Mullins L.J. Management and organisational behaviour, Seventh edition
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CHAPTER 21 ORGANISATIONAL CONTROL AND POWER
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See, for example: Coates, J. ‘It is Legitimate to be
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no. 5, 1990, pp. 8–11
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66. See, for example: Vinton, D. ‘Delegation for
Employee Development’, Training and Development
Journal, vol. 41, no. 1, January 1987, pp. 65–7.
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67. McGregor, D. The Human Side of Enterprise, Penguin
(1987).
68. Mann, S. ‘Give a Little Gain a Lot’, Professional
Manager, March 1999, p. 32. See also: Scott, M. More
Time, Less Stress, Random House (1998).
69. Stewart, R. The Reality of Management, Third edition,
Butterworth Heinemann (1999), p. 180.
70. Hunt, J. W. Managing People at Work: a Manager’s
Guide to Behaviour in Organisations, Third edition,
McGraw-Hill (1992).
71. Davis, K. and Newstrom, J. W. Human Behaviour at
Work, Eighth edition, McGraw-Hill (1989), pp. 336–7.
72. Guirdham M, Interactive Behaviour at Work, Third edi-
tion, Financial Times Prentice Hall (2002), p. 569.
73. Gracie, S. ‘Delegate Don’t Abdicate’, Management
Today, March 1999, p. 94.
74. Payne, J. and Payne, S. Letting Go Without Losing
Control, The Institute of Management/Pitman (1994).
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76. Ezzamel, K., Lilley, S. and Wilmott, H. ‘Be Wary of New
Waves’, Management Today, October 1993, pp. 99–102.
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Differ Over Basic Perceptions of Empowerment’,
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Johnson, R. and Redmond, D. The Art of Empowerment,
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89. Erstad, M. ‘Empowerment and Organizational
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91. Green, J. ‘Do Your Managerial Skills Need Servicing
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92. See, for example: Sell, R. ‘Empowerment’, QWL News
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93. Wall, T. and Wood, S. ‘Delegation’s a Powerful Tool’,
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Whitehall II Study, HSE Contract Research, Report
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Organizational Effectiveness, Scott, Foresman (1978),
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Behaviour, Paul Chapman (1993).
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Lawler, E. E. ‘Control Systems in Organizations’, in
Dunnette, M. D. (ed.) Handbook of Industrial and
Organizational Psychology, Rand McNally (1976), p. 1274.
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(2000), p. 10.
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Management Control: Theories, Issues and Practices,
Macmillan (1995), p. 77
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Chowdhury, S. Management 21C, Financial Times
Prentice Hall (2000), p. 158
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Third edition, Financial Times Prentice Hall (2002),
p. 484.
109. Watson, T. J. Organising and Managing Work:
Organisational, managerial and strategic behaviour in
theory and practice, Financial Times Prentice Hall
(2002), p. 244.
FT
Use the Financial Times to enhance your understanding of the context and practice of management and
organisational behaviour. Refer to article 25 in the BUSINESS PRESS section at the end of the book for
relevant reports on the issues explored in this chapter.
Some of the riskiest work we do is concerned with
altering organization structures. Emotions run
wild and almost everyone feels threatened. Why
should that be? The answer is that if companies
do not have strong notions of themselves, as
reflected in their values, stories, myths and
legends, people’s only security comes from where
they live on the organization chart. Threaten that,
and in the absence of some grander corporate
purpose, you have threatened the closest thing
they have to meaning in their business lives.
Thomas J. Peters and Robert H. Waterman
In Search of Excellence, Harper & Row (1982)
Organisation development (OD) is concerned
with the diagnosis of organisational health and
performance, and the ability of the organisation
to adapt to change. It involves the applications
of organisational behaviour and recognition of
the social processes of the organisation. The
manager needs to understand the nature of
organisational culture and climate, employee
commitment, conflict and the successful
implementation and management of
organisational change
LEARNING OUTCOMES
After completing this chapter you should be able to:
explain the meaning, nature and main features of OD;
examine the nature, types and importance of
organisational culture;
specify the characteristics of organisational climate
and employee commitment;
assess the nature and sources of conflict, and
strategies for managing organisational conflict;
explain the nature of organisational change and
explore reasons for resistance to change;
examine the management of organisational change,
and human and social factors of change;
review the importance of organisational health and
performance, and the ability of the organisation to adapt
to change.
