Organizational Design and Change Recommendation - Case Study Example

Organizational Design and Change Recommendation Problem Diagnosis There is employee resentment among the employees of TAJ HOTELS and the supervisors are highly de motivated and never train the employees. At this situation, the organizational structure has to be changed and the supervisors must be promoted to an executive cadre and the entire organization structure has to be rephrased. The Clear plan is to change the organizational structure and also to develop an organizational culture at TAJ HOTELS accepted by both management and the employees. Redesign the organizational structure at TAJ HOTELS Aim: To identify the pros and cons of various structures potential structures and provide academically or professionally supported justification for why the final structure is selected based on assessing the costs and challenges of implementing the structure. An Organizational structure defines how job tasks are formally divided, grouped and coordinated. The main elements to consider while designing an organizational structure are Work Specialization, departmentalization, chain of command, span of control, centralization and decentralization and formalization. The most common Organizational designs found in use are Simple or Flat structure The Bureaucracy The Matrix structure The Team Structure The Virtual Organization The Boundaryless Organization The simple structure is characterized by a low degree of departmentalization, wide spans of control, authority centralized in a single person, and little formalization. The strength of the simple structure lies in its simplicity. It’s fast, flexible and inexpensive to maintain and accountability is clear. One major weakness is that it is difficult to maintain in anything other than a small organization. The decision making becomes slow as the organization grows in size because of its low formalization and high centralization. A bureaucracy is characterized by highly routine operating tasks achieved through specialization, much formalized rules and regulations, tasks that are grouped into functional departments, centralized authority, narrow spans of control, and decision making that follows the chain of command. The primary strength of bureaucracy lies in its ability to perform standardized activities in a highly efficient manner. One of the major weakness of this structure is that it causes departmental conflicts and highly inflexible always following the rules. There is no room for modification The Matrix structure is characterized by dual lines of authority and combines product and functional departmentalization. IBM adopts a modified version of the matrix structure in its overall operations. The strength of this structure lies in its ability to facilitate coordination and efficient allocation of specialists. The major disadvantage lies in the confusion it creates, its prosperity to foster power struggles, and the stress it places on individuals. The Team structure uses teams as the central device to coordinate work activities. Companies like DaimlerChrysler, Saturn, Motorola and Xerox have made extensive use of self managed teams to improve productivity at the operational level. In smaller companies, the team structure can define the entire organization. For instance, Imedia, a 30 person marketing firm in New Jersey is completely organized around teams. This structure is highly unsuitable for large companies. A Virtual organization is a small core organization that out sources major business functions. Ancle Hsu and David Ji run a virtual organization. Their firm, California based Apex Digital, is one of the world’s largest producers of DVD Players, yet the company neither owns a factory nor employs an engineer. They contract everything out to firms in China. This is suitable for small and large organizations. The major advantage is the flexibility and the disadvantage is lack of managerial control in key aspects of business. The Boundaryless organization is an organization that seeks to eliminate the chain of command, have limitless spans of control, and replace departments with empowered teams. Stephen P. Robbins, Organizational Behavior, Tenth Edition, Prentice Hall of India. Pg. 425-446 Recommendation TAJ HOTELS can adopt a mix of Matrix Structure and Team structure in its operations. Using a Matrix structure, TAJ HOTELS can have dual lines of authority and this ensures the efficient management of employees with proper work schedules and the supervisors can focus on training new employees and the employees can be managed by creating self managed teams with team leaders for each department. The cost of adopting this structure is the benefits of other structures and weakness of these structures. Develop an Organizational Culture at TAJ HOTELS When a culture is developed, most of the problems will be solved among the employees. The cultural variables that will affect team communication and interaction are 1. Employees themselves 2. Low Formalization 3. Empowerment 4. Good listening skills 5. Role clarity 6. Managerial Action 7. Selection 8. Training and Socialization 9. Structural design 10. Leadership 11. Performance Evaluation 12. Reward Systems Need for Change The forces that make change a necessity include Nature of the workforce The workforce nowadays is highly diverse composing of culturally diverse employees. This is an era for professionals and they make the change certain. There are many new entrants with inadequate skills to match the traditional way of practicing the work. So, the work has to be changed to the changing workforce. Technology Technology is the important aspect forcing change. Nowadays, technology has been growing in leaps and bounds and organizations must change rapidly to keep pace with the changing technology. The main reasons for technological development are faster and cheaper computers, new mobile communication devices and deciphering of the human genetic code. It has become mandatory for companies to monitor the advancements in technology and update themselves with the recent technology. Economic Shocks A lot of economic shocks like the rise and fall of dot com stocks, decline in the value of Euro and the collapse of Enron Corporation lead to change. Competition A healthy competition ensures change to a large extent. Companies change over a period of time to stay in the competition and maintain their position in the market. Nowadays with the global competition, companies compete globally and change to the prevailing conditions in the changing world. Social trends The changing social trends like internet chat rooms, retirement of baby boomers and increased interest in urban living etc. has led to change in work culture and standard of work. Organizations change themselves and produce products and services catering to the social trends. World Politics The free trade agreements and nuclear deal between nations and other important world politics will lead to a great change in the operations of the companies with a technology transfer between companies and nations. - Stephen P. Robbins, Organizational Behavior, Tenth Edition, Prentice Hall. Pg. 425-446 In the case of TAJ HOTELS, the major drivers of change include Nature of the work force and Social Trends. These issues have to be addressed primarily to bring a change. Individual resistance