LCC Navigating Change Through Formal Structures and Systems Discussion

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I want each of you to complete toolkit exercises 5.1, 5.2, and 5.3 in your textbook.

For Toolkit Exercise 5.1 you will need to read Case Study 2 on page 417 of your textbook. You should also review the following video:

Dr. John Kotter: Accelerate! The Evolution of the 21st Century Organization

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Chapter 5 – Navigating Change Through Formal Structures and Systems Introduction The material presented in this chapter seeks to help you understand how organizations are formally structured and how those structures might affect OC. The chapter aims to help “describe the roles that formal systems and structures play in advancing change. It also provides guidance in identifying the gap between the existing structures and systems, and what is needed to bring about alignment after the change” (Cawsey, et al., 2016, pp. 144-145). OC leaders have to understand how our formalized structures and systems have conditioned the organization and how such conditioning will affect needed and often deep-level change. After all, formal structures direct organizations through orders, establishing efficiency and effectiveness procedures and assessments, and determining accountability. Formal structures and systems are featured in this chapter so we must address how they affect OC and strategies that could be employed to direct them immediately and in the long-term toward OC objectives. It is essential to introduce some important vocabulary: Formal Organizational Structure and Formal Organizational Systems. These terms refer to “how the organization formally organizes itself to accomplish its mission. Formal Organizational structure is how the organization’s tasks are formally divided, grouped, and coordinated. The structure would include the organizational hierarchy, the structure of any manufacturing operation, and any formal procedures such as performance appraisal systems, as well as other structures. Think of “structure” as the “architecture of a building”. It can powerfully facilitate or impede change. For example, the “structure” would “support the strategic direction of the firm by enhancing order, efficiency, effectiveness, and accountability” (Cawsey, et al., 2016, p. 144). One might use the word “power” (i.e., the ability to realize one’s will over the resistance of others) to understand this process but recognize that the “power” has been built into the way the organization has and continuous to work. Formal Organizational systems are behavioral and “include the planned routines and processes such as strategic planning, accounting and control systems, performance management, pay and reward systems, and the information system” (Cawsey et al., 2016, p. 144). Once the change in structure is recognized, OC leaders must change the system “to promote and enact change” (Cawsey et al., 2016, p. 146). Organizational structure involves the following: Statuses (recognized social positions assigned to you) Roles (expected behaviors tied to statuses) Groups (people who share a common sense of purpose) These essential elements of social structure regularize human behavior within and across larger-scale aggregations of people. Each is essential to OC efforts affecting formal organizational structure and systems and must be recognized as such. Chapter 5 Notes - 1 Looking at the Change Path Model by Cawsey, Deszca, and Ingols (introduced first in Chapter 2, see page 55), we are currently at the mobilization stage where we are trying to “make sense of the desired change through formal systems and structures, and leverage those systems to reach the change vision” (Cawsey et al., 2016, p. 145). Making Sense of Formal Structures and Systems As mentioned above social structures/formal structures involve statuses, roles and groups. These are created systematically within the formal organization to effectively produce the desired outcome. Think about these concepts as we explore the following elements considered essential in understanding and changing organizational structures and systems. 1. differentiation – formal organizations are dependent upon the division of labor. Roles are diffused vertically and horizontally around the organizations and, relative to their statuses, people are defined to fulfill those roles. As organizations grow, differentiation increases and can become so complex that groups are created and recognized as essential to the organization’s operations. Unfortunately, with differentiation comes isolation. Organizational silos often develop where formal structures become complex (i.e., one group does not know or cares what the other group is doing). If you want to make sense of changing the formal structures and systems of an organization, you had better understand the effects of differentiation (i.e., structural and system complexity). 2. integration – this refers to the “coordination of the various tasks or jobs into a department or group” (Cawsey et al., 2016, p. 146). The larger the organization the more complex integration will appear. The more complex the integration, the more complex unraveling that integration to effectively broadcast the OC message. 3. chain of command – Power (i.e., the ability to realize one’s will over the resistance of others) is reflected in the formal structure and the chain of command which defines one group relative to another and one’s status relative to another’s. Power does not exclusively define one’s status in the greater hierarchy (roles do that) but power defines decision-making hierarchy—who has the power to make this or that decision and who/what has to live with the consequences of that decision. Reflecting on the need for OC, the chain of command will be utilized or perhaps even altered given the direction of OC. How might an OC initiator/implementer explain to historically empowered people that their level of power in the chain of command might be changed? 