DIO NOTES

PPT 1

1. Introduction to DIO (Designing and Implementing Organizations)

● Why DIO: This course focuses on understanding and designing organizations, their
structure, processes, and how they adapt to environmental influences.
● Learning Objectives: Gain insights into organizational design, consulting career
pathways, and placement prospects by comprehensively understanding business
environments.

2. Understanding Organizations

● Definition: Organizations are collectives with identifiable boundaries, a normative order,

ranks of authority, and communication and coordination systems.
They function continuously to meet specific goals, impacting members, the
organization, and society.
● Perspectives: Organizations can be formal/informal, for-profit, or not-for-profit.

3. Importance of Organizations
● Resource Coordination: Organizations bring together resources to achieve desired
outcomes, produce goods/services, drive innovation, and leverage technology.
● Adaptation and Value Creation:
They adapt to changing environments, create value for stakeholders, and
handle challenges like diversity and ethics.
● Facilitate Innovation
● Produce goods efficiently and services effectively
● Accommodate ongoing challenges of diversity, ethics, motivation, coordination
of employees
 4. Organizational Value Creation

● Stages: Value is created through input, conversion, and output stages, with each
influenced by the organizational environment.
● Purpose of Organizations:
○ Specialization and division of labor.
○ Economies of scale and scope.
○ Managing environmental factors, minimizing transaction costs, and exerting
control.

5. Organizational Theory, Structure, Culture, Design, and Change

● Theory: Studies how organizations function within their environments.

● Structure: The system of tasks and authority relationships guiding coordination and
resource use.
● Culture: Shared values and norms influencing internal and external interactions.
● Design and Change: Processes for structuring organizations to achieve goals,
adapting to new conditions.

6. Importance of Organizational Design and Change

• Competitive Advantage: Through effective design, organizations can outperform
competitors.
• Diversity Management: Leveraging workforce diversity improves decision-making and
effectiveness
Dealing with contingencies / Promoting efficiency, speed, innovation

How do Managers Measure Organizational Effectiveness?

Control: Having control over the external environment and having the ability to attract resources
and customers

Innovation: Developing an organization’s skills and capabilities so the organization can discover
new products and processes
Efficiency: Means developing modern production facilities using new information technologies that
can produce and distribute a company’s products in a timely and cost-effective manner:
● Innovation and Efficiency: Proper design leads to faster innovation and efficient
operations.
● Decline: Poor design can lead to resource scarcity, reduced value creation, and
employee turnover.

7. Measuring Organizational Effectiveness

● Effectiveness: The degree to which an organization reaches its goals, efficiently

utilizing resources and adapting to environments.
● Approaches:
○ Official Goals: Guiding principles shared in public documents.
○ Mission: Core purpose and function.
○ Operative Goals: Specific short- and long-term objectives for managers and
employees.

8. Organizational Charts

● Provided examples of organizational structures, illustrating different approaches to

organizational hierarchy and function alignment.
PPT 2

1. Basic Challenges of Organizational Design

● Understanding Organizations: Involves how organizations create value and maintain

effectiveness.
● Key Elements: Organizational roles, authority, control, and formalization guide an organization’s
structure and functions.

2. Dimensions of Organization Design

● Structural Dimensions: Include formalization, specialization, differentiation, and centralization.

● Contextual Dimensions: Size, technology, environment, goals and strategy, and culture impact
organizational structure.

3. Organizational Roles

● Specialization and Division of Labor: As labor is divided, managers and employees specialize
in roles, developing expertise.
● Authority and Control: Authority enables accountability, while control allows coordination in
pursuit of organizational goals.

4. Differentiation
The process by which an organization allocates people and resources to organizational tasks
Establishes the task and authority relationships that allow the organization to achieve its goals
Division of labor: The process of establishing and controlling the degree of specialization in the organization

● Vertical Differentiation: Establishes a hierarchy to define authority and reporting relationships.

● Horizontal Differentiation: Groups tasks into roles and subunits to enhance specialization.

5. Subunits: Functions and Divisions

● Functions: Groups people with similar skills to perform specific tasks.
● Divisions: Combine functions to produce specific goods or services, increasing organizational
complexity.
● Organizational complexity: The number of different functions and divisions possessed by an
organization
6. Integration

● Challenge: Managers balance differentiation and integration, ensuring specialized functions work
together effectively.
● Mechanisms: Include direct contact, liaison roles, task forces, teams, integrating roles, and
departments.

