De Sitter – Functional requirements and design parameters

Read the text about de Sitter (chapter 7 in the book “Organizations: social systems conducting experiments”€™ by Achterbergh and Vriens). This text has also been used in the bachelor course on Systems Theory (please note: this text is not part of the exam literature). Based on this text, you should answer the following questions:

What are internal and external functional requirements?

De Sitter specifies how a design should be able to distribute work in order to keep an organization viable (Achterbergh & Vriens, 2010). Organizations should attenuate disturbances that are a threat for organizational variables, and amplify their regulatory potentials (Achterbergh & Vriens, 2010). But what are these relevant organizational variables? This is a set of variables regarding to which disturbances should be attenuated and regulatory potential should be amplified, but which variables are we specifically talking about (Achterbergh & Vriens, 2010, p. 241)? De Sitter calls these variables “functional requirements” (Achterbergh & Vriens, 2010). In his theory he distinguishes external and internal functional requirements.

External requirements are requirements which are set by the environment and should be met to ensure the organization’s viability (Achterbergh & Vriens, 2010). Internal functional requirements on the other hand are translations from the external ones and should be met by an organization for it to meet the external requirements (Achterbergh & Vriens, 2010). According to De Sitter there are three categories of functional requirements: (1) quality of organization, (2) quality of working relations and (3) quality of work (Achterbergh & Vriens, 2010).

To achieve a high quality of the organization, there are three external functional requirements which should be met; order flexibility, control over order realization, and potential for innovation (Achterbergh & Vriens, 2010). These three external ones can be translated in to smaller internal organizational goals (internal functional requirements) (Achterbergh & Vriens, 2010).

Quality of working relations is related to the effectiveness of communication in organizations (Achterbergh & Vriens, 2010). By letting people participate in the communication is it possible to realize the external functional requirement related to this quality; effective communication (Achterbergh & Vriens, 2010).

High quality of work can only be achieved by accomplishing a low level of absenteeism and a low level of personnel turnover (Achterbergh & Vriens, 2010). These external requirements have to be translated into smaller internal function requirements in order to make it possible to meet them. Therefore, it it is possible to separate these requirements into concrete internal variables that have to have a certain value so that these external requirements can be met (Achterbergh & Vriens, 2010). For instance opportunities to develop in an organization are very important because they probably lead to a lower level of personnel turnover. An internal functional requirement leads in this instance to a realization of an external functional requirement.

What is the structure of an organization and what is its role in realizing the functional requirements?

How should an organization be organized in order to do the things it wants to do? An organizational structure makes it possible to distribute labor (personal communication J. Achterbergh, 14 September 2015). Structures can help an organization to realize its goals, these goals derive from essential variables and norms (personal communication J. Achterbergh, 14 September 2015). Furthermore, this structure should be able to attenuate disturbances and amplify its regulatory potential (Achterbergh & Vriens, 2010). De Sitter says that there are three categories of relevant essential variables to organizations: quality of organization, quality of work and quality of working relations (Achterbergh & Vriens, 2010). Within these categories, there are external functional requirements and internal ones (text assignment 3.1.a.). A structure should enable an organization to meet the particular norm which is set for these requirements because meeting the requirements is the only way to survive in an environment for organizations (personal communication J. Achterbergh, 14 September 2015).

What are design parameters and what is their function in designing organizational structures?

Concluding from the above we could say that a structure should attenuate disturbances, amplify regulatory potential and, therefore, enable the organization to meet the functional requirements. But how should one design such a structure? De Sitter has developed seven design parameters by means of which is it possible to design a structure that is able to attenuate and amplify (Achterbergh & Vriens, 2010). These parameters use relevant characteristics of organizational structures. Every set of parameters with its values has a specific effect on the controllability of the structure. This controllability is the ratio expressing the effectiveness, is there enough potential for regulation, and efficiency, the potential for regulation should not exceed the potential which is needed to deal with the required regulation, of the structure (Achterbergh & Vriens, 2010). If you were to know the optimal values of the parameters as a designer, you could use this to diagnose and design organizational structures (Achterbergh & Vriens, 2010).

Hoog: ellende, de kans op verstoringen is hoog en het regelvermogen is laag.

→ Complex netwerk, simpele taken → relaties.

Laag: alles zoveel mogelijk geïntegreerd, kans op verstoringen laag en regelvermogen hoog.

