Monday, November 08, 2004

11 5

Roloff 11 05

More Macro theories

Dialetical – Roloff believes in this one -Thesis + Antithesis = Conflict, which leads to synthesis. If nothing is hidden there is high conflict, but the best solution comes from the process. Downs believes that there are forces for change and inertia in every organization:

Forces for Inertia:

1) Sunk Cost bias – people have a tendency to keep investing in a losing course of action, gamblers keep losing but keep gambling, bad marriages last. Why does this happen? Hope springs eternal, things have to get better is the assumption; another reason is that quitting is an admission of weakness. Losses aren’t often quatified, and considering losses is terrifying.
2) Self Interest – like Downs’ conservers, change will only lead to loss.
3) Real Cost – the cost of change will be high

Forces for Change –
1) We have the desire to do a good job
2) The desire to increase power – “Empire Building” – climbers want gains the changes will bring
3) Self defense – fear appeal, change or die.

Opposing forces probably lead to compromise.

The paradox of decision-making: Anything that leads to a better quality decision makes implementation of the decision less likely.

The number of different solution increases when more people partipate; cognitive conflict leads to emotional or affective conflict, consensus is harder to get because people’s ideas are hacked away. Face is lost by people whose ideas are trashed. Friendships and alliances are also part of the process. The process of deliberation will not lead to synthesis.

The Lifecycle Approach – Different approaches apply at different stages of life. Changes occur even in stable organizations. Two organizational perspectives:

1) Greiner – not a lot of data, mostly theoretical – Change can be charted on based on age and size of change. There are two types of changes, Revolutionary and Evolutionary changes. Evolutionary changes are tweaking, but Revolutionary changes are dramatic. Most organizations go through “Growth through Creativity” early in their lifecycle (evolutionary); the problem is that there is a wall, and the first crisis, the “Crisis of Leadership”, leads to a break in a positively-angled curve. It becomes Revolution time, the dominant personality rises to the forefront. Then there is smooth evolutionary change, “Growth through Direction”. Crisis #2, “Crisis of Autonomy”, people are dissatisfied with the leader. Others are given control, “Growth through Delegation” then there is a “”Crisis of Control”; decentralization leads to autonomy, which takes the organization in different directions. Leads to “Growth through Cooordination”, when processes are standardized. This leads to the “Crisis of Red Tape” bureaucracy slows the oganization. “Growth Through Collaboration”, characterized by teamwork and limiting bureaucracy through collaborative processes, will take care of the red tape crisis…but other crises are sure to follow.
2) Gersik – Thinks the key is to understand evolution vs. revolution, and admits that there is change even during periods of stability. Revolutionoary changes occur when the deep structure of the organization is modified; two elements are differentiation and how work is performed. Organizations reach and equilibrium state, in which they are satisfied with culture, don’t have to make drastic changes, and want to maintain the status quo, make superficial adjustments only. Gersik thinks that there are 3 forces that maintain equilibrium: 1) cognitive forces – everyone in the company is thinking inside the box, there is no encouragement to think outside; 2) Motivation – change is disruptive, which is unpleasant, and so is opposed; 3) Relationships and Obligations to Stakeholders – changes may not allow the organization to meet the needs of its stakeholders, who may abandon the organization; organization may not have another stakeholder group to replace the old. Eventually, an organization will be forced into revolutionary change: 1) internal operation of the organization – groups don’t get along, groups aren’t cohesive 2) External influences. There are a number of manifestations of revolutionary change 1) optimism and enthusiasm 2) They rely on outsiders for what they should do 3) They disperse new ideas throughout the organization. Not all radical changes produce good outcomes (though she has no data to back it up). A study that analyzed revolutionary change discovered 1) it takes time, tipping points are a myth; 2) it isn’t a linear process, it goes through start/stop cycles; 3) it starts at the core of the organization, rather than at the margins, changes can’t happen simultaneously in all areas of the organization; change at the core can also meet with powerful resistance.

The Teleological Approach

The key variable for understanding why organizational change occurs is a Performance Gap. Downs attributes performance gaps to personnel changes, changes in technology, and external factors like crises. When there is a performance gap, only pressure from a significant stakeholder will lead an organization to close the gap, but not everyone will respond; organizations can lie about having made a change or reorganize around a different goal, rather than actually confront the gap. Stakeholder groups are convinced that their interests are being served. Organizations can also find another stakeholder group.

Innovations in Organizations

Literature has its origin in rural innovation, how to get innovations to farmers. The literature has a pro-innovation bias…a new way must be better than the old way. What are the key elements of innovation?

1) Relative advantage – how much better the innovation is compared to the status quo.
2) Complexity – the more complex the idea, the less likely people are to adopt it.
3) Compatibility – change has to be compatible with current practices.
4) Trialability – when people can try a change first, they are more likely to agree to a change.
5) Observability – The sooner improvement can be observed, the likelier they are to adopt a change…people like fast outcomes.

The characteristics of people who innovate: groups derived from rural sociology.

1) The innovators – frist 2 ½ percent to adopt a new idea. Attached to a particular product or idea, innovators use highly specialized media. They are willing to risk resources to make the innovation.
2) The early adopters – next 13 ½ % to adopt a new idea. These people are interested in new ideas, but aren’t as specialized, read summaries of technical reports rather than original research. Early adopters are seen as opinion leaders in their peer groups, are sought for advice.
3) Early Majority – Next 34% to adopt. People who hear about change from the popular press or from early adopters.
4) The Late Majority – Next 34% to adopt. These people adopt because they have to.
5) Laggerts – Last 16%, will never adopt. These people are principled, and isolates.

As people adopted change, there was an s-curve in a graph of the diffusion of change, with axes time and adoption. There will be resistance to change, then acceptance, then a plateau. The influence of interpersonal contacts grows as the diffusion of the new idea grows.

What factors determine whether a company will innovate?

1) Slack resources – this is counterintuitive, but resources used inefficiently that can be shuffled must be there for innovation to occur. Structure – two aspects – degree of formalization (rules and routines) degree of centralization. Companies that rely on rules and routines reduce innovation (but makes a change adoption likelier). The same is true of centralization. Organizations that make innovation likelier make it tougher to implement change, and vice versa.


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