7. Centralization vs. Decentralization

● Centralization: Decision-making authority is concentrated at the top.

● Decentralization: Authority is delegated throughout the hierarchy, allowing flexibility and
responsiveness.

8. Standardization vs. Mutual Adjustment

● Standardization: Enforces conformity through rules and norms.

● Mutual Adjustment: Encourages flexibility, allowing managers to adapt decision-making to
evolving situations.

9. Formalization

● Rules and Norms: Standardize behaviors, with socialization helping members internalize norms
and procedures.
● Rules: Formal, written statement that specify the appropriate means for reaching
desired goals
● Norms: Standards or styles of behavior that are considered acceptable or typical for a
group of people
● Socialization: Organizational members learn the norms of an organization and
internalize these unwritten rules of conduct

10. Types of Integration Mechanisms

● Direct Contact: Managers meet directly to coordinate activities.

● Liaison Roles: Designated managers coordinate across subunits.
● Task Forces and Teams: Address specific or ongoing issues, respectively.
● Integrating Roles and Departments: Focus on improving communication and coordination
across divisions.

11. Mechanistic vs. Organic Structures

● Mechanistic Structures: Best for stable environments; emphasize formalization and centralized
authority.
● Organic Structures: Effective in dynamic environments; flexible, decentralized, and adaptable.
12. Contingency Approach to Organizational Design

● Environmental Fit: Structures should align with environmental stability or uncertainty to enhance
effectiveness.
● Lawrence and Lorsch Findings: Complex environments benefit from decentralized, less
formalized structures.
● Burns and Stalker: Mechanistic structures suit stable environments, while organic structures are
effective in unstable ones.
PPT 3

Why Hierarchies Form (Vertical Differentiation)

• Hierarchies help manage coordination and motivation among employees.
• As companies grow, tasks become specialized, making it harder to evaluate individual
contributions.
A hierarchy, or chain of command, can address this by adding layers of managers to
oversee and support employees.
• Division of labor and specialization make it hard to determine how well an individual
performs
• To deal with coordination and motivation problems, the organization can:
▪ Increase the number of managers it uses to monitor, evaluate, and reward employees
▪ Increase the number of levels in its managerial hierarchy
• By the time an organization has 1,000 members, it has 4 levels in its hierarchy ▪ At 3,000
members, it likely has 7 levels ▪ Between 10,000 to 100,000, organizations have 9 or 10
levels

3. Tall vs. Flat Organizations

• Tall organizations have many levels relative to their size, while flat organizations have
fewer levels.
• Tall hierarchies can lead to communication, motivation, and bureaucratic costs.

4. Problems with Tall Hierarchies

• In tall structures, information can get distorted as it moves up and down levels, and
excessive layers can slow decision-making and responsiveness. This can create
bureaucratic costs.

5. Parkinson’s Law in Organizations

• This concept suggests that hierarchies often grow because managers tend to add
subordinates.
• This can lead to unnecessary work and additional layers, which may not be essential for
the organization’s efficiency.

6. Ideal Number of Hierarchical Levels

• The Principle of Minimum Chain of Command suggests keeping the hierarchy as small as
possible while achieving the organization’s goals.
• Additionally, a manager’s span of control—the number of employees they directly
manage—should be balanced.
 • A narrow span is better for complex, varied tasks, while a wider span works well for
routine tasks.

7. Horizontal Differentiation
• Organizations often divide into sub-units or departments, each with its own hierarchy. \
• This helps maintain control without adding too many vertical layers.
• Each function or division has its hierarchy, which allows specialization within departments.
• Horizontal differentiation is the principal way an organization retains control over
employees without increasing the number of hierarchical levels

9. Centralization vs. Decentralization

• Centralization means decision-making authority is kept at the top of the hierarchy, which
can lead to slower responses.
• Decentralization distributes decision-making power across various levels, allowing quicker
actions and solutions closer to where the issues arise.

9. Standardization
• Managers can ensure predictable behavior by setting standard procedures.
This reduces the need for personal oversight and minimizes the hierarchy’s growth, as
standardized routines replace hands-on management.