4. span of control – this concept refers to the number of subordinates under the manager’s direct control. For example, a manager with five direct reports has a span of control of five. Too many or too few direct reports is a good way to view how efficient an organization is as long as it looked at in the context of the company’s organizational structure. Span of control affects OC in the sense that too much or too little control on the part of the manager or leader will directly affect the effectiveness of communicating the change vision and implementation of it and the larger organizational vision. Chapter 5 Notes - 2 Too many statuses and roles may paralyze a change leader. Where would you begin and how well do you know the people occupying these statuses and their roles? As Cawsey el al. (2006, p. 147) notes: “An organization that gives managers to little span of control runs the risk of creating a costly and topheavy administrative structure and encouraging its managers to micromanage too few employees. On the other hand, managers who have too many employees reporting to them run the risk of inadequate supervision, feedback, and employee development”. 5. centralization versus decentralization – This is a relatively easy concept to grasp in that centralized organizations have decision-making authority at the top and decentralized organizations have decisionmaking authority at the lower-levels. If the organization you are leading is centralized versus decentralized, how will that affect the way you communicate the needed change? 6. formal versus informal – I think this point refers most to whether the codification of how things should be done is actually followed. Think of this in the sense of creating statuses, roles, groups, and defined patterns of action but acknowledging that you may or may not follow that structure or plan. Chapter 5 Notes - 3 If you are leading OC, is the formal structure even meaningful within your organization? (let’s discuss Toolkit Exercise 5.2). Impact of Uncertainty and Complexity on Formal Structures and Systems The question being addressed here is how the structure of your organization might respond to the uncertainty of external/internal forces of change? Two concepts are proposed to assist OC leaders in evaluating the type of formal structures surrounding them. These concepts are designed to help OC leaders evaluate their organization and decide the best strategy to effectively impact OC in light of statuses, roles, and groups. As illustrated below, mechanistic organizations “rely on formal hierarchies with centralized decision making and a clear division of labor. Rules and procedures are clearly defined, and employees are expected to follow them. Work is specialized and routine”. Organic organizations are more flexible. “They have fewer rules and procedures, and there is less reliance on the hierarchy of the authority for centralized decision making. The structure is flexible and not as well defined. Jobs are less specialized. Communication is more informal and lateral communications more accepted” (Cawsey et al., 2016, p. 176). How does this dichotomy affect initiation of OC initiatives? Which side of the dichotomy would you prefer to lead from? Is it really a dichotomy or a continuum? Does this just complicate matters? Chapter 5 Notes - 4 Formal Structures and Systems From an Information Perspective This discussion is all about how organization are structured to formally manage information. Ideally, an organization’s formal structure should advance sharing of information with the right people at the right time while retaining a degree of control over what is shared and with whom it is shared. Information, simply put, helps people do what needs to be done. Information systems within organizations (and I am not referring solely to information technology) should aim to “develop needed information and get it to the individiuals who most need it in a timely manner for decision making” (Cawsey et al., 2016, p. 151). For OC initiators and implementers, the modern world of organizations, impacted as it is by advanced information/communication technology, very much affects how change occurs. Jay Galbraith (1973) proposed a theory of information processing in organizations which identified three important concepts as being central to organizational effectiveness: information processing needs information processing capability/capacity and the fit between the two. Galbraith views organizations as information processing mechanisms and where there is fit between information processing needs and information processing capability, the organization should operate optimally. Organizations need quality information to cope with environmental uncertainty and improve their decision-making. Environmental uncertainty stems from the complexity of the environment and dynamism, or the frequency of changes to various environmental variables. During periods of OC one can expect uncertainty to increase and therefore information processing needs will increase. During periods of uncertainty, the “organization must either increase its capacity to handle that information or restructure itself to reduce the need for information handling” (Cawsey et al., 2016, p. 149). Typically, organizations have three strategies to cope with uncertainty and increased information needs: 1) develop buffers to reduce the effect of uncertainty. This might involve hiring more people or perhaps reduce the need for information in the first place or creating “self-contained” tasks for people or units to complete such as having a unit work on one and only project or work on only one element related to the OC. In short, reducing coordination should reduce information processing requirements and uncertainty. 