→ Simpel netwerk, complexe taken → weinig relaties.

De Sitter geeft aan: je ontwerpt een goede arbeidsverdeling (eentje die dempt en versterkt) door: “taken zo te definiëren en te koppelen dat zgn ontwerpparameters de juiste invulling krijgen

Met behulp van de ontwerpparameters ben je beter in staat om te beoordelen wat het effect van een specifieke arbeidsverdeling is op de essentiele variabelen (functie-eisen) — en daarmee om te beoordelen of een specifieke arbeidsverdeling goed is of niet.

Text Assignment 3.2 Focus of change

This assignment is about section III “Focus of change” from the book of Beer and Nohria’s. The term ‘focus’ refers to the object of change.

Please read page 137 to 191.

Summarize Galbraith and Hirschhorn’s position on the focus of change.

Jay Galbraith argues that in many circumstances management must make changes in formal organizational arrangements. Especially when top management faces a change in strategic direction and when a radical transformation is necessary. Aspects which might have to change are the reallocation of power, influence, and decision rights. Galbraith acknowledges the value of interventions in softer organizational aspects (culture) in some less radical circumstances, and these interventions might even support more radical structural transformations. Nevertheless, Galbraith argues that radical shifts need to start with changing the structure (hardware of the organization) (p. 137-138)

Larry Hirschhorn argues that using formal structure and systems to change behavior cannot yield sustained improvements in performance. Instead, managers must should focus on the culture of the organization – the set of beliefs and values that gave the old order legitimacy. In order to legitimize new formal organizational arrangements based on moral meaning, leaders must develop what Hirschhorn calls a “counter structure”: a series of interlocking mechanisms that undermine the inherited organizational structure while at the same time providing a new basis for cohesion and commitment (p. 161). Besides, Hirschhorn argues that aggression is an essential ingredient in the change process. The “counter structure” provides a safe way for aggression (p. 138).

According to Galbraith, ‘structure’ is an important lever of organizational change. Explain Galbraith’s notion of ‘structure’. Explain why and under what circumstances, changing the structure is a relevant action.

There are two arguments named by Galbraith why it is important to change the structure. The first argument is about the leverage of changing the structure. A manager might produce more change by changing the structure and systems than by changing the software of the organization. The other argument entails the sequence of of change levers. If the structure is changed first, then this will shape and drive the following change efforts (p. 140-141).

For certain circumstances the organization’s formal structure and systems are the central lever for change. Changes to formal structure and systems play a central role when substantial shifts in strategic direction are involved, it encounters a drastic and rapid change. Structure changes are also required when an organization transforms from a national company to a multinational organization. A change to the formal structure of power in the organization is necessary. Power concerns the allocation and coordination of limiting resources (p. 141-142)

Explain Hirschhorn’s concept of structure. Explain what the consequences of this conception are for changing organizations.

Hirschhorn’s concept of structure is a social construction. It is an agreement to impute certain meanings to people, roles, and practices (p. 163). People are mostly given a moral meaning to structure. This moral meaning exists of promises, obligations, rights, and duties that is the basis for the psychological contract between employees and the organization. Due to this, people experience a psychological sense of community (p. 163).

Through changing the organization, the network of promises and obligations that tied people to one another, and as a result the moral meaning, is disrupted. Thereby people sensibly resist changes. Hirschhorn argues that an organizational structure no longer represents a moral order when the business itself is in crisis. So crisis creates the preconditions for change.

To cope with this, leaders must create a new moral order or at least the promise of one. They can accomplish this by creating a counter structure (p. 164-166). The difference between a structure and a counter structure is that a structure protects a moral community and a counter structure hopes to create a new community by destroying the old one. In order to achieve a counter structure, aggression has to be mobilized (p. 168). Thereby, in the absence of a real crisis, a virtual crisis based on people’s passion for a new idea or product may also ensure the creation of a counter structure. By focusing again on the work itself and focusing on the linking of affection to aggression, the psychologically violent possibilities of the counter structure can be limited (p. 162).

Consequences of this conception are that leaders can not simply change the structure. Instead, leaders must find a way to attack the inherited structure while simultaneously providing a new basis for the organization’s moral legitimacy. The counter structure becomes an extremely important mechanism for sustaining legitimacy while effecting change (p. 175-176).