10. Bureaucracy and Its Principles

A form of organizational structure in which people can be held accountable for their actions
because they are required to act in accordance with rules and standard operating procedures

• Bureaucracy involves a structured hierarchy with clear rules and roles, ensuring
accountability and standardized actions.
This structure helps reduce enforcement costs and makes it easier to evaluate employees
fairly.
11. Advantages and Drawbacks of Bureaucracy

• It lays out the ground rules for designing an organizational hierarchy that efficiently
controls interactions between organizational members
• Each person’s role in the organization is clearly spelled out and they can be held
accountable
• Written rules regarding the reward and punishment of employees reduce the costs of
enforcement and evaluating employee performance
Drawbacks

• Managers fail to properly control the development of the organizational hierarchy ▪

• Organizational members come to rely too much on rules and standard operating
procedures (SOPs) to make decisions
• Such overreliance makes them unresponsive to the needs of customers and other
stakeholders

PPT 4

1. Functional Structure
• Definition: A basic structure where employees are grouped based on similar skills or roles
(e.g., marketing, finance).
An organization groups tasks into functions to increase the effectiveness with which it
achieves its goals
Functional structure is the bedrock of horizontal differentiation
 • Advantages:
o Allows employees to specialize and learn from each other, increasing productivity.
o Employees with similar skills can supervise and support one another.
• Problems:
o Communication challenges arise between functions (e.g., marketing and
production).
o Difficulties measuring performance and coordination across functions.
o Location problems
o Customer problems
o Strategic problems

2. Control Problems in Functional Structures

• As organizations grow, they face issues managing various functions effectively.
• Solutions involve redesigning the structure to improve integration and coordination across
departments.
3. Divisional Structure

A structure in which functions are grouped together according to the specific demands of
products, markets, or customers
Definition: Divides the organization based on products, geography, or markets.
• Product Structure:
o Each product line has its own division with separate teams for support.
o Centralized support teams can serve multiple product lines, allowing specialization.
• Geographic Structure:
o Organizes divisions based on location, enabling each region to cater to local
customer needs.
o Balances centralized and decentralized functions based on regional demands.
• Market Structure:
o Organizes divisions around different customer groups, allowing customization to
specific needs.

4. Multidivisional Structure
• Each division operates independently, with its own support functions and goals.
 • Advantages:
o Greater control over divisions, increased effectiveness, and opportunities for
growth, Internal labor market.
• Challenges:
o Coordination between divisions, additional bureaucratic costs, and potential
conflicts in resource allocation.

5. Matrix Structure
• Definition: Combines functional and product structures, where employees report to two
managers (functional and product/project).
People and resources are grouped in two ways simultaneously:
• By function
• By project or product

• Advantages:
o Encourages communication and collaboration between functions and product
teams.
o Allows flexible allocation of skilled professionals across projects.
• Challenges:
o Can lead to conflicts between product and functional managers, unclear roles, and
authority issues.

6. Hybrid Structure
• Large organizations may use a mix of structures (e.g., some divisions use functional while
others use product or geographic structures).
• This allows each division to adopt the structure that best meets its specific needs.
7. Network Structure
• Definition: A structure where companies collaborate with external partners (suppliers,
distributors) through contracts instead of formal hierarchies.
• Advantages:
o Lowers production and operational costs, increases flexibility, and allows easy
replacement of underperforming partners.
• Challenges:
o Requires constant coordination and communication with network partners.

PPT 5

Notes on Organizational Design: Environment and Strategy

Organizational Environment

a. Environment: External forces that impact organizational operations and resource

access.
b. Organizational Domain: The range of products, services, and stakeholders served
by the organization.
c. Specific Environment: Directly impacts resource access, influenced by
factors like customer changes, global supply chains, and local laws.
d. General Environment: Broader forces shaping resource availability for all
organizations in a sector.
Resource Dependence Theory

e. Objective: Minimize dependence on other organizations for resources and

influence resource availability.
f. Strategies: Linkage mechanisms like alliances or mergers to manage
interdependencies and reduce uncertainty.

