Structural change emphasizes increasing organizational effectiveness by changing the controls that influence organization members during the performance of their jobs. The following section further describes this approach and provides managers with insights regarding how to deal with structural change issues.

Structural change is change aimed at increasing organizational effectiveness through modifications to the existing organizational structure. These modifications can take several forms:

1. Clarifying and defining jobs

2. Modifying organizational structure to fit the communication needs of the organization

3. Decentralizing the organization to reduce the cost of coordination, increase the controllability of subunits, increase motivation, and gain greater flexibility

Although structural change must take into account people and technology in order to be successful, its primary focus is obviously on changing organizational structure. In general, managers should choose to make structural changes within an organization if the information they have gathered indicates that the present structure is the main cause of organizational ineffectiveness. The precise structural changes they choose to make will vary from situation to situation, of course. After changes to organizational structure have been made, management should conduct periodic reviews to make sure the changes are accomplishing their intended purposes.¹⁴

Although successfully changing people factors necessarily involves some consideration of structure and technology, the primary emphasis is on people. The following sections discuss people change and examine grid organization development, one commonly used means of changing organization members.

People change emphasizes increasing organizational effectiveness by changing certain characteristics of organization members such as their attitudes and leadership skills. In general, managers should attempt to make this kind of change when human resources are shown to be the main cause of organizational ineffectiveness.

The process of people change can be referred to as organization development (OD). Although OD focuses mainly on changing certain aspects of people, these changes are based on an overview of structure, technology, and all other organizational components.

One traditionally used OD technique for changing people in organizations is called grid organization development (grid OD).¹⁵ The managerial grid, a theoretical model describing various managerial styles, is used as the foundation for grid OD. The managerial grid is based on the premise that various managerial styles can be described by means of two primary attitudes of the manager: concern for people and concern for production. Within this model, each attitude is placed on an axis, which is scaled 1 through 9 and is used to generate five managerial styles. Figure 11.4 shows the managerial grid, its five managerial styles, and the factors that characterize each of these styles.

If the entire OD area is taken into consideration, changes that emphasize both people and the organization as a whole seem to have inherent strength. However, several commonly voiced weaknesses of OD efforts include the following:¹⁷

1. The effectiveness of an OD program is difficult to evaluate.

2. OD programs are generally too time-consuming.

3. OD objectives are commonly too vague.

4. The total costs of an OD program are difficult to gauge at the time the program starts.

5. OD programs are generally too expensive.

These weaknesses, however, should not eliminate OD from consideration but should instead indicate areas to perfect within it. Managers can improve the quality of their OD efforts by doing the following:¹⁸

1. Systematically tailoring OD programs to meet the specific needs of the organization

2. Continually demonstrating exactly how people should change their behavior

3. Conscientiously changing organizational reward systems so that organization members who change their behavior in ways suggested by the OD program are rewarded

Managers have been employing OD techniques for several decades, and broad and useful applications of these techniques continue to be documented in more recent management literature.¹⁹ OD techniques are currently being applied not only to business organizations but also to many other types of organizations, such as religious organizations. Moreover, OD applications are being documented throughout the world, with use being reported in countries such as Hungary, Poland, and the United Kingdom.²⁰

Resistance to change within an organization is as common as the need for change. After managers decide to make an organizational change, they typically meet with employee resistance that is targeted at preventing that change from occurring.²¹ The source of this resistance from organization members is their fear of personal loss, such as a reduction in personal prestige, a disturbance of established social and working relationships, and personal failure because of their inability to carry out new job responsibilities.²²

To ensure the success of needed modifications, managers must be able to reduce the effects of the resistance that typically accompanies proposed change.²³ Resistance can usually be reduced by following these guidelines:²⁴

1. Avoid surprises—People need time to evaluate a proposed change before management implements that change. Unless they are given time to evaluate and understand how the change will affect them, employees are likely to be automatically opposed to it. Whenever possible, therefore, individuals who will be affected by a change should be informed of the kind of change being considered and the probability that it will be adopted.

2. Promote genuine understanding—When fear of personal loss related to a proposed change is reduced, opposition to the change is also reduced. Most managers find ensuring that organization members thoroughly understand a proposed change is a major step in reducing this fear. Understanding may even generate enthusiastic support for the change if such understanding leads employees to focus on the individual gains that could materialize as a result of the change. People should be given information that will help them answer the following change-related questions they invariably will have:

   • Will I lose my job?

   • Will my old skills become obsolete?

   • Am I capable of producing effectively under the new system?

   • Will my power and prestige decline?

   • Will I be given more responsibility than I care to assume?

   • Will I have to work longer hours?

   • Will it force me to betray or desert my good friends?

3. Set the stage for change—Perhaps the most powerful tool for reducing resistance to change is management’s positive attitude toward the change. This attitude should be displayed openly by top and middle management as well as by lower management. In essence, management should convey that change is one of the basic prerequisites for a successful organization. Management should also strive to encourage change for increasing organizational effectiveness rather than for the sake of trying something new.

   Storytelling—the sharing of anecdotes or personal narratives to create emotional connections among work groups—is a useful communication technique that can help set the stage for organizational change. By breaking down barriers and resistance to change, storytelling also enables management to honor organizational traditions of the past and helps employees accept new ways of doing things.²⁵

   To encourage employees to have a positive attitude toward change, some portion of organizational rewards should be earmarked for those organization members who are most instrumental in implementing constructive change.

4. Make the change tentative—Resistance to change can also be reduced if the changes are made on a tentative basis. This approach establishes a trial period during which organization members spend some time incorporating a proposed change into their work before voicing support or nonsupport of it. Tentative change is based on the assumption that a trial period during which organization members incorporate a change is the best way of reducing employees’ fears of personal loss. Judson has summarized the benefits of using the tentative approach:

   • Employees affected by the change are able to consider their reactions to the new situation before committing themselves irrevocably to it.

   • Those who will work with the change are able to acquire more facts on which to base their attitudes toward the change.

   • Those who had strong preconceptions about the change are in a better position to assess it with objectivity. Consequently, they may review and modify some of their preconceptions.

   • Those involved are less likely to regard the change as a threat.

   • Management is better able to evaluate the method of change and make any necessary modifications before carrying it out more fully.²⁶