Practical Organizational Considerations
The learning objectives of this chapter are:
- • Critical Variables in Organizational Transformation
- • Organizational Structures and the Impact of Politics
- • Leadership, Performance, and Culture
- • The Complexities of Change Management and Organizational Theory
Several organizational components affect change initiatives and transformations because of their critical influence throughout the organization. The components are Human Resource (HR) policies, internal and external stakeholders, and the organizational culture. The holistic nature of an organization is dependent upon the employees that develop goals, perform the processes of achieving goals, as well as creating culture. The people associated with an organization include more than just internal employees; the external people involved with an organization are often critical to the success of the organization. The development of a transformation effort that involves the entire organization requires careful and comprehensive planning and involvement of the organization to realize success. The key variables are organizational structure, human resource policies, leadership and trust, and performance measures.
Critical Variables in Organizational Transformation
A large-scale organizational transformation affects the entire organization, and several vital variables should be considered to ensure the most excellent chance of success in implementing the change. The key variables are organizational structure, Human Resource policies, leadership and trust, and performance measures. The organizational structure reflects the established authority relationships, and any associated diagram illustrates how the organization chart is aligned for business performance. Human Resource policies are the rules by which the organization operates from both an operational and administrative perspective. The policies provide the guidelines through which people are compensated, rewarded, and told how to behave while at work.
In some cases, the policies may also include requirements as to how an employee must behave outside of work. The leadership of an organization provides management, vision, and establishes the reasons why things are done. The leadership leads the organization; without the explicit and reasoned leadership, the organization is lost. Also, the trust aspect of leadership must be without question. If the workers cannot trust the leaders, there will likely be a severe problem between employees and management; the lack of trust will lead to little effort on the part of the workers. Performance measures allow an organization to understand how well goals are accomplished according to established criteria. Establishing the criteria to assess the performance of individuals, groups, and significant parts of the organization allows the company to determine the effectiveness and act accordingly to continue to achieve goals as planned or modify plans to become more efficient.
The organizational structure is a description of the official authority relationships within the organization. The structure of the organization represents the people within the organization. The organizational diagram is representative of the design selected for the organization; a typical design shows the senior leader at the top of the structure and the hierarchical display of the employees below. The diagram identifies the positions of the employees according to the desired presentation approach; some examples of the approaches might be functional, geographic, or product. The structure of the organization, as described in a diagram, represents the official or formal relationships. However, there are also informal relationships within the organization that may not match the structural diagram. The informal relationships reflect personal and professional friendships that influence the organization; these relationships are not a function of the structure but may have a tremendous impact on processes. The informal nature of relationships will affect operational processes. The processes are expected to follow a particular flow according to the organizational structure but may follow a very different workflow. Planning for transformational change should consider both the official and unofficial structures of the organization.
The functional, geographic, or product approaches to designing the organization are practical issues that must be understood during the development of a change initiative. The functional design groups the workers according to their job function. For instance, the security department contains the security employees, and the finance department consists of the finance employees. The geographic design represents the organization according to the location within a state, country, or region of the world. The geographic design often indicates the decentralization of job functions. The product design is similar to the geographic, except the design is based on the product or service created for the organization. The decentralized product and geographic approaches reflect the specific purpose of the structural design. However, there is also the possibility that the organizational design is a hybrid of one of these designs. A hybrid design takes the best parts of various designs and incorporates them into a design that benefits the organization; following hard-set rules about design is the antithesis of a supportive and effective organizational design. The design of the organization should match the most efficient reflection of the organizational accomplishment of business goals and strategies. Transformational change must account for the best design possible and acknowledge the importance of following the approved synergistic design.