Inter-organizational Strategies for Resource Dependencies

g. Strategic Alliances: For both symbiotic (mutual benefit) and

competitive
h. interdependencies.
i. Mergers/Takeovers: Full acquisition to control problematic dependencies.
j. Transaction Cost Theory: Focuses on minimizing costs related to resource
exchanges,balancing with internal bureaucratic costs.
Interorganizational Strategies for Managing Resource Dependencies

Collusion: A secret agreement among competitors to share information for a deceitful or illegal
purpose
Cartel: An association of firms that explicitly agrees to coordinate their activities
Third-party linkage mechanism: A regulatory body that allows organizations to share information
and regulate the way they compete
Strategic alliances - Can be used to manage both symbiotic and competitive interdependencies
Merger and takeover - The ultimate method for managing problematic interdependencies

Transaction Costs and Linkage Mechanisms

k. Low Transaction Costs: Nonspecific exchanges with low uncertainty.

l. High Transaction Costs: Specific exchanges with high uncertainty and fewer
partners.
m. Example: Toyota's Keiretsu model, using minority ownership for control over
suppliers.

Transaction cost theory can be used to choose an interorganizational strategy

Managers can weigh the savings in transaction costs of particular linkage mechanisms against the
bureaucratic costs
Using Transaction Cost Theory to Choose an Interorganizational Strategy

Managers deciding which strategy to pursue must take the following

steps:
Locate the sources of transaction costs that may affect an exchange relationship and decide how
high the transaction costs are likely to be

Estimate the transaction cost savings from using different linkage mechanisms

Outsourcing

n. Definition: Shifting non-core activities to external specialists.

o. Advantages: Reduced costs, flexibility, and access to specialized skills
Organizational Strategy and Core Competencies

p. Core Competencies: Unique skills and resources providing competitive

advantages in efficiency, quality, and innovation.
q. Global Expansion: Extending core competencies internationally for cost
benefits and access to unique resources.
r. Four Levels of Strategy:
i. Functional-Level: Strengthening departmental resources.
ii. Business-Level: Positioning in competitive markets.
iii. Corporate-Level: Diversifying and expanding domains.
iv. Global Expansion: Selecting strategies for international markets.

Four Levels of Strategy

Functional-Level Strategy

s. Goal: Create a core competency to gain an edge.

 t. Methods: Cost reduction or product differentiation through efficient production,
HRM, and R&D.
u. Structure and Culture: The strategy should align with the structure and
foster asupportive culture.

Business-Level Strategy

v. Objective: Define market domain and gain an advantage.

w. Types:
i. Low-Cost Strategy: Efficiency in cost creation.
ii. Differentiation Strategy: Premium product offerings.
iii. Focus Strategy: Specialization in a specific market segment.

Corporate-Level Strategy

x. Expansion: Vertical integration, related and unrelated diversification.

y. Structures:
i. Multidivisional Structure: Suitable for diversified domains.
ii. Conglomerate Structure: For unrelated diversification.
iii. Coordination: Lateral and vertical communication is essential for synergy.

Implementing Strategy Across Countries

z. Four Principal Strategies:

i. Multidomestic: Decentralized for local responsiveness.
ii. International: Centralized R&D and marketing, decentralized operations.
iii. Global: Centralized for cost efficiency.
iv. Transnational: Combination of centralized and decentralized functions.
aa. Structures:
i. Global Geographic Structure: For multidomestic strategies.

ii. Global Product Group Structure: For international strategies.

○
Global Matrix Structure: For transnational strategies, combining global efficiency with local
responsiveness.
PPT 6

Notes on Power, Politics, and Conflict in Organizations

Organizational Power
● Definition: Organizational power is the ability of a person or group to overcome
resistanceto achieve desired objectives.
It is closely linked with conflict.
● Sources of Power:
○ Authority: Legitimate power based on legal and cultural foundations.
○ Empowerment: Decentralization of authority.
○ Control over Resources: Greater control over resources boosts power.
○ Control over Information: Access to and control of strategic information.
○ Nonsubstitutability: Irreplaceable tasks grant power.
○ Centrality: Central roles in resource flows hold more power.
○ Control over Uncertainty: Ability to manage uncertainties.
○ Unobtrusive Power: Influence over decision-making premises.

