Organizational Structure

Organizational Structure

By:

Brian G. Nordmann

August 24, 2004

With every business that wants to grow and be profitable comes the inevitable, and that is change. Change is part of any organization be it a religious, educational, familial or our work environment. Without change we would not have walked on the moon, broken Olympic records or even have on-line classrooms. Change is not the challenge; it is managing that change as individuals that may be detrimental to the organization.

Kurt Lewin, a social psychologist, developed a change model that can help us understand the necessity for change and how to manage it a little better. Kreitner - Kinicki describes Lewin's change model as (2003) "a three-stage model of planned change which explained how to initiate, manage, and stabilize the change process. The three stages are unfreezing, changing and refreezing." (p 678) The unfreezing encourages the replacement of old actions with new action desired by management. Kreitner - Kinicki states that unfreezing centers around creating "the motivation to change." (p679) and that the stage of changing "entails providing employees with new information, new behavioral models, or new ways of looking at things." (p679) The third stage is described by Kreitner - Kinicki as refreezing. This is accomplished by "giving employees the chance to exhibit the new behaviors or attitudes." (p679)

Convincing any organization to change can be difficult even if it means the life or existence of the organization. Encouraging the desire for an individual to move outside of their comfort zone and to start something that is different or unfamiliar is the test of any leader. Goodstein and Burke discuss Lewin's change model as the first step to achieving indoring organizational changes by dealing with "resistance to change by unblocking the present system."(p48) Cryer and Elton state that "Behavior, as depicted by a point that moves from state A to state B...moves through all three of Lewin's stages - unfreezing, moving, and refreezing. These stages should not be regarded as strictly separate, but rather as melding one into the next." (p5)

Kotter's eight steps to lead organizational change subsume Lewin's model. Kreitner - Kinicki tells us that "organizational changes typically fail because senior management commits one or more of the following errors." (p682) Kotter's eight errors of leading organizational changes are failures to:

1) Establish a sense of urgency for the need of change

2) Create a powerful-enough guiding coalition that is responsible for leading and managing the change process.

3) Establish a vision that guides the change process.

4) Effectively communicate the new vision.

5) Remove obstacles that impede the new vision.

6) Systematically plan for and create short-term wins.

7) Hold off declaring victory.

8) Anchor the changes into the organization's culture.

The first four steps indicate Lewin's unfreezing theory where steps 5, 6, and 7 are directed toward changing. Refreezing is established in stage 8. Kreitner - Kinicki state the (2003) "value of Kotter's steps is that it provides specific recommendations about behaviors that managers need..." (p682). These eight steps are further evaluated by Gebhart by stating that steps one through four "change the status quo." And that step five through seven "introduce new policy" and finally step eight "institutionalizes the changes." (p1)

Change is part of any growth, and although change can be measured and managed, it can also be unpredictable. With the Catastrophe Theory we can manage to some extent that unpredictable factor. The Catastrophe Theory is described by Baack and Cullen as providing (1994) "a framework to consider the centralization or decentralization of organizational decision-making." (p1) The theory specifically views the relationship and centralization of the growth or decline in organizations based on changes, be they internal or external changes. The theory uses mathematics in order to model both sudden and continuous changes called control factors. The first part of the theory suggests a framework of studying organizational processes. As Baack and Cullen further explain the Catastrophe model suggests the size and centralization of the organization is applicable based on theoretical and empirical evidence. The third part of the theory is based on the (Baack and Cullen 1994) centralization that is "drawn from literature dealing with evolutionary and revolutionary changes in organizational structure."

Keeping the three parts mentioned above in mind, Cryer and Elton explain that with any application of the Catastrophe Theory, a crucial aspect is the control factors. Baack and Cullen suggest that the following conditions must be satisfied (1990):

1) Control factors must be independent of each other.

2) The splitting factor must be chosen so that it can produce more than one stable state.

3) The number of control factors that an application requires must be determined by the number of stable states.

4) The control factors must be appropriate to the application.

Planned change consists primarily of influencing the work practice of the people involved. Therefore, in investigating change (Baack and Cullen 1990) "it is reasonable to look for control factors which relates to the behavior of people at work." (p3)

Change is essential in any business, and we must be aware of what drives these changes. The need for changes is based on internal and external drivers. In the simulation three internal drivers were recognized: Strategic initiative, Improve revenue, and CEO Harold Redd's vision. The three external drivers for change were identified as: The need to meet strategic system integration market place, competitive pressure and market share along with customer needs / wants. These internal and external drivers set the "possible" need for change,