ORGANISATION
DEVELOPMENT (CULTURE,
CONFLICT AND CHANGE)
22
Photo: David Lees/Corbis
Organisation development (OD) is a generic term embracing a wide range of intervention
strategies into the social processes of an organisation. These intervention strategies are
aimed at the development of individuals, groups and the organisation as a total system.
Because OD is a generic term there are many possible ways in which it can be
defined. An example of a comprehensive definition of OD in the behavioural science
sense of the term is given by French and Bell:
Organization development is a long-term effort, led and supported by top management, to improve
an organization’s visioning, empowerment, learning, and problem-solving processes, through an
ongoing, collaborative management of organization culture – with special emphasis on the culture
of intact work teams and other team configurations – utilizing the consultant-facilitator role and the
theory and technology of applied behavioural science, including action research.
1
A historical review of the subject of organisational development is provided by Grieves,
who points out that OD is a much older tradition of organisational science than con-
ventional wisdom would suggest. This ‘history’ is only one, albeit very prominent,
behavioural perspective on OD.
2
In a very general sense, OD is concerned with attempts to improve the overall perform-
ance and effectiveness of an organisation. Essentially, it is an applied behavioural
science approach to planned change and development of an organisation.
3
The very
broad nature of OD means that, for example, it can be related to Morgan’s idea on the
use of metaphor to see organisation and management
4
(discussed in Chapter 2). In
Chapter 2, it was also suggested that the term ‘organisational behaviour’ is, strictly, a
misnomer. The same caveat also applies to the term ‘organisation development’. An
organisation is made up of people. When we talk about organisation development it is
important to emphasise a pluralistic approach and remember that, in practice, we are
referring to the development and performance of those individuals and groups of
people who comprise the organisation.
5
OD programmes are aimed not only at improving organisation effectiveness and
efficiency, but also at:
motivational climate, consisting of the set of employee attitudes and morale which influence the
level of performance.
6
Patching refers to the importance of the relationship between the three levels of business
strategy, management strategy, and organisation and management development strategy.
Patching maintains that ‘Management Development is Organisation Development’.
Management and organisation development interventions make no direct physical impact on
organisations as such; they create no product; yet they change things. What they change is man-
agers’ minds … And in changing managers’ minds, such interventions thereby change those
constructs which comprise organisations, markets, careers, and so on. In other words, as man-
agers’ minds change, so do their organisations.
7
The effective management of change is a central and critical feature of OD. According
to Church, OD ought to be about large-scale organisational change that is based on
people’s perceptions and behaviours-human data.
I would draw the line at that kind of work. I would say that downsizing is not OD. I would say that
a lot of training and development is not OD. Process consultation is, in my way of thinking, not
OD. It’s a skill that OD practitioners have, but it’s not doing OD. I really think of OD as being sys-
tematic organizational change.
8
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PART 8 IMPROVING ORGANISATIONAL PERFORMANCE
THE MEANING OF ORGANISATION DEVELOPMENT
The broad
nature of OD
TOPICS ASSOCIATED WITH OD
However, the broad nature of OD means that many interrelated topics could be
included under this heading or ‘label’. Given the importance of people, topics that are
normally included under the heading of organisational behaviour can also be seen as
relevant to the study of OD. However, the emphasis of OD is more on the development
of the organisation than the actual processes of organisation and management. But
even in this narrower interpretation many of the topics discussed in previous chapters
such as, for example, socio-technical systems, Theory X and Theory Y, the Leadership
Grid (Managerial Grid), Management by Objectives, delegation, empowerment, job
design, T-groups and quality circles, may be seen as part of OD.