Organizational Politics
● Definition: Actions aimed at acquiring, developing, and using power to achieve
preferredoutcomes amid uncertainty.
● Political Tactics:
○ Increase Indispensability: Become crucial to operations.
○ Increase Nonsubstitutability: Develop unique skills.
○ Increase Centrality: Take on reputation-enhancing responsibilities.
○ Associate with Powerful Managers: Build alliances with influential leaders.
○ Build Coalitions: Form relationships with key stakeholders.
○ Control the Agenda: Set the decision-making issues.
○ Use Outside Experts: Neutral outsiders to support views.
● Costs and Benefits: Political balance is crucial; unchecked power leads to restricted
debate, increased conflict, and organizational inertia.

Organizational Conflict
● Definition: Conflict arises when one group’s actions block another’s goals. It can
beconstructive but may hinder effectiveness if excessive.
● Sources of Conflict:
○ Interdependence: Reliance on other units.
○ Goal Differences: Clashing priorities.
○ Bureaucratic Factors: Rigid procedures.
○ Performance Criteria Conflicts: Differing success measures.
 ○ Resource Competition: Limited resource access.

Pondy’s Model of Conflict

● Stages of Conflict:
1. Latent Conflict: Underlying potential for conflict.
2. Perceived Conflict: Awareness and analysis of conflict.
3. Felt Conflict: Emotional responses and polarization.
4. Manifest Conflict: Active aggression and passive resistance.
5. Conflict Aftermath: Resolution or recurrence.

Conflict Resolution Strategies

● Structural Level:
○ Adjust roles and hierarchy to reduce interdependence conflicts.
○ Increase integrating roles and involve top managers in conflict resolution.
● Individual Level:
○ Implement procedural systems for grievances.
○ Use third-party negotiators or personnel adjustments to manage disputes.

By understanding power dynamics, political tactics, and conflict management, organizations can
foster a balanced environment conducive to both cooperation and constructive conflict.
PPT 7

Notes on Emerging Organizational Forms

Global Organization Design Forms

● Distributed and Integrated Designs: These design forms adapt to global markets, using
functional, divisional, matrix, or hybrid structures to manage operations across various
regions.

Contemporary Organizational Structures

● Traditional Structures: Functional, divisional, and matrix structures serve as the
foundation for organizational design, each with specific methods for managing
resources and information.
● Emerging Structures: Network organizations, boundaryless organizations, virtual
organizations, team-based organizations, agile organizations, and learning
organizations reflect modern adaptations for flexibility and innovation.

Network Organization
● Structure: Eliminates many in-house functions, relying on external networks of
suppliers and contractors to handle operations.
● Advantages: Reduced production costs, flexibility, and the ability to quickly
replace partners who do not meet standards.
● Disadvantages: High coordination demands and possible loss of control over
outsourced activities.

Boundaryless Organization
● Definition: Organizations without traditional boundaries, often virtual, with
extensive use of IT for operations.
● Types:
○ Business-to-Business (B2B): Online trade between companies.
○ Business-to-Customer (B2C): Direct customer engagement through IT.

Virtual Organization
● Characteristics: Small, minimal formal structure with project-based collaborations
linked by technology.
● Advantages: Efficient, responsive, and adaptable to customer needs.
● Limitations: Challenges in developing innovation and maintaining control overcore
competencies.

Team-Based Organization
● Structure: Operates primarily through project-based teams rather than traditional
hierarchies.
● Advantages: Improved communication, higher morale, and faster
decision-making.
● Disadvantages: Conflicting loyalties, time demands for meetings, and
dependency on interpersonal dynamics.
Agile Organization

● Definition: Designed to quickly adapt to changes, focusing on customer needs

rather than profit.
● Characteristics: Customer-centric, networked teams, shared purpose, fast
learning cycles, and technology integration.
● Examples: Companies like Google, Amazon, Netflix, and Adobe exemplify agile
practices.

Learning Organization

● Definition: An organization that fosters continuous improvement, learning, and

adaptation among employees.
● Key Attributes: Encourages adaptive and generative learning, decentralization,and
employee collaboration.

Designs with Open Boundaries

● Hollow Structure: Focuses on core competencies while outsourcing other functions.

● Modular Structure: Outsources parts of a product instead of entire processes,
allowing for flexible production and assembly.

