Types of Planned Change

An organization can be changed by altering its structure, its technology, its people, or some combination of these features.

Approaches to Structural Change:

Changing an organization’s structure involves rearranging its internal systems, such as the lines of communication, work flow, or management hierarchy. If you recall the aspects of structure discussed, you will recognize that these are the changes that can be made:

Organizational Design: Classical organizational designs focus on carefully defining job responsibilities and on creating appropriates divisions of labor and lines of performance. As we have noted frequently one of the most significant structural trends is toward the flat, organization, in which middle layers of management are eliminated to streamline the interaction of top managers with non-management employees, who are given more responsibilities. Wal-Mart, recently named the United States’s leading retailer, has a flat structure.

Decentralization: One approach to decentralization involves creating smaller self-contained organizational units that are meant to increase the motivation and performance of unit members and to focus their attention on high priority activities. Decentralization also encourages each unit to adapt its structure and technology to its particular tasks and to its environment. Cray Research’s decision to let founder Seymour Cray pursue his own research interests in a new company, Cray Computer, is a good example. Another is Disney’s decision to create Touchstone Pictures, which offers more sophisticated films than the traditional Disney fare.

Modified work flow: Modification of the work flow and careful grouping of specialties may also lead to an improvement in productivity and morale. One expression of this trend is the amount of money employees can spend without getting authorization. The consulting firm of A T Kearney found that the best-performing companies in the Fortune 200 let division managers spend as much as $20 million on their own signature. On a smaller scale, the WIX division of the Dana Corporation lets many employees spend $100 on a process innovation without going through a slow and potentially painful and humiliating process of getting authorization. Another expression of this idea is that managers speed product development by “jamming people from disparate functions together in the same room or workplace or cubby hole”.

Approaches to technological change:

Changing an organization’s technology involves altering its equipment engineering processes, research techniques, or production methods.

Production technology often has a major effect on organizational structure. For that reason, techno-structural or socio-technical approaches attempt to improve performance by simultaneously changing aspects of an organization’s structure and its technology. Job enlargement and job enrichment are examples of techno-structural approaches to change.

Approaches to changing people:

Both the technical and the structural approaches try to improve organizational performance by changing the work situation. The people approaches, on the other hand, try to change employee behavior by focusing on their skills, attitudes, perceptions, and expectations. We will explore an extension of this approach to change now when we discuss organizational development.

AT&T Common Bond:

The managers at AT&T could no doubt identify with all the concepts discussed above. Both organizational and environment forces for change clearly existed. Even before the divestiture, AT&T had undertaken programs designed to make changes, for example the company had already negotiated a union agreement with the Communications Workers of America that included a new quality work life program to improve management labor communications and cooperation.

Because AT&T was so huge before the divestiture, overcoming inertia took constant effort. Once the layoffs started resistance to change increased among some employees in proportion to the company’s own uncertainty but it lessened on others – those who were eager for something almost anything to happen.

Recently CEO Robert Allen has implemented a change program at AT&T aimed at shifting the culture of the giant to be more responsible and more flexible built around a set of values called “Our Common Bond”. This planned change program is aimed at developing a foundation of ethical and business values which AT&T can build upon in all its businesses. At its Universal Card subsidiary which won the prestigious Malcolm Baldrige National Quality Award, a set of values like our Common Bond was instrumental in developing a ‘can-do’ employee attitude.