French and Bell summarise the primary distinguishing characteristics of organisation
development in terms of the following.
■ A focus on culture and processes with specific encouragement of collaboration
between leaders and members.
■ A focus on the human and social side of the organisation, the importance of teams
of all kinds, and participation and involvement in problem-solving and decision-
making. A focus on total system change.
■ OD practitioners as facilitators, collaborators and co-learners with the overarching
goal to make the client able to solve problems on their own.
■ A reliance on an action research model and the adoption of a developmental view
that seeks betterment of both individuals and the organisation.
9
In this and the following chapter we look at selected, major topics which can be con-
sidered as central to, or closely associated with, the study of OD and which are related
closely to the effective management of change (see Figure 22.1):
CHAPTER 22 ORGANISATION DEVELOPMENT (CULTURE, CONFLICT AND CHANGE)
889
Figure 22.1 Major topics associated with organisation development
■ organisational culture;
■ organisational climate;
■ employee commitment;
■ organisational conflict;
■ the management of change;
■ management development; These two topic areas are
■ organisational effectiveness.
}
discussed in Chapter 23.
The implementation of OD
In order to bring about effective change, OD makes use of a number of approaches –
often referred to as intervention strategies – including survey research and feedback,
T-groups, teambuilding and grid training.
■ Survey research and feedback involves the use of questionnaire surveys to help
determine the attitudes of members to the functioning of the organisation. Results
of the surveys are fed back to top management and then to work groups for inter-
pretation and analysis. Group members participate in discussions on the
implications of the information, the diagnosis of problems and the development of
action plans to help overcome the problems identified.
■ T-groups (or sensitivity training) involve small, unstructured, face-to-face group-
ings who meet without a planned agenda or set activities. Training is intended to
concentrate on process rather than content: that is, on the feeling level of commun-
ication rather than the informational value of communication. With the guidance
of the trainers, participants’ patterns of behaviour become the focus of attention for
the group. The objectives are usually to increase participants’ sensitivity to the emo-
tional reactions in themselves and others, their diagnostic ability, and their
behavioural flexibility and effectiveness. (T-groups were discussed in Chapter 14.)
■ Teambuilding is the process of diagnosing task procedures and patterns of human
interaction within a work group. The basic objective is to improve the overall per-
formance of the organisation through improvements in the effectiveness of teams.
Attention is focused on work procedures and interpersonal relationships, and es-
pecially the role of the leader in relation to other members of the group.
■ Grid training is a development from the Blake and Mouton Managerial Grid
approach (discussed in Chapter 7). An implied goal of grid training is that changes
are aimed at attaining a 9,9 orientation (maximum concern for both production and
people) on the Grid.
10
There are, however, a number of other possible intervention strategies. For example,
Naylor refers also to the following ‘OD techniques’:
■ role analysis – the systematic clarification of roles and allocation of them among
group members;
■ life and career planning – people are encouraged to develop and express personal
goals with strategies for integrating these goals with those of the organisation;
■ quality of work life – links between quality of work life and career planning, and a
philosophy of improving the climate in which work occurs; and
■ counselling – to help individuals better understand what it is like to work with
them and, through this, assist them to attain their goals.
11
No two organisations are the same. Each organisation has its own types of problems
and most appropriate remedies. OD is action-oriented and tailored to suit specific
needs. It takes a number of forms with varying levels of intervention. OD concerns
itself with the examination of organisational health and the implementation of
planned change. This may include training in interpersonal skills, sensitivity training,
890
PART 8 IMPROVING ORGANISATIONAL PERFORMANCE
OD action-
oriented
and methods and techniques relating to motivational processes, patterns of communi-
cation, styles of leadership and managerial behaviour.