PPT 7a

Notes on Designing Global Organizations

Entering the Global Arena

● Global Development: The world is increasingly interconnected, with emerging

economies like BRIC (Brazil, Russia, India, China) rapidly growing as major
markets.
● Motivations for Global Expansion:
○ Economies of Scale: Lower production costs through increased output.
○ Economies of Scope: Cost savings from broadening product lines.
○ Low-Cost Production Factors: Access to cheaper labor and resources
abroad.

Stages of International Development

1. Domestic Stage: Focus on home country.

2. International Stage: Begin exporting or licensing products.
3. Multinational Stage: Establish operations in multiple countries.
4. Global Stage: Integrate operations globally, adapting to diverse cultures and
markets.
Global Expansion through Alliances and Acquisitions

● International Alliances: Partnerships like licensing and joint ventures with localfirms
to access new markets.
● Acquisitions: Purchase of foreign companies for direct market entry.

Challenges in Global Design

● Complexity and Differentiation: Managing diverse markets and cultures.

● Coordination Needs: Ensuring that international divisions work together
effectively.
● Knowledge Transfer and Reverse Innovation: Bringing insights from emerging
markets back to the core organization.

Strategies for Global vs. Local Opportunities

● Globalization Strategy: Standardized products worldwide to achieve efficiency.

● Multidomestic Strategy: Adapt products and strategies to local needs.
● Glocalization Strategy: Combines global integration with local responsiveness.

Global Organization Structures

1. International Division: Separate division for international operations.

2. Global Product Structure: Divisions organized by product line across global
markets.
3. Global Geographic Division: Divisions organized by region to tailor strategieslocally.
4. Global Matrix Structure: Combines product and geographic focus to addressboth
global standardization and local needs.
Additional Global Coordination Mechanisms

● Transnational Teams: Cross-border teams for diverse perspectives and

collaborative solutions.
● Headquarters Planning: Centralized planning with localized execution.
● Expanded Coordination Roles: Key roles to ensure alignment across
geographies.

Transnational Model

● Goal: Achieve efficiency, responsiveness, and learning.

● Characteristics:
○ Distributed resources globally.
○ Flexible and adaptable structure.
○ Coordinated by shared culture, vision, and values.

Organizational Design Essentials

● Stages of Evolution: Domestic, international, multinational, and global stages.

● Complex Structures: Many firms combine structures (e.g., product and
geographic) for flexibility.
● Transnational Model as the Ultimate Global Design: Represents complex
integration and interdependence across units.

These organizational forms and strategies allow companies to effectively manage global
operations, balancing standardization with adaptation to local markets, and fostering
collaboration to compete globally.

PPT 8

Organizational Life Cycle Stages

1. Birth: Founding of an organization by entrepreneurs aiming to create value.

○ Liability of Newness: High failure risk due to lack of structure and
experience.
○ Population Ecology Theory: Explains factors influencing birth/deathrates
of organizations in competitive environments.
○ Environmental Niches: Specific resources available to organizationswithin
a population.
2. Growth: Development of skills and competences to acquire resources.
○ Institutional Theory: Growth and survival depend on legitimacy in theeyes
of stakeholders.
○ Organizational Isomorphism: Similarity among organizations due to
coercive, mimetic, and normative pressures.
3. Decline: Occurs when an organization fails to respond to internal/external
pressures, risking long-term survival.
 ○ Causes of Decline: Overexpansion, inability to adapt to environmental
changes, and excessive bureaucracy.
○ Organizational Inertia: Resistance to change due to internal forces,
including risk aversion and self-interest among managers.
4. Death: Final stage when an organization cannot sustain itself due to failure toadapt
or secure resources.

Population Ecology Model

● Population Density: Number of organizations competing for resources,
influencing birth rates.
● Survival Strategies:
○ r-strategy: Entering a new environment early.
○ K-strategy: Entering later after market conditions stabilize.
○ Specialist vs. Generalist: Specialists focus on narrow niches; generalistscover
a broad range.

Natural Selection in Organizations

● Selection Process: Organizations with the best environmental fit survive.

● Resource Competition: Weaker organizations unable to adapt are phased out.

Institutional Theory of Growth

● Isomorphism: Organizations adopt similar structures to gain legitimacy.