Compare Galbraith and Hirschhorn’s conception of structure. What similarities and dissimilarities do you discover? Are the authors discussing the same phenomenon from a different perspective or are they discussing two different phenomena?

Both authors are discussing the same phenomenon but from different perspectives. They both acknowledge that change requires the use of hard (structure and systems) as well as soft levers (culture) of change. So they both agree that structure alone is not enough. The main difference between the two authors is the sequence of the different levers for change. Galbraith argues that a radical transformation needs to start with changing the structure and systems of the organization, while Hirschhorn claims that managers should attend to the culture of the organization and should change the current set of beliefs and values. In short, their focus on change differs. One advocates that the focus should be on structure and systems, while the other thinks that the focus should be on behavior and beliefs.

Besides, Galbraith believes that changes are designed to create better fit between environment and reporting structure, but Hirschhorn believes that changes are designed to overcome collective paralysis. And though Galbraith focuses on structural changes, he describes essential gradual shifts in attitudes and capacities that attend and undergird successive new structures; Hirschhorn describes the change process and its sequence (p. 177).

How can the conceptions of structure of the two authors be linked to the 3D-model?

Galbraith’s conception of structure can be linked to the 3D-model, more specific it can be linked to the functional as well as the infrastructural dimension. There is always a cause that makes it necessary for organizations to change. Galbraith states that often a shift in strategic direction causes the need for an organization to change. The strategic direction of an organization is determined in the functional dimension of the 3D-model. The organization diagnoses that their current strategy is not suitable to the environment anymore, therefore they come up with a new strategic direction. The effect of the shift in strategic direction can be found in the infrastructural dimension. In order to accomplish the new goal, the actual structure and systems of the organization need to be changed. This is done by the intervention organization, which is located in the infrastructural dimension of the 3D-model.

As ascribed above, there is always a cause that makes it necessary for organizations to change. Hirschhorn argues that an organizational structure no longer represents a moral order when the business itself is in crisis. The organization can diagnose – in the functional dimension of the 3D-model – if there is a crisis or not. If there is one, or if there is a virtual crisis, a counter structure – and thereby a new moral order – needs to be created. This can be done in the design phase of the functional dimension. In order to achieve a counter structure, the intervention organization – which is located in the infrastructural dimension of the 3D-model – needs to mobilize aggression. Then the intervention organization needs to ensure that there will be focused again on the work itself and on the linking of affection to aggression, so the psychologically violent possibilities of the counter structure can be limited.

Since the Hirschhorn’s concept of structure is a social construction, the intervention organization needs to keep in mind the importance of the moral meaning. Through changing the organization, the network of promises and obligations that tied people to one another, and as a result the moral meaning, is disrupted. Thereby people sensibly resist changes. So to unfreeze the organization, which is part of the social dimension of the 3D-model, a new moral order need to be created or at least promised. So the moral meaning plays also an important role in the social dimension.

Given the link to the 3D-model, what can be learned from the two authors about interventions in organization structures?

Both authors agree onthe fact that structure alone is not enough. Besides, the structure is also the culture (and thereby the social dimension) important. What can be learned from Galbraith is that he thinks that an intervention (in the intervention organization) should address the structures and systems first. The intervention will help in achieving goals on the functional dimension (strategic shift). The other author, Hirschhorn, believes that the intervention organization should start with changing the HR and culture of the organization. Hirschhorn argues that the intervention taken by the intervention organization will lead to achieving goals on the social dimension. Both authors agree on that one does not exclude the other, but they certainly disagree on what should be addressed foremost.

If an organization is suffering major problems, people tend to say, “…the organization’s culture needs to be changed”. But, what does this actually mean? Is it possible to change the organization’s culture without changing its infrastructure? Can the organization’s infrastructure be changed without a change of culture?

When people say that the organization’s culture needs to be changed they often refer to changing the deeply held beliefs and values of employees. The question remains if organizations should change their hardware or software first in order to accomplish the transformation. It is not possible to change the culture without changing its infrastructure, the other way around is also not an option. For an organization’s transformation to succeed both levers of change should be taken into account or else the organizational change will fail. The culture should namely be supported by the infrastructure, but the other way around, the infrastructure should also be supported by the culture.

Nevertheless, dependent on how radical the change is the focus can differ. When a radical change is necessary the focus will probably be on the structure and systems of an organization. When a less radical change is required but when the beliefs and values have to change the focus will be on the culture within the organization…

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