Although an OD programme is legitimised by the formal system it focuses on both
the formal and the informal system. The initial intervention strategy is usually through
the informal system, which includes feelings, informal actions and interactions, group
norms and values, and which forms part of the culture of an organisation. Our con-
cern in this book is not with the nature or value of OD programmes, per se, but
with some of the major organisational processes that for convenience may be
included under this heading.
Although most of us will understand in our own minds what is meant by organisational
culture, it is a general concept which is difficult to define or explain precisely. The concept
of culture has developed from anthropology. Although people may not be aware con-
sciously of culture, it still has a pervasive influence over their behaviour and actions. There
is, however, no consensus on its meaning or its applications to the analysis of work organi-
sations.
12
The wide diversity of interpretations relating to OD gives rise to a large number
of different definitions.
13
Furthermore, there is sometimes confusion over the difference
between the interpretation of organisational culture and organisational climate.
A popular and simple way of defining culture is: ‘how things are done around here’.
For example, Atkinson explains organisational culture as reflecting the underlying
assumptions about the way work is performed; what is ‘acceptable and not acceptable’;
and what behaviour and actions are encouraged and discouraged.
14
A more detailed definition is:
the collection of traditions, values, policies, beliefs, and attitudes that constitute a pervasive con-
text for everything we do and think in an organisation.
15
The culture of an organisation is also often likened to the personality of an individual.
16
According to Varey, culture and communication cannot be separated. ‘For us to com-
municate and cooperate, we must share some common assumptions about the world
we live in and some common standards by which to judge our own and each other’s
actions.’
17
Cartwright sees culture as a system of management authority. When
accepted by employees, cultural values increase the power and authority of manage-
ment in three ways. Employees:
■ identify themselves with their organisation and accept its rules when ‘it is the right
thing to do’;
■ internalise the organisation’s values when they believe they are right; and
■ are motivated to achieve the organisations objectives.
18
Culture is reinforced through the system of rites and rituals, patterns of communica-
tion, the informal organisation, expected patterns of behaviour and perceptions of the
psychological contract.
CHAPTER 22 ORGANISATION DEVELOPMENT (CULTURE, CONFLICT AND CHANGE)
891
ORGANISATIONAL CULTURE
Yetapart from its size, McDonald’s draws attention for its distinctive – and to outsiders,
extremely opaque – culture. Talk to anyone connected with the company, from CEO to fran-
chisee, for any length of time and you’ll notice how little they refer to McDonald’s by name.
Instead they use two words without any apparent need for explanation – ‘the System’. Its
derivation is innocent enough – a hangover from the company’s pre-flotation days in the US
when it was known as McDonald’s Systems Inc – but the effect is of arrogance, even evan-
gelism. It is not simply the usual ‘the way we do things round here’ but an entire philosophy
developed and refined over 40 years and supported by a 600-page operating manual.
19
Schein suggests a view of organisational culture based on distinguishing three levels of
culture: artefacts and creations; values and basic assumptions.
20
■ Level 1: Artefacts. The most visible level of the culture is artefacts and creations –
the constructed physical and social environment. This includes physical space and
layout, the technological output, written and spoken language and the overt behav-
iour of group members.
■
Level 2: Values. Cultural learning reflects someone’s original values. Solutions about
how to deal with a new task, issue or problem are based on convictions of reality. If
the solution works the value can transform into a belief. Values and beliefs become
part of the conceptual process by which group members justify actions and behaviour.
■ Level 3: Basic underlying assumptions. When a solution to a problem works
repeatedly it comes to be taken for granted. Basic assumptions are unconsciously
held learned responses. They are implicit assumptions that actually guide behaviour
and determine how group members perceive, think and feel about things.
Schein suggests that the basic assumptions are treated as the essence – what culture
really is; and values and behaviours are treated as observed manifestations of the cul-
ture essence.
There are a number of ways in which to classify different types of organisational culture.
For example, developing the ideas of Harrison,
21
Handy describes four main types of
organisational cultures: power culture; role culture; task culture; and person culture.