○ Coercive Isomorphism: Influence from external rules and regulations.
○ Mimetic Isomorphism: Imitating successful peers.
○ Normative Isomorphism: Following industry norms and standards.
● Challenges of Isomorphism: Risk of outdated practices and reduced
innovation.
Organizational Decline and Death

● Effectiveness and Profitability: Assessed through resource use and long-term

profitability.
● Causes of Decline:
○ Organizational Inertia: Internal forces making change difficult.
○ Risk Aversion: Managers' reluctance to adopt uncertain changes.
○ Overly Bureaucratic Culture: Excessive property rights, focusing moreon
self-protection than organizational growth.
● Environmental Changes: Scarcity of resources due to external factors thatmake
adaptation necessary but challenging.

The organizational life cycle provides a framework for understanding how organizationsgrow,
compete, adapt, and sometimes fail. Key strategies include maintaining adaptability, fostering
innovation, and aligning with environmental demands to ensure
long-term survival.

PPT 9
Here are the key notes based on your PowerPoint presentation on Types and Forms of
Organizational Change:

1. What is Organizational Change?

● Organizational change is the process through which organizations transition to a

desired future state to improve effectiveness.
● It involves finding better ways to utilize resources and capabilities, enhancingvalue
creation.

2. Targets of Change

● Human Resources: Includes training, development, culture building, reward

systems, and changes in management team composition.
● Functional Resources: Involves reallocating resources to create more value,
adapting structure, culture, and technology.
● Technological Capabilities: Aimed at enhancing the organization’s capacity to
leverage new market opportunities, often a core competence.
● Organizational Capabilities: Alters culture and structure to better utilize humanand
functional resources.

3. Forces for Change

● Competitive Forces: Pressure to match or exceed competitors in efficiency,

quality, and innovation.
● Economic, Political, and Global Forces: Necessitate changes in production,
structure, and adaptation to various cultural environments.
 ● Demographic and Social Forces: Workforce diversity and social changes requireethical
practices and inclusion strategies.
● Ethical Forces: Increasing demand for responsible corporate behavior, with roleslike
ethics officers to address these issues.

4. Resistance to Change

● Organization-Level Resistance: Caused by power struggles, structural rigidity,and

cultural inertia.
● Group-Level Resistance: Stemming from group norms, cohesiveness, and
phenomena like groupthink.
● Individual-Level Resistance: Includes uncertainty, selective perception, and
habitual behavior.

5. Lewin’s Force-Field Theory of Change

● Change occurs when forces for change exceed forces resisting change, breaking
organizational inertia.
● Managers can facilitate change by amplifying driving forces or reducing resistingforces.

6. Types of Organizational Change

● Evolutionary Change: Gradual, incremental adjustments focused on specificareas.

● Revolutionary Change: Sudden, sweeping changes that transform the
organization broadly.

7. Developments in Evolutionary Change

● Sociotechnical Systems Theory: Aligns technical systems with organizationalculture

to enhance effectiveness.
● Total Quality Management (TQM): Continuous improvement driven bycross-
functional teamwork and quality circles.
● Flexible Workers and Teams: Employees are trained in multiple tasks, enabling
adaptability and teamwork.

8. Developments in Revolutionary Change

● Reengineering: Redesigning roles and processes for efficiency, focusing on

outcomes over traditional functions.
● E-Engineering: Leveraging information systems for performance improvement.
● Restructuring and Downsizing: Adjusting task-authority relationships and
reducing hierarchy to cut costs.

Levin's Force-Field Theory of Change

• This theory of change argues that two sets of opposing forces within an
organization determine how change will take place
 • Forces for change and forces making organizations resistant to change
• When forces for and against change are equal, the organization is in a state of
inertia
• To change an organization, managers must increase forces for change and/or
decrease forces resisting change

9. Lewin’s Three-Step Change Process

● Unfreezing: Preparing the organization for change by creating awareness of theneed

for change.
● Changing: Implementing the change through new processes, roles, or strategies.
● Refreezing: Stabilizing the organization with the new changes integrated into theculture
and operations.

This overview covers the types, forces, targets, and methods of managing organizational
change discussed in the presentation. Let me know if you need moredetailed notes on
specific sections.
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