from the results. The second factor is the change itself and for effective change it is necessary to have adequate information from the past and present as change begins with the analysis of these situations. As change means weakening of old or existing relationships and strengthening new ones and a critical situation is reached when old ties are weakened and new ties are not strong enough. Problems are faced when relationships between various factors in an organisation which were congenial in the old situation becomes incompatible in the new situation. So it is important to develop all the factors in such a way that will reinforce rather than inhibiting peoples work. For an organization to be effective, its structure, policies etc should enhance peoples output and attitude towards change. The third factor is the development of the relationship between the people and the new settings. This can be don e by effective communication, consultation, discussion, affaire among the employees and involving people in the change process (Newman, 1973e).According to Greiner (1972) as cited in Meredith and Mantel (2003) an organization tends to develop a structure whilst growing and adding resources and establishing relationship between them and at the core is the specialization factor of the human element of the organization. The structure remains stable till it facilitates the completion of the task but if there is change in the nature of the task due to any of the above mentioned triggers of change, and the present structure hinders the completion of the new task, it will register a need for change and which affects the structure of the organization.According to Chandler (1962a) organizational structure reflects the health of an organization. Structure is defined as the design of the organization through which the enterprise is administered (p 14). The design has two aspects, first is th e line of control and communication between various units and people working in them and second aspect is the flow of information within these lines. And these two aspects are essential to fulfil the organizational goal. Structure follows the strategy of the organization, for example when an organization decides to expand and increase the number of offices it requires more administrative infrastructure and people to handle it and thus changes the structure. Again if an organization has overseas expansion plans it will have departments and main office to administer its individual units. Diversification to new type of function or vertical integration will attract a multi-departmental structure with a central main office. Diversification into new product line will be supported by multi-divisional structure with a general office to control the divisions. This multidivisional structure would attract de centralization of authority from the centralised control in departmental structure.Th e coordination and control of business units takes place through centralisation and decentralisation form of decision making. Centralization means power to control and coordinate resides in one person while decentralisation means division of power into many individuals. Research shows cognitive limitation in centralized decision making as it involves only one person and organizations face many complex situations. And a rational way of making decisions in such situations is through decentralisation. Other benefits of decentralisation are that it allows better understanding of the environment and it facilitates innovation and creativity as it involves many brains (Mintzberg, 1979d).According to Drucker (1988) as soon as a company changes its strategy from idea work to electronic mode it starts impact the decision process, management structure, over all way of working style of the organization eventually affecting the organizational structure. And this includes change from command a nd control mode of working in departments and divisions into information based organization of knowledge specialists.According to burn down and prowler (1961) as cited in Mintzberg (1979e), that if the environment is volatile the organizations have to have a flexible and an organic structure in order to adapt itself to changing environment but if the environment is stable organizations can have bureaucratic structures performing routine and standardised tasks.Organizations have adopted flat, flexible structure which emphasizes on empowerment and team work culture in order to cope up with the changing nature of the environment. Successful organizations show employment of employees in decision making and also as a part of the change the organization needs (Piderit, 2000a). As stated by Burns and Stalker (1961) cited in Meadows (1980a) organic structure has the following characteristics, team work to complete a common task, no fixed rules or methods to accomplish the task, periodic re-examine of the task so that it can be readjusted according to demands of the surroundings through communication, consultative nature of communication instead of imperious nature, closely knitted network of communication, devotion towards the organization and the task and grip for intellectual and technological soundness.SummaryOrganizational structure is the reflection of its internal relationship between all its resources (people and work) which are constantly influenced by the external factors. And thus when an organization makes internal changes in order to cope up with the external triggers eventually changes its structure. Organizations need to have a flexible structure (organic) so that it can adapt to the environment which is volatile in nature due to external triggers. And as suggested growth without structural adjustment can lead to economic failure (Chandler, 1962b p 16).The next question that arises is that does the structure of the organization affects or facilitat es changes within an organization? This can be understood in the next section of the literature review.Section 3.3Nature of changeWhile organizations adapt to environment, structure plays an important role, if the inherent nature of the structure is flexible then changes are easily done otherwise it poses a threat to both the process and content of change.Organizational change is the difference in organizational features measured over a period of time. Organizational features can range from functions performed by individuals or organizational subunits or relationship among other organizations and the environment (Van de Ven, 2004a). Organizational theories are either focused on the content of change or process of change. Barnett and Carroll (1995a) have suggested a government note between process and content aspect of the changing organizations. Content refers to the element of the organization that changes and process refers to the actual course of action or procedure that is adop ted to make those changes. The outcomes of both content and process changes have different effects on the organization although there is a clear fundamental interaction between them.Types of changes due to various triggers can be at various levels. For example, at organisational level, change may occur in the culture and structure of the organization with new work practices, emphasising on training and team work, introducing new reward systems and innovative ways of communication etc. Another heavy(a) type of changing is through cost cutting measures like staff reduction or downsizing. Market led issues may lead to customer orientated focus with new products with better quality, adapting innovative technology (Beddowes and Wille, 2007f). A similar list suggested by Van De Ven (2004b) consists of structural change featuring decentralization or centralization functional change in strategies to bring new and better products and services compositional change featuring downsizing and re cruitment, resource apportionment change in relationship between organization units through effective communication, exchange of resources across units change in boundary through business expansion or contraction using mergers, acquisition, joint ventures etc environmental changes due to resource scarcity etc, and lastly change in performance showing profitability, job satisfaction etc. These comprises of the content aspect of the organization change.