2) Implement structural mechanisms and information processing capability to enhance the information flow and thereby reduce uncertainty. This might involve making changes to the vertical hierarchy (e.g., if level 2 of the organization knows the issue better than level 1 of the organization, then give level 2 the autonomy and independence to act or perhaps use technology to implement newer and more effective technology to share data used in decision-making). Chapter 5 Notes - 5 3) Increase horizontal communication capacity to improve information processing ability. This might involve “e-mail systems, intranets, electronic bulletin boards, texting, and various forms of social media” (Cawsey et al., 2016, p. 151). Organizations might also adjust lateral relationships where employees at the same hierarchical level from various departments exchange information/ideas to better achieve organizational objectives. Lateral relations that improve communication flow by blurring formal structural boundaries could involve: Direct contact – Information processing capacity could be enhanced if, for example one unit gets to speak directly with another without having to go through a third party (e.g., a department or cost center gets to purchase things directly from a supplier with having to get approval from the purchasing department) Liaison role – To reduce the hierarchy's coordination effort, when frequent communication exists between two interdependent departments, a special liaison officer can be assigned to foster communication. Multidepartment task forces – When more than two departments are involved in decision-making, a temporary task force of representatives from each of the interdependent departments can be created. Decisions made through group processes tend to be of higher quality than when made by individuals. Chapter 5 Notes - 6 Formal Teams – Transforming a temporary task force into a permanent cross-departmental team. Formal Integrating roles – The issue of finding an accepted leader for a cross-departmental team is often difficult since different departments prefer their own candidate. This leadership issue can be solved by introducing new integration roles such as project managers, program managers, or product managers. Managerial linking role – Similar to the above point but the leader has well-defined formal decisionmaking power and authority. Dual authority relationships – Some roles in an organization may require reporting to two superiors, a line manager and an 'integration' officer. Lateral relationships benefit the organization by permitting more decisions, different types of decisions and better and faster decision making. Lateral decisions also free top management to focus on nonoperational decisions. However, decentralized decisions may be sub-optimal since middle management lacks top management's overview. In addition, costs increase as the scope of the lateral relationships increase: the more people involved, the more time is spent on communication, problem solving and conflict resolution. Think again about the Mumbai attacks in 2008. How was information processed between India and other countries? How was information shared within India across the different levels of local and national security? How did the various elements of India’s government work together (or not together) to respond to the attacks? Aligning Systems and Structures With the Environment Alignment of systems and structures can look like this: It means being successful by having organizational leadership that connects the organization’s purpose (what we do and why we do it) to its strategy (what we do to achieve our purpose), organizational capability (what we need to be good at), resource architecture (what makes us good), and, finally, management systems (what delivers the winning performance we need). Alignment also involves knowing when and where a mechanistic versus organic structure is needed. Chapter 5 Notes - 7 Using Structures and Systems to Influence the Approval and Implementation of Change “Formal structures and systems must be leveraged to advance change” (Cawsey et al., 2016, p. 158). The extent of the change (i.e., how much of the current organizational structure and/or processes will be affected by the change?), the significance of the change (i.e., how will the change alter the image of the organization?), the level of risk involved with the change (i.e., what could happen if the change initiative fails?), the cost associated with the change (i.e., what level of resources are needed to make this change happen?), and the timing associated with the change (i.e., how long will this take? )are all relevant issues and questions that must be addressed. The extent to which use of the formal organizational structure is necessary hinges on answering these questions in the face of OC. If the answers to the above questions come back and are all “high level”, a formal approval process (“the traditional approach in which a person or persons develop a proposal and bring it forward for assessment and formal approval by the appropriate organizational members” [Cawsey et al., 2016, p. 176]) will be more likely and necessary to guide the change initiative. In short, the formal decision-making systems within the organization will be necessary in approving the OC direction/action. Using Systems to Enhance the Prospects for Approval Here, we address considerations that change initiators need to consider when seeking approval for their OC initiatives. First, is approval even necessary? If one has the power and the recognized legitimate authority to initiate OC, then initiate it! If approval is necessary, then prepare to request it. Have a proposal that shows how “the initiative is aligned with the vision and strategy of the organization”, how it “advances the organization’s agenda, and has benefits that exceed costs. If the needed changes modify the vision, strategy, or key elements that make up the organization, the change leader will need to demonstrate how such changes will enhance organizational health and have downstream benefits that exceed the costs and risk associated with these significant organizational changes” (Cawsey et al., 2016, p. 162). If you are the OC initiator, the formal system can be manipulated toward your end result. How might this be accomplished? 