to change Individual sources of resistance to change reside in basic human characteristics such as perceptions, personalities and needs. Individuals resist change mainly due to the following reasons: Human beings are creatures of habit and heavily rely on habits or programmed responses for decision making. When a change occurs, the habit has to be changed which will act as a source of resistance. Habits are very hard to change. People with a high need for security are likely to resist change because it threatens their feeling of safety. When a new automatic machine enters the company, employees tend to lose their jobs and resist the change. Another source of individual resistance is concern that changes will lower one’s income. Changes in job tasks or established work routines also can arouse economic fears if people are concerned that they won’t be able to perform the new tasks or routines to their previous standards. Changes substitute ambiguity and uncertainty for the known. For example, the introduction of quality management makes it mandatory for every employee to learn statistical procedures. This will cause resistance as most employees think they will be not able to do so. Individuals shape their world through perceptions. Once they have created this world, it resists change. So individuals are guilty of selectively processing information in order to keep their perceptions intact. They ignore information that challenges the world they have created. -Garry Dessler, Human Resource Management, Eastern Economy edition. Pg 465-479. Strategies to manage change Change has become a way of life for most organizations. Pressure from increasing competition, globalization, technological developments, and other forces has created an environment that rewards an organization that are capable of identifying trends and issues and responding quickly to them. Change is the only permanent thing in this world and when organizations change there are many forces of resistance against the change and culture is one of the important forces of resistance. HRM Techniques play a major role in changing the organizational culture. The major Interventions used in bringing a change include Human Processual, Techno structural, Socio technical systems and organization transformation. The various HRM Techniques include Action research, Organizational development, Sensitivity Training, Survey Feedback, Process Consultation, Team Building, Inter group development, Appreciative enquiry. Cummings & Worley, Organization Culture and Change , 2005, page 490 HR Interventions for Organizational culture change Interventions are mainly focused on changing the culture through changing employee behavior, Organization structure, Infrastructure and change with the external environment. Human Process Interventions (Group and Individual Human Relations) These interventions are directed at improving inter personal, intra group, and inter group relations in a culturally mixed workforce and bring a change in the individual’s beliefs and attitude to suit the organizational culture. They focus on helping members of the organization to enhance themselves, each other and the ways in which they work together in order to enhance their overall organization. Techno structural Interventions (Structures, Technologies, Positions) The purpose of techno structural interventions is to improve work content, work method, and relationships among workers and lower costs by replacing inefficient materials, methods, equipment, work flow designs and costly unnecessary labor with more efficient technology. These interventions might also be useful in new organizations where internal operational systems must be developed and implemented. Human Resource Management Interventions (Individual and Group Performance Management) The following activities aim to enhance overall organizational performance by improving the performance of individuals and groups within the organization. Performance is in regard to setting goals, monitoring progress to the goals, sharing feedback, reinforcing activities to achieve goals and dissuading those that don't. Some of the techniques include Employee Performance Management, Employee Development, and Employee Wellness Programs. Strategic Interventions (Organization and Its External Environment) The following activities focus especially on the organization and its interactions with its external environment, and often involve changes to many aspects of the organization, including employees, groups, technologies, products and services, etc. These are the various strategies and HRM techniques that can be adopted to bring an organizational change breaking the resistance to change from culture. Randy L. Desimone, Jon M. Werner and David M. Harris, Human Resource Development, Pearson education. Pg. 225 – 239 Change Model Recommendation for TAJ HOTELS The following model serves as a framework for brining a change in the behavior of an individual at TAJ HOTELS. According to the model of planned change, the first stage is selecting the change intervention. Organizational transformation and Organizational Development are the famous interventions involved in bringing a change. Organizational transformation is aimed at bringing a change in the management, changing the vision, purpose and mission of an organization. Organizational Development is aimed at changing the work setting. Both the interventions finally attempt to change the behavior of an individual. The second part of the model shows the relationship between change interventions and organizational target variables. In this stage, various variables to be changed are identified. The third part of the model focuses on the types of individual cognitive change. A cognitive change can occur at various levels: Alpha Changes are possible when there is a change in the skill level of the employee. Beta changes are possible when there is a change in the work setting. Gamma (A) changes are possible when individuals perceive a change in the configuration of an existing paradigm, without the addition of new variables. i.e. Change from a cost containing company to a total quality concern. This is characterized by a change in the process of the work. Gamma (B) changes are possible when individuals perceive a replacement of one paradigm with another. At this stage, the entire change has occurred and has been accepted successfully. The fourth and final part of the model focuses on how individual behavior changes can lead to two possible outcomes – improved organizational performance and enhanced individual development. By applying this model, the behavior of the employees can be changed at TAJ HOTELS, contributing to the overall development of the organization. Reference: Cummings & Worley, Organization Culture and Change , 2005, page 490 Garry Dessler, Human Resource Management, Eastern Economy edition. Pg 465-479. Randy L. Desimone, Jon M. Werner and David M. Harris, Human Resource Development, Pearson education. Pg. 225 – 239 Stephen P. Robbins, Organizational Behavior, Tenth Edition, Prentice Hall of India. Pg. 425-446, Pg. 523-535. CHANGE INTERVENTION ORAGANISATIONAL INDIVIDUAL ORAGANISATIONAL TARGET ORGANISATION OUTCOME VARIABLES MEMBERS Source: Randy L. Desimone, Jon M. Werner and David M. Harris, Human Resource Development, Pg. 573 Proposed change Model for TAJ HOTELS. Read More