22
■ Power culture depends on a central power source with rays of influence from the cen-
tral figure throughout the organisation. A power culture is frequently found in small
entrepreneurial organisations and relies on trust, empathy and personal communi-
cations for its effectiveness. Control is exercised from the centre by the selection of
key individuals. There are few rules and procedures, and little bureaucracy. It is a
political organisation with decisions taken largely on the balance of influence.
■
Role culture is often stereotyped as a bureaucracy and works by logic and rationality.
Role culture rests on the strength of strong organisational ‘pillars’ – the functions of
specialists in, for example, finance, purchasing and production. The work of, and inter-
action between, the pillars is controlled by procedures and rules, and co-ordinated by
the pediment of a small band of senior managers. Role or job description is often more
important than the individual and position power is the main source of power.
■ Task culture is job-oriented or project-oriented. In terms of structure the task culture
can be likened to a net, some strands of which are stronger than others, and with
much of the power and influence at the interstices. An example is the matrix organ-
isation. Task culture seeks to bring together the right resources and people, and
utilises the unifying power of the group. Influence is widely spread and based more
on expert power than on position or personal power.
■ Person culture is where the individual is the central focus and any structure exists to
serve the individuals within it. When a group of people decide that it is in their own
interests to band together to do their own thing and share office space, equipment
or clerical assistance then the resulting organisation would have a person culture.
Examples are groups of barristers, architects, doctors or consultants. Although it is
found in only a few organisations many individuals have a preference for person
culture, for example university professors and specialists. Management hierarchies
and control mechanisms are possible only by mutual consent. Individuals have
almost complete autonomy and any influence over them is likely to be on the basis
of personal power.
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PART 8 IMPROVING ORGANISATIONAL PERFORMANCE
Levels of
culture
TYPES OF ORGANISATIONAL CULTURE
Every organisation will have its own unique culture and most large businesses are
likely to be something of a mix of cultures with examples for each of the four types in
varying areas of the organisation. Different people enjoy working in different types of
organisation culture and they are more likely to be happy and satisfied at work if their
attributes and personalities are consistent with the culture of that part of the organisa-
tion in which they are employed.
23
From an examination of hundreds of business organisations and their environments,
Deal and Kennedy categorise corporate cultures according to two determining factors in
the marketplace:
■ the degree of risk associated with the organisation’s activities; and
■ the speed at which organisations and their employees receive feedback on the suc-
cess of decisions or strategies.
These factors give rise to four generic types of culture: the tough-guy, macho culture; the
work-hard/play-hard culture; the bet-your-company culture; and the process culture.
24
■ Tough-guy, macho culture – an organisation of individualists who frequently take
high risks and receive quick feedback on the right or wrong of their actions.
Examples cited include police departments, surgeons, construction, cosmetics, man-
agement consulting and the entertainment industry. Financial stakes are high and
there is a focus on speed. The intense pressure and frenetic pace often results in
early ‘burn-out’. Internal competition and conflict are normal, stars are tempera-
mental but tolerated. A high staff turnover can create difficulties in building a strong
cohesive culture.
■ Work-hard/play-hard culture – characterised by fun and action where employees
take few risks, all with quick feedback. There is a high level of relatively low-risk
activity. Examples include sales organisations such as estate agents and computer
companies, mass consumer companies such as McDonald’s, office equipment manu-
facturers and retail stores. Organisations tend to be highly dynamic and the primary
value centres on customers and their needs. It is the team who produce the volume,
and the culture encourages games, meetings, promotions and conventions to help
maintain motivation. However, although a lot gets done, volume can be at the
expense of quality.
■ Bet-your-company culture – where there are large-stake decisions with a high risk
but slow feedback so that it may be years before employees know if decisions were
successful. Examples include oil companies, investment banks, architectural firms,
and the military. The focus is on the future and the importance of investing in it.
