Ch. 15
Organizational Effectiveness & Development
Overview
BASK definition: The overall structure and functionality of the organization. It involves measuring the long- and short-term effectiveness and growth of people and processes, and implementing necessary organizational change.
BASK key concepts:
- Group dynamics (forming, storming, norming, performing; cohesion; conflict)
- Organizational design structures (customer, functional, geographic, matrix, program)
- Organizational analysis (performance analysis; McKinsey 7S)
Key Definitions
- Organizational effectiveness: How successfully an organization carries out its strategic objectives and mission.
- Organizational development (OD): Planned, organization-wide efforts, often using behavioral science, to improve effectiveness and health.
Organizational Design Structures
| Structure | Grouped by… | Pros | Cons |
|---|---|---|---|
| Functional | Expertise (finance, marketing, HR, operations) | Deep specialization, efficiency, clear career paths | Silos, slow cross-functional coordination |
| Divisional: product / program | Product line or program | Focus on products, accountability for results | Duplicated functions, competition between divisions |
| Divisional: geographic | Region or country | Responsive to local markets and laws | Duplication, inconsistency |
| Divisional: customer | Customer segment (government, consumer, business) | Customer focus | Duplication |
| Matrix | Two dimensions at once (e.g., function and project). Employees report to two managers. | Flexible, shares resources, cross-functional | Dual reporting causes confusion, conflict and stress. Requires strong communication. |
| Flat (horizontal) | Few management layers, wide spans of control | Fast decisions, empowerment | Managers overloaded, fewer promotion opportunities |
| Tall (hierarchical) | Many layers, narrow spans | Close supervision, clear advancement | Slow, bureaucratic |
| Team-based / network / virtual | Self-managed teams; networks of partners and contractors | Agility | Coordination and control challenges |
Design Terms
- Span of control: The number of direct reports per manager.
- Chain of command: The line of authority.
- Centralization: Decisions are made at the top. Decentralization pushes decisions down.
- Formalization: The degree of rules and procedures.
- Mechanistic vs. organic structures:
- Mechanistic structures are rigid, formal and centralized, which suits stable environments.
- Organic structures are flexible, decentralized and team-based, which suits dynamic environments.
Organizational Analysis
- Performance analysis: Compare actual and desired performance at the organization, process or individual level to find gaps and their causes.
- McKinsey 7S model: Check the alignment of strategy, structure, systems, shared values, style, staff and skills.
- Other diagnostic tools: Include SWOT, surveys, focus groups, process mapping and benchmarking.
OD Interventions
| Category | Examples |
|---|---|
| Human process | Team building, conflict resolution, process consultation, survey feedback |
| Technostructural | Restructuring, job design, process reengineering, total quality management |
| Human resource management | Performance management, rewards, career development, diversity programs |
| Strategic / transformational | Culture change, mergers, becoming a learning organization |
- Action research: A classic OD process: diagnose → gather data → give feedback to the client → plan action → implement → evaluate, repeating as needed.
- Appreciative inquiry: Builds on what works well instead of focusing on problems. Its 4-D cycle is Discover, Dream, Design, Destiny (Deliver).
Group Dynamics
These are the forces within and between groups: group formation, identity, cohesion, structure, roles, norms, influence on behavior, and intragroup and intergroup conflict. Tuckman's stages, groupthink and social loafing are critical concepts in understanding group behaviors.
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