1) if the change involves multiple steps/iterations, introduce the change early and as an incremental process. 2) show successes early and show them relative to staged/planned intervals (e.g., by March we will have done this. By June we will have done this, etc.). 3) genuinely/validly express whether the OC is an emergency. Chapter 5 Notes - 8 4) convey to the formal organization that the OC initiative has broad acceptance, that people within the organization have been heard, they acknowledge that the OC initiative and has been reviewed and that their feedback was received and became part of the review (“the degree to which change participants accept or ‘buy into’ the change” [Cawsey et al., 2016, p. 176]). 5) reflect on and express a response to the opposition. Ways to Approach the Approval Process Let us imagine that you are proposing an OC initiative. How do you approach the formal organizational structure to obtain approval? The champion behavior tool is a 14-item scale that measures three factors that are prominent in advocating for change: 1) Express enthusiasm and confidence about the success of the innovation; 2) Persist under adversity; and 3) Get the right people involved. The OC initiator can assess whether an individual is ready to embrace change by using the 14 items below: Does the person or unit: Chapter 5 Notes - 9 enthusiastically promote the innovation's advantages express strong conviction about the innovation express confidence in what the innovation can do show optimism about the success of the innovation point out reasons why the innovation will succeed keep pushing enthusiastically stick with it show tenacity in overcoming obstacles continue to be involved with the innovation until it is implemented knock down barriers to the innovation do not give up when others say it cannot be done get problems into the hands of those who can solve them get the right people involved get key decision-makers involved Data from the above survey measures should be analyzed to: 1) identify champions within an organization and 2) help determine important skills that exist or are missing within an organization to facilitate the adoption of innovation. The result of such could ideally be a realization of creeping commitment (i.e., “the gradual increase in commitment by change participants toward the change project. Such an increase is often obtained by involving participants in decision making” [Cawsey et al., 2016, p. 176]). Creeping commitment is desirable for it shows that momentum is being gained around the proposed OC initiative. Our authors also mention another systems approach to building momentum around change. The called this coalition building (“the forming of partnerships to increase pressures for or against change” [Cawsey et al., 2016, p. 176]). Coalition building really functions to create momentum in the direction of OC by understanding and involving central players in the formal approval process. I think you all can see the intuitive appeal of coalition building but it is not without its own set of difficulties. As Cawsey et al. (2006, p. 165) note, “[t]his approach takes time and adds complexity (more fingers are in the pie) that may impede the approval process. It can also become quite political and divisive, with coalitions developing in opposition to the change that will need to be managed.” Bypassing the Formal Approval Process: Just Do It! The “just do it” approach (also called a renegade approach) comes from the work of Peter Grant who takes the position that sometimes the formal organizational system can be bypassed when the OC is justified and within their scope of authority. Chapter 5 Notes - 10 Developing Adaptive Systems and Structures “The ability of organizations to adapt to change is aided by their ability to learn” (Cawsey, et al., 2016, p. 172). As functional open-systems, organization should ideally be in learning mode all the time— acquiring and disseminating useful knowledge through the system. An organization that continually scans and learns is more likely an adaptive system and will have the internal structures that are ready to respond to change. Learning within the organization can be facilitated when the organization’s constituents do the following: Chapter 5 Notes - 11 Summation In this chapter we have explored how formal structures and systems within organizations affect OC initiatives. OC initiators must understand how these structures and systems work and with such knowledge use them to make the OC initiative adopted and successful. “Formal systems and structures can be used to advance acceptance and implementation of the change in the organization. And, finally, formal systems and structures increasingly need to be flexible and adaptive, to promote learning and set the stage for needed changes” (Cawsey et al., 2016, p. 175). Chapter 5 Notes - 12 END-OF-CHAPTER EXERCISES TOOLKIT EXERCISE 5.1 rol of trods Critical Thinking Questions ytreg Poola Please find the URLs for the videos listed below on the website at Consider this TWO Consider the questions that follow. Please read Case 2 on page 417 "Food Banks Canada: Revisiting Strategy 2012” and consider the following: (rozto bate) olor • Hon 1. Food Banks Canada is a growth and change story about a not-for-profit national organization that was created by its affiliated members to better address hunger issues and get needed food to the poor. In response to decline and poor performance, it altered its governance process, opted for a federated structure, renewed its leadership and staff, and put a renewed vision and strategy to work. Five years have passed and the CEO is considering what