There is a sense of deliberateness throughout the organisation typified by the ritual
of the business meeting. There is a hierarchical system of authority with decision-
making from the top down. The culture leads to high-quality inventions and
scientific breakthroughs, but moves only very slowly and is vulnerable to short-
term fluctuations.
■ Process culture – a low-risk, slow-feedback culture where employees find difficulty
in measuring what they do. Typical examples include banks, insurance companies,
financial services, and the civil service. The individual financial stakes are low and
employees get very little feedback on their effectiveness. Their memos and reports
seem to disappear into a void. Lack of feedback forces employees to focus on how
they do something, not what they do. People tend to develop a ‘cover your back’
mentality. Bureaucracy results with attention to trivial events, minor detail, formal-
ity and technical perfection. Process cultures can be effective when there is a need
for order and predictability.
CHAPTER 22 ORGANISATION DEVELOPMENT (CULTURE, CONFLICT AND CHANGE)
893
Four generic
types of
culture
The culture and structure of an organisation develop over time and in response to a
complex set of factors. We can, however, identify a number of key influences that are
likely to play an important role in the development of any corporate culture. These
include: history; primary function and technology; goals and objectives; size; location;
management and staffing; and the environment.
25
■ History. The reason, and manner in which, the organisation was originally formed,
its age, and the philosophy and values of its owners and first senior managers will
affect culture. A key event in the organisation’s history such as a merger or major
reorganisation, or a new generation of top management, may bring about a change
in culture. Corporate history can be an effective induction tool to assist a growth
programme, and to help integrate acquisitions and new employees by infusion with
the organisation’s culture and identity.
26
■ Primary function and technology. The nature of the organisation’s ‘business’ and
its primary function have an important influence on its culture. This includes the
range and quality of products and services provided, the importance of reputation
and the type of customers. The primary function of the organisation will determine
the nature of the technological processes and methods of undertaking work, which
in turn also affect structure and culture.
■ Goals and objectives. Although a business organisation may pursue profitability,
this is not by itself very clear or a sufficient criterion for its effective management.
For example, to what extent is emphasis placed on long-term survival or growth and
development? How much attention is given to avoiding risks and uncertainties? Or
how much concern is shown for broader social responsibilities? The organisation
must give attention to objectives in all key areas of its operations. The combination
of objectives and resultant strategies will influence culture, and may itself be influ-
enced by changes in culture.
■ Size. Usually larger organisations have more formalised structures and cultures.
Increased size is likely to result in separate departments and possibly split-site opera-
tions. This may cause difficulties in communication and inter-departmental rivalries
with the need for effective co-ordination. A rapid expansion, or decline, in size and
rate of growth, and resultant changes in staffing will influence structure and culture.
■ Location. Geographical location and the physical characteristics can have a major
influence on culture – for example, whether an organisation is located in a quiet
rural location or a busy city centre. This can influence the types of customers and
the staff employed. It can also affect the nature of services provided, the sense of
‘boundary’ and distinctive identity, and opportunities for development.
■ Management and staffing. Top executives can have considerable influence on the
nature of corporate culture. Examples are the key role played by Lord Sieff when
Chairman and Chief Executive of Marks & Spencer
27,28
and Anita Roddick, founder
of The Body Shop.
29
Another example is provided by Marjorie Scardino and her
change of style when she took over as the new chief executive of Pearson.
Her candour works ... As an example of straight talking winning over a sceptical City and
press, it is brilliant. As an example of just how much a company’s culture can change under a
newchief executive, it is breathtaking.
30
However, all members of staff help to shape the dominant culture of an organisa-
tion, irrespective of what senior management feel it should be. Culture is also
determined by the nature of staff employed and the extent to which they accept
management philosophy and policies or pay only ‘lip service’. Another important
influence is the match between corporate culture and employees’ perception of the
psychological contract.
894
PART 8 IMPROVING ORGANISATIONAL PERFORMANCE
INFLUENCES ON THE DEVELOPMENT OF CULTURE