they should do next. Please read the Food Banks Canada case at the end of the book and consider the following: obrade or blode WOH • Katharine Schmidt is reflecting on Food Banks Canada's accomplishments and challenges of the last five years and considering what they should strategically target now. Should they stay with their current strategy or alter course? obt In thi to be • As you analyze the Food Banks Canada case to better understand their current situation, consider carefully the nature of their formal structure and decision-making process, its strengths and weaknesses, and why they selected it as their governance structure. What do you think Schmidt should recommend they do? To accomplish this, will there need to be changes to their structure or governance approach? • How should Schmidt go about generating needed support and approvals from the National Board, her staff, the Member Council, and affiliated food banks? Chapter 5 Navigating Change Through Formal Structures and Systems 179 How should she turn those approvals into successful actions and outcomes? aprilie o logre project asilien Doy gondolo 2. Food Banks Canada Hunger Count 2010—2:19 minutes GOT INTO ob Consider this video in conjunction with the Food Banks Canada case at the end of the book. Comment on how the video inspires a vision for change in Canada. toistorage describe Delib bu be bado que devanteve bastegate ad book Segesdobszoba hool • How did the video use data to engage listeners? and o project requiresvete dolabal sarad lovgilid arstile analeve bratuuril bibo bobo 3. Dr. John Kotter: Accelerate! The Evolution of the 21st Century Organization–6:07 minutes vel In this video, Kotter provides a prescription for how organizations need to structure themselves to be able to evolve successfully today. What do you think of his prescription? moguw vad wod o batolatada thew borso letos Does the On Jobs in bb Wod bas bed W 2970 ba odw • Think of an organization you are familiar with (it could be public, private, a not-for- profit, or a branch of government). What are the change implications for it, if it were to adopt this approach? now Tomsoni buolo bha bad o bobong bobove vig • What do you think this organization should do to enhance its flexibility and readiness for bolo low change? boy blow wol 2 oder cal 180 ORGANIZATIONAL CHANGE TOOLKIT EXERCISE 5.2 INWOH Impact of Existing Structures and Systems on Change Consider a change profa and a smm 1 Think of a change you are familiar with. Doa 1. How did the organization use structures and systems to deal with the uncertainty and Cool (ni moto 0109 bi obiv et toblano complexity in the environment? For major chan denko bi oni wod na inomo Was this an appropriate response? Can you desc How could the existing structures and systems have been approached and used differently to advance the desired change? ver a. Ifa proji How did existing structures and systems affect the ability of the change leader to bring about the desired change? considerhollowing b. If the a. What systems/structures were involved? belle staff, ing st b. How did these systems/structures influence what happened? bivalni sbor lezen vlovs old do Was this related to how they were formally designed or was this related to how they actually came to be used in practice? c. Do dy ិ doson c. Who influenced how the systems/structures were used, and how did this affect the outcomes that ensued? D d ovo signo Jothid ambalo emotsvog to band so on 010 gob 1. What role could incremental strategies that were nested with existing systems and structures have played? Would they have really moved the process forward or sim- ply avoided the real changes that needed to be addressed? e Oy obie 2. What role could more revolutionary strategies have played? Would they produce issues related to their alignment with existing systems and structures? 2 How would you manage the challenges created by this? od Please see for a downloadable template of this exercise. Chapter 5 Navigating Change Through Formal Structures and Systems 181 ture TOOLKIT EXERCISE 5.3 Gaining Approval for the Change Project AH Consider a change project in an organization with which you are familiar. inty and 1. What is the approval process for minor change initiatives? For major change initiatives? 6 noitesinsero onitsgiven latives? bus odio erently 2 Can you describe the processes involved? C bring olstol boltanta in wo a. If a project requires capital approval, are there existing capital budgeting processes? ing staff? b. If the project needs dedicated staff allocated to it or if it will lead to additions to staff, what are the processes for adding people permanently, and selecting and develop- andro Chat rayowledge shifor the beHD they c. Does the project alter the way work is organized and performed? the d. What are the systems and processes used for defining jobs and assessing performance? nd e. Can the project be approved by an individual? Who is that person? What approval power do they have? 1 2. Are there ways that the perceived risks of the change could have been reduced by the way the change leader staged the project and managed the approval process? od is be sted Please see for a downloadable template of this exercise.
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Exercise 5.1
Question 1
o After reading about Kathrine Schmidt and Canadas Food Banks, it becomes apparent that
there is a need for a new strategy. One major area of concern members talked about was
the strength and effectiveness of the weaker providential organizations. There was a clear
divide on donations to the national/local level versus the provincial bodies. Another area
that was highlighted was a disapproval of the aggressive activist approach being taken in
trying to gain support from the government or cooperate sectors.
Question 2
o When analyzing the Food Banks Canada